Commercial Real Estate Brokers serving the Greater Toronto Area and GGHA
Key Characteristics of a Holdout in High-Density Land Assembly:
1. Strategic Position:
The holdout property is often located:
- At a key corner or access point.
- In the middle of an otherwise assembled block.
- Adjacent to roads, infrastructure, or transit nodes, making it critical for layout, density, or access.
2. Motivation to Hold Out:
- Price leverage: They expect a significantly higher price.
- Emotional attachment: Often in family homes or long-held properties.
- Development skepticism: Concerns about future noise, traffic, or neighbourhood change.
- Speculation: Belief that land value will rise further or planning policy will become more favourable.
Consequences of a Holdout in High-Density Projects:
For Developers:
- Site inefficiency: Reduced FSI/GFA potential or awkward site layout.
- Design constraints: Sub-optimal building envelope or access challenges.
- Increased soft costs: More time on planning, legal, or redesign work.
- Project delays: Especially when needing all parcels to meet minimum lot size or frontage.
- Risk of downzoning or redesign: If the municipality proceeds with secondary plans that treat the holdout land differently.
For Holdout Owners:
- Loss of negotiating leverage over time as developers may proceed without them.
- Isolation risk: Surrounded by construction or future buildings, losing value or livability.
- Expropriation (rare): In cases involving public interest, such as infrastructure, roads, or affordable housing.
Lost Development Value in High-Density MTSA Zone in Toronto
The properties at 38 Nipigon Ave, 5 Nipigon Ave, and 8-10 Abitibi Ave did not participate in the development, and are therefore losing development value in this arrangement.
The illustration above depicts 5 Nipigon Ave and 8-10 Abitibi Ave as unable to put a tall building on their lots, therefore losing their development value.
Mitigation Strategies:
For Developers:
- Early engagement: Approach key owners before making offers to others.
- Tiered offer structures: Incentivize early participation or provide step-up bonuses for corner parcels.
- Land swap or joint venture: Allowing holdout owner to retain partial ownership or equity in final project.
- Use of option agreements: Lock in future purchase subject to planning approvals.
For Holdout Owners:
- Hire experienced legal/planning counsel: Understand their rights and the planning framework.
- Assess long-term risk vs. reward: Weigh personal value against market trends.
- Consider vendor take-back or equity participation: Creative ways to maximize value.
Don't be the last holdout
If you own land in Ontario, especially in high-growth areas, now is the time to act.
Connect with our expert planning and development team today. We’ll help you navigate the challenges of high-density land assembly and engage at the right moments to protect or unlock your land’s full potential. Don’t wait - landowners who move first shape the outcome.
This narrative is provided by Arash Fatemi.