What’s Happening
You've probably passed by a vacant site in Toronto. A row of buildings comes down, fencing goes up and what was supposed to become new housing sits as dirt for years. In a city struggling with housing affordability and the shortage of different housing types, it feels ridiculous to leave valuable land unused. But the problem is not as simple as saying every developer with an empty lot is deliberately holding it back.
Some sites were bought when borrowing was cheap, construction costs were lower and condo buyers were lining up to buy a unit. Others can also be delayed by Ontario Land Tribunal appeals, servicing, environmental remediation, land assembly or ownership disputes. A site can have zoning approval and still lack the financing to begin construction.
Other sites are held for market timing or speculation. This is where zoning creates an interesting incentive. Imagine a parking lot worth $10 million under its current zoning. If the City approves a zoning change to allow a 40-storey tower, the land becomes much more valuable before a single home is built. There's nothing inherently wrong with that: rezoning is how growing cities add housing. But when public planning permissions create a substantial increase to land value, it's fair to ask whether the owner should have some responsibility to move forward or explain a long delay.
The issue gets worse after demolition. An occupied office building, a few storefronts or even a small commercial property might provide jobs, services and street activity to the area. Once those buildings are removed, the neighbourhood has lost something. If construction follows quickly, that may be a reasonable transition. If the land sits vacant for years, residents get all the disruption with none of the promised housing.
A particularly visible example is the Fitzrovia site along Princess Street between King and Adelaide. It has been proposed for rental housing, retail and a new public park. The office and retail buildings were demolished by 2023. The area was then left with fencing and dead frontage in a historic downtown neighbourhood. Businesses disappeared extremely prematurely. Meanwhile, another nearby rental project on Adelaide, between Ontario and Berkeley, went straight from demolition into construction.
Now the financing, construction schedule and developer priorities could be different. We don't know the internal reason. What we do know is the impact on the street: usable buildings were removed and years are going by without any planned replacement.
There is a much better example of what can happen in the meantime. At 8 Rosehill Place, near Yonge and St. Clair, land cleared for a future high-rise was temporarily used by Fairgrounds Racket Club for pickleball and padel courts. The developer had an interim use for the property, the recreation operator had somewhere to run its business and local residents gained an amenity. A win-win.
But then the taxman came knocking. Once the paid recreation facility was operating, MPAC reassessed the parcel from vacant residential development land to its highest and best use. The resulting property-tax increase was around $500,000, making the temporary use financially unviable. The City had recognized the issue and moved to work with MPAC and the province on the assessment problem. It's a strange outcome: land can sit empty, but making it useful may trigger a tax bill that discourages exactly that activity.
Public land has a similar problem. The former Regent Park-Duke of York school site at Parliament and Shuter covers roughly 3.5 acres. The school closed in 2012; the property was sold to the Toronto Catholic District School Board and the building was demolished in 2016. It has been discussed as a possible site for an integrated school and housing development, with a school in the base of a residential building. Yet for over a decade the neighbourhood has had neither a new school nor housing nor meaningful interim public space. It is difficult to justify leaving land like that fenced off indefinitely while the surrounding community grows.
Why It Matters
A stalled site is not simply an unrealized number of housing units. It changes the daily experience of the people who already live and work nearby. Shops disappear, sidewalks become dead edges, empty lots collect garbage and streets lose the activity that made them pleasant. Approving a project is not the same as delivering it.
The most immediate fix is to make interim uses easier where they are safe and practical. A site waiting for construction could host recreation courts, a small market, community gardening, food trucks, temporary public space, art or pop-up retail. These are not substitutes for permanent housing, but they can return value to the neighbourhood during years when no building can realistically proceed.
That only works if the rules allow it. The Fairgrounds example suggests we need to revisit how temporary commercial and community uses are assessed for property tax. It is reasonable for a revenue-generating business to pay tax. A reassessment that makes a short-term use impossible is another matter.
Toronto could also do more with basic site upkeep and public information. Empty lots should have secure fencing, clean frontages and maintained sidewalks. A public map of stalled sites, potentially connected to the City's existing Application Information Centre, could show approval dates, ownership, how long each site has been vacant and whether construction has a credible timeline.
Then there are larger policy questions. Should owners be allowed to demolish usable buildings years before construction is financially ready? Should a long-vacant site need an interim-use plan? Could a vacant-land tax or stalled-site fee apply after prolonged inactivity, with exemptions for projects facing genuine barriers? And if the City grants significant additional density through rezoning, is there a reasonable way to require progress or a renewed justification after many years?
Those are proposals, not rules Toronto currently imposes on every development site. They would need careful design. Punishing a developer who cannot obtain financing won't magically create a construction loan. But an absence of any expectation can leave a neighbourhood bearing the consequences of indefinite inaction.
My Take
I don't think developers should be forced to start construction when the numbers don't work. Interest rates, financing, construction costs and demand are real problems. A stalled project is not automatically evidence of greed, and a poorly designed penalty could make a bad situation worse.
But I do think Toronto is far too passive about what happens between demolition and construction. The City approves a project, demolition follows, a neighbourhood loses buildings and businesses, and then the site just sits behind fencing. Everyone congratulates themselves on how many units were approved, then ignores what happens to the property afterward.
My first priority would be temporary uses. Make it straightforward for landowners to allow sports courts, markets, gardens or other safe community activities when a project is waiting for financing. And fix the property-tax treatment so those uses aren't punished. The Fairgrounds story is particularly frustrating because it demonstrates both a solution and the kind of policy problem that can make the solution impossible.
Second, raise the standard for how vacant sites are maintained. Third, make it easier for residents to find out who owns a stalled property, when it was approved and whether anything is scheduled to happen. Those steps would be useful even if Toronto never introduced a vacant-land tax.
I'd also like a more serious discussion about demolition timing and whether major rezonings should carry some reasonable expectation of progress. Put simply, when an owner demolishes buildings or receives substantial additional development rights, the community should not have to accept a vacant lot indefinitely with no explanation and no interim benefit.
Public agencies should set the example. A former school site of several acres in a growing neighbourhood needs to have a clear plan, or at least a worthwhile temporary use while that plan is worked out.
Ultimately, if Toronto cares about building complete communities, we can't only care about the development that might appear ten years from now. We have to care about the land and the streets people experience today. Approvals are important, but the years between approval and construction matter too.
