The Untapped Opportunity: Why Developers Should Focus on Building Larger Family Housing Units

Toronto’s housing market has often neglected a key demographic: families.

While the city is increasingly focused on compact living and urban density, the demand for larger units tailored to families is consistently overlooked. This gap not only limits housing options for families but also represents a substantial missed business opportunity for developers, especially in today’s evolving real estate market.

Families, particularly those with children, need more than just one or two-bedroom apartments. A three-bedroom unit, for example, provides the necessary space without the excess of a standalone house. It’s not about building massive units, but about ensuring families have enough bedrooms to comfortably live in an urban setting.

Additionally, amenities tailored to family living can be incorporated into the building itself. Features like a mudroom or stroller parking can cater to family needs without increasing the unit’s footprint. This approach preserves urban density while enhancing livability for families.

Urban Living vs. The Traditional Backyard

One common misconception among developers is that families won’t give up the traditional suburban backyard. In reality, features like terraces or communal outdoor spaces can serve as excellent alternatives. These shared spaces offer families a place to gather and play without the inefficiency of individual plots of land.

Moreover, common outdoor areas foster community interaction, enriching the urban living experience by encouraging social engagement among neighbors. These amenities strike a balance between privacy and social connectivity, enhancing the sense of belonging for families in urban settings.

Ignoring Market Potential

The current generation of homebuyers, particularly Millennials, values efficiency, proximity, and convenience—qualities that urban living offers but suburban homes often lack. Unlike previous generations who were more willing to endure long commutes, today’s families prioritize being closer to work, schools, amenities, and social activities. Living in the city reduces commuting times and maximizes quality time, something many suburban options cannot provide.

Unfortunately, developers often underestimate the market potential for larger units. There’s a prevailing belief that only investors can afford pre-construction purchases, leading to a focus on smaller, more affordable units. This miscalculation narrows the customer base and pushes families toward the suburbs, where larger homes are more readily available.

Lessons from Uber and Airbnb

Looking at how other industries, like Uber and Airbnb, have adapted to market demands provides valuable insights. Uber convinced people it was safe to ride with strangers, and Airbnb showed that hosting or staying in a stranger’s home could be a viable option.

Similarly, developers have an opportunity to innovate by recognizing the growing demand for larger family units within urban centers. They can educate buyers on the benefits of city living for families, emphasizing the convenience, community, and quality of life that come with it.

A “Blue Ocean” Opportunity

In the book Blue Ocean Strategy, successful business models are those that foresee future demands that are currently unmet and work to fill that gap. Family-oriented apartments in urban areas perfectly fit this model. By catering to the need for larger units, developers can create new demand while contributing to the overall inclusivity and livability of Toronto.

Those who embrace this opportunity will not only set themselves up for financial success but will also play a key role in shaping the future of Toronto’s housing market. As more families opt for urban living, the developers who address this need early will lead the way in creating a more vibrant, inclusive city.

In essence, the untapped market of larger family units is a “blue ocean” waiting to be explored. Developers who recognize and act on this opportunity will fill a crucial gap in the market and help make urban living a viable option for families in Toronto.