Typically condos are made to be fairly luxurious accommodations. As well as trendy features like granite counters and spa washrooms, they’ll sometimes have concierges and martini bars. Each of these features has a cost, which gets passed along to the condo owners, typically as a high monthly condo fee. As an alternative, this idea is to build ultra-economy condos in a convenient location of a large city, and offer them to people who want to own property at a rock-bottom price.
In terms of ultra-economy, I’m talking very utilitarian, uncool places to live. Many of the internal units might not have windows, perhaps the size would be in the 300-400 foot range, no balconies, no in-unit laundry machines, etc. Each would include a washroom, small kitchen area and a place to live and sleep.
I’m not claiming this should be where everyone live. It might be a Pied-à-terre for people who work in the city (but own property elsewhere) or housing for a student or young professional. It could be corporate housing for a law firm to offer to young associates when they first move to the city (or for them to use to sleep at if they’re working 18 hour days). If someone is firmly of the mindset that they want to own property and not “throw away rent money“, this might appeal to them. The vast majority of people WOULDN’T find this appealing, but for a whole city, you should be able to find a building full of people who would.
The location in town should be somewhere fairly accessible to public transit (since the people who would want to live here would also be the type of people don’t want to own a car. It definitely doesn’t need to be (and shouldn’t be) a trendy area.
The marketing would focus purely on the financial element of the building instead of trying to sell it as a lifestyle.
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12 replies on “Economy Condos”
Interesting idea. It reminds me of those hotels in Japan (I think) where you basically just get a bed in a wall.
Although cutting down on the luxuries will save money – I think the big savings will be location and size – it would have to be further away from the downtown core and very small.
“Many of the internal units might not have windows, perhaps the size would be in the 300-400 foot range, no balconies, no in-unit laundry machines, etc. Each would include a washroom, small kitchen area and a place to live and sleep.” Sounds to me like Downtown Toronto Condo’s haha
It’d probably appeal to some people, though I bet that most fire codes anywhere in North America wouldn’t allow windowless condos.
Everything else sounds fine but the no-window breaks the deal. Need a window!
yeah, i’m pretty sure there has to be at least one window, specifically in the bedroom.
the idea’s not that wacky though. i’m sure you see 400 sq ft condos (new) in most big cities in canada. they’re not made economy though, they likely have some pretty nice features.
a lot of canadian cities wouldn’t allow a utilitarian/gulag type building in their bustling and growing downtowns. it’s got to at least look good.
i’d have no problem in a 400 sq ft condo, as long as the finishes and details were there.
perhaps in TO or vancouver you get these ultra luxurious condos with concierges, but out here in alberta, there’s maybe one or two buildings that have that.
Another not so wacky idea.
Some of the new condos going up in the former Regent Park are built as economy condos; nothing fancy but it gives residents pride of ownership.
As a complete aside, big law firms have “sleep rooms” for their associates; typically small internal offices that have a bed- more a bench- and nothing else (they don’t show your those offices on the firm tour!). Yeah, pretty sad comment on the state of associate life.
I don’t think this is a wacky idea…but everyone in the comment section seems to be looking at this idea from the vantage point of the end user (i.e. the law firm for their associates or the young student). While i agree that these groups may be for these economy units I believe one must consider the developers vantage point.
We know that the value of housing/condos increases exponentially with size and luxury. Based on downtown prices for condo’s here in toronto a 950sq foot recently listed fro $500k, while most 650sq feet list for 300k. From the developers vantage point, they would rather create nicer, slightly bigger units to maximize the land’s value rather than sell economy condos when prime land (downtown) is being considered, which is why downtown economy condo’s likely would be a tough sell.
A scenario where i could see both developers and end users coming together would be land slightly off the beaten path and in under developed areas.
What you got here is similar to low income housing, only accessible to the general public.
I like the idea, but it falls down for me when you mention down town etc. The land is so in demand down town that the price per square foot of dirt, when a 40 story building is stacked up on it, is tremendously valuable.
This would be a fantastic idea around universities/colleges or anywhere requiring cheap temporary housing. Investors would scoop them up if the price was cash flowing out of the box given the rental market. By locating them in high demand areas, the demand is built in.
Sorry, to add to that. Having low-end finishing as well as low maintenance grounds (paved/brick etc), it would keep management expenses way down for investors. Low strata and cheap replacement of damaged finishing/appliances.
Low -end finishes and materials don’t have to be ugly. I think these could be livable and attractive. I think you could live without the windows if you had access to some sort of shared green space either in a courtyard or a roof garden.
Our first apartment was about that size. Renting it was fine for about 4 years but I don’t think we would have bought something like that. I guess at the very least we’d need to wait and see some resale numbers.
[…] Four Pillars – moneysmartsblog.com – A long time read of mine that is all about Canadian Personal Finance. ?The topics covered a varied but all come back to personal finance in some way. ?My favourite are Mr Cheap’s series of Wacky Business Ideas (like the “Economy Condo idea“). […]