car dealerships

Developers eye car dealerships as residential condo sites in Toronto

As Toronto continues to grow and expand, many changes are reshaping the landscape that the city once knew. One of those changes, in particular, has been the number of car dealership lots and stores disappearing across the city — and even the Greater Toronto Area — to make way for more developments, both residential and commercial.

Right now, there are active development applications for a slew of car dealership sites in places like Leaside, midtown, North York and even Thornhill at Yonge Street and Steeles Avenue.

One reason for the disappearance of car dealerships is the surge in land values across the city. As Toronto’s population grows and urban space becomes increasingly limited, the value of land has soared. This has prompted property owners to consider alternative uses for their valuable plots, often opting for lucrative development opportunities like highrise condominiums, office spaces or retail complexes — even the design of mixed-use projects: where residential buildings meet commercial space, a common design in Vancouver that is now seemingly populating the areas of Toronto’s Corktown and Riverdale neighbourhoods. 

“The old style of dealerships, where you’re parking cars on it, is a tremendously inefficient use of land and resources,” said Justin Sherwood, a senior VP at the Building Industry and Land Development Association. “That’s why you’re seeing the type of traditional dealership that you think of the ’70s and ’80s — with large lots and a lot of cars — disappearing and why you’re seeing more compact, vertical dealerships coming out.”

Sherwood highlighted this idea by pointing to the bottom of the Don Valley and Gardiner where multi-story buildings, with car storage on top — like BMW — are found.

“And it’s not just car lots: it’s anytime you have an inefficient use of land you’re going to start seeing those things — like drive-in theatres,” he said. “More people are building up instead of out. And what does that mean? It means you’re going to have some new neighbours, and that’s a good thing.” 

These changes reflect the evolving needs and preferences of Toronto’s diverse population, as the city embraces modern living spaces and vibrant mixed-use communities.

And according to Sherwood, this redevelopment can be attributed to 2005 when the Liberals implemented the Growth Plan for the Greater Golden Horseshoe — a government policy that helped ensure growth and development in the area was co-ordinated and efficient, resulting in the creation of more upwards buildings and limiting the expansion of boundaries at the edge of communities. In doing this, it started this increasing trend of having condo buildings built in urban environments and that drove property values up.

Over the years, car dealerships have occupied prominent locations throughout Toronto, with the strip of Eglinton Avenue West coined as the Golden Mile, along Dufferin Street, or at Yonge Street and Steeles Avenue, for example. However, with the city’s rapid growth and increasing population density, the demand for residential and commercial spaces has soared. 

“You can’t afford to take up acres and acres of land for parking lots, that day is over,” said city councillor Mike Colle. “And in their places are much-needed residential developments.” 

A major change like this is occurring in the Dufferin Street area, in Colle’s ward, which was once the car dealership capital of Canada. Currently, car dealerships in the area, like Toyota, Honda, Buick and GVC, Ford and Mazda, are subject to development projects. 

“[With these developments], you’re going to have a real sense of community and neighbourhoods there, because you didn’t have that because of all the car dealerships,” said Coun. Colle. “Now you have places for people to live, shop, have recreational opportunities, new parks, so it becomes a neighbourhood place rather than a car place.” 

But this disappearance isn’t just being seen in the Dufferin area, but is also impacting other Toronto areas like Leslie Street and, notably, Leaside.

“They’re a relic of the past. You can’t do it anywhere in Toronto, and they’re not coming back, because of the price of land,” he added. 

Another critical element shaping the changing landscape is the shift in consumer behaviour toward virtual car sales. With many people turning to online shopping during the pandemic, this has further been reflected in how Torontonians buy their cars. 

Now that potential buyers can research, compare and purchase vehicles online, this has greatly reduced the need for physical car dealerships to maintain large physical spaces for showcasing and selling cars. 

“Dealerships realize they could use the new model of selling cars — which is replicated at Yorkdale, where we have boutique showrooms, where you go online or see one car there. That’s the new model being used everywhere. A lot of the shopping is even done online with cars,” said Colle.  

And though some may feel nostalgic for the familiar car dealerships that have been part of Toronto’s landscape for decades, these changes also bring new opportunities and advantages. 

“It’s a positive transformation that’s going to turn a street of parking lots into a people place,” said Colle. “It’s a wonderful positive story for changing Toronto for good.” 

Article exclusive to STREETS OF TORONTO