Yu Huang, Dawn Cassandra Parker
Executive summary
Researchers at the University of Waterloo’s School of Planning (Yu Huang, a Ph.D., supervised by Professor Dawn Parker) investigated the possible mismatch between demand and supply for transit-oriented development (TOD) in Kitchener-Waterloo (KW). The research aimed to better understand housing demand and supply for TOD neighbourhoods in a mid-sized urban area when the new light rail transit (LRT) was under construction. The study was published in the the Journal of Transport Geography.
Our study analyzed data from a 2017 residential location choice survey in KW to address the following questions: How many households are experiencing a state of residential mismatch between preferred and actual neighbourhoods? What trade-offs have they made in residential location choices? The study analyzed 357 households' stated preferences for TOD characteristics (i.e., "5D" aspects of TOD), including distance to transit, design, destination accessibility, diversity, and density. Results show that 37% of respondents held strong TOD preferences but purchased outside TOD areas. These households are primarily young families (aged 25–34) with children, and represent a possible missing target in the TOD housing supply in the study area. For this group, housing size is a more significant factor in their residential location choice compared to their preferences for TOD. However, the current TODs in the central transit corridor focus on one- or two-bedroom apartments, which only target young professionals or seniors but not family households with children. Our study supports building more larger-size units or "missing middle" intensified family housing in TOD areas of Waterloo Region. Our findings benefit Regional governments and the housing development industry by providing strong evidence of unmet demand for TOD to direct future housing development around transit station areas, and may also provide insights for other Canadian mid-sized cities.
Key findings
A substantial proportion of households preferring TOD neighbourhoods
Our research finds that 41.7% of homebuyers in the survey sample hold positive preferences for most TOD features. Particularly, they value transit accessibility, walkability, bicycle-friendliness, access to open space and retail stores for their neighbourhood selection. However, 58.3% show a lower preference for TOD and favour a car-dependent lifestyle. These findings indicate that although over half of households in the survey sample still prefer living in auto-oriented suburban communities, a substantial proportion of households prefer living in transit-oriented communities. In mid-sized cities like Kitchener and Waterloo, car-oriented developments have been pervasive, and people become accustomed to living in the suburbs and commuting by car. For transit investments to succeed and mid-sized municiplaities to meet intensitifaction targets, housing density needs to increase and car-dependence decrease. Therefore, whether transit infrastructure implementation and TOD will help increase transit use and encourage residence in intensified station areas is a considerable concern for many mid-sized cities. Our findings demonstrate strong evidence of household demand for transit-oriented urban development even in mid-sized cities, indicating that TOD goals might be met if attractive and feasible housing options are provided.
A high residential mismatch among young families with children
Despite the evidence of household preferences for TOD neighbourhoods, the more critical question is whether these preferences are satisfied in residents’ actual residential location choices. We identified neighbourhoods within 800 meters of the ION Light Rail (LRT) corridor as the “TOD” area for our study, as it offers the best transit access and density of TOD ammentities. Our study combines buyers' actual location choices with their TOD preferences and finds that 37% of households preferred living in TOD but purchased homes outside the TOD areas; whereas 4% of households preferred living in car-oriented neighbourhoods but purchased in TOD areas. This suggests that almost 41% of households' actual location choices do not match their preferences. A high residential mismatch is seen among those households with TOD preferences but living in non-TOD areas. These households are primarily young families (aged 25–34) with children.
By analyzing residents’ motivational factors for residential relocation, , we found that upsizing is a more critical factor for those families with children than the TOD-relevant factors, even though they were willing to live a transit-oriented lifestyle. They decided primarily to meet their needs for larger housing space, more bedrooms and garages, and better schools for their kids. A family with children commented that:
"we had the intention to move to a home near LRT. We are actually now farther away from LRT than if we had stayed at our previous home. Size of the home was the main factor in why we moved with LRT accessibility being 2nd."
Another family with children explained:
“one of the many reasons why we moved to Waterloo region was the LRT and the dream at some point in the future to be able to bike/walk to an LRT station and take GO train to Toronto. Also, our kids would be able to move independently via active and public transportation (i.e., Bike/walk + LRT). We bought this house as it was [within the] walking distance (4min) to church and school. Also, it’s close to trails."
These comments further illustrate the trade-offs made by those who held TOD preferences but located outside the TOD areas.
Missing target in the current TOD housing supply
Additional research by our group and partners at the Region of Waterloo demonstrates that moderately priced units appropriate for young families are not being built in the LRT corridor TOD area. New construction along the LRT corridor is mainly high-rise apartments with small units (bachelor, 1 bedroom, and few 2 bedrooms), which are too small for families with children. Additionally, developers do not perceive that a market for family-sized units outside the single- family residential dwelling exists in the core areas. Developers primarily target young professionals and seniors in these developments along the LRT corridor, and rarely target families with children, according to our interviews with the developers in the Region. In short, developers base their decisions on previous sales and do not track potential demand (i.e., young families with children). The undersupply of suitable housing units for larger family households can partly explain the residential mismatch in KW.
Conclusion
Planners need to consider the needs of the family households who preferred to live in TOD neighbourhoods but who currently live in car-oriented neighbourhoods. As we learned, for these families, housing size is a higher priority than TOD features. One solution is to build larger units in high-rises, but in the middle of urban cores, these buildings often lack family amenities such as playgrounds and parks. "Missing middle" housing, which refers to low-rise high-density homes – such as low-rise apartments, duplexes,multiplexes, or stacked townhouses – can provide housing options with sufficient square footage for families and access to green amenities. Secondary and tertiary units and laneway homes in existing neighbourhoods can also provide additional units while preserving the neighborhoods' character. To meet the actual demand and households’ preferences around the station areas, local governments and developers need to work together to build housing and neighbourhood options to translate potential buyers’ TOD principles into actual choices. The results of our study, therefore, should encourage other cities planning LRT systems to consider the demand of various household types when planning for TOD neighbourhoods, and create project objectives around housing goals.
This research examinedthe housing demand and supply during the construction of KW’s LRT, when the TOD projects were still underway. Future research conducted by the Urban Growth and Change Research Group will further investigate how the now-operational LRT continues to influence urban development and the Region’s housing market.