Growing up, Luka Kot spent many years living in a Toronto rental apartment building. Today, he develops purpose-built rental projects for the same operator in whose building he once lived.
For over seven years, Kot has been the development manager for Medallion Corp., a leading high-rise rental property owner and operator with holdings across southern Ontario.
Green Street News spoke with Kot about how his experience shaped the way he develops Medallion’s rental buildings, what roadblocks are still impeding development and where the firm is looking to build next.
How did living in Medallion rental buildings growing up influence how you develop now?
I grew up in an immigrant family – my father came first and then brought me and my mother over. I was four years old and it was a purpose-built rental community of four apartment buildings built around a communal park. It was a great upbringing in the sense that you have great common spaces and gathering areas where you actually have real neighbors, real community – it’s like the idea of the village raising one another. The site superintendent was somebody everybody knew by name, somebody that looked over all the kids and was somebody everybody could go to speak to. There was a real sense of community that way. I think that’s very important, and I think I’ve carried that through in terms of my role here at Medallion.
We have to build neighborhoods and communities that have a lot of common gathering spaces that people feel safe in, that are secured, that are clean and that are well maintained. And that speaks to the process of Medallion being not only a development company, but also property management company. Once you build the buildings, you don’t just leave and turn your back on them. It’s a long, hard process of the owner being part of the community as well.
You mentioned common areas, but are there any other ways you find helpful to facilitate community within a rental complex?
Larger units for sure. I grew up in much larger units, and here at Medallion, we’ve always built larger units than, say, the condo community has. Also laundry spaces. Now, everybody has their own laundry spaces in their units, but before it was a common area where people would see each other every day.
We also feel it’s important for property management to have a role in creating opportunities for the community to come together. We’ve had some great success with tenant events that brought people from different buildings together to meet and interact in a way they might not have otherwise.
Is there anything you think rental developers are overlooking from the tenant perspective when they’re developing new buildings?
I’m not sure anybody is overlooking anything. I think just focusing on having larger units, on creating the sense of community, on being able to have a community bulletin board and have more community events and provide those spaces. Actually let your residents know that such spaces exist to be reserved or rented out – the party rooms, the outdoor areas.
We had a tenant host baking nights in one of our buildings. We had an outdoor market at Emery Crossing with local food and service vendors as well. You could have markets, you could have events, you could have fundraisers, you could have anything.
You want to make sure they know that this is their home, and even though it’s a shared building that you’re living in, this is everyone’s home and it’s there for your use and for the benefit of the community. I think focusing on things like that, I think we all could do better.
Have you seen any shift in terms of what tenants are wanting from a rental?
We’re always adapting here at Medallion with whatever is going on in the industry in terms of community demand. Remember, we have rental buildings so we have to sell that unit again and again forever as opposed to a condo where you’re selling it once. That’s why, in general, units are a little bit bigger.
There’s much more of our demand for two-bedrooms for sure, within Toronto at least. The split used to be much more one-bedrooms, but now we’re looking at more of an even split between two-bedrooms and one-bedrooms. The reasons for that are professionals that can afford the one-bedrooms will do so, there’s families wanting the two-bedrooms, and then I think there’s a lot of people starting off in their careers – and we know how hard it is out there – that will share a unit.
Personally, my experience when we came here was sharing a two-bedroom apartment with my uncle and his family until my father was able to afford a separate unit. That’s a story probably as old as time, and I am certain this plays out today as well.
We’ve seen a shift in the attitude towards renting, especially in the major cities like Toronto and Vancouver. Is that something you expect to trickle out to the smaller markets?
We hope so, and at Medallion, we’ve been trying to do that. We’ve gone out to London, we’re in Hamilton, Ajax and Whitby, and we’re looking every day into other communities. We certainly think it’s important to have all styles of housing available.
I speak often with professionals and municipalities about the idea of a unit as a public benefit to society. A unit, whether it’s a rental unit, affordable housing unit, all the way up to a luxury unit or single-family house, anything we build is something for somebody to live in and start their lives in.
When you’re raised in a rental building like I was, you don’t consider that as anything different. You’re not comparing the tenure and ownership, you’re just establishing your life. I think that any units we could provide to the market, given that there is such high demand and we want to continue growing in this country, I think we have to start considering them as public benefits irrespective of whether it is public or private development – in other words, who the provider is.
We hear from developers all the time about hurdles to getting shovels in the ground. What’s the biggest hurdle you’re dealing with right now?
It’s just the uncertainty in the market. The length of time it takes for development approvals. I think there’s lots of good things going on, and the government is trying to help, but any roadblock or deterrence in an unstable market is hard. We have to pencil in this project to make sense not just for the day we start, but also 10 years later and 20 years later.
Municipalities have to be helpful in terms of processing and getting approvals in quicker, again, creating that certainty. I think there’s a lot of taxation, the development fees and whatnot, that you have to pay that have a heavy impact on projects.
Have any of the government measures like the GST cut or MLI Select program helped you meaningfully to get rentals built?
The GST is a significant help – we hope that stays in effect. And like I said earlier, any kind of tax or any fee or charge that you’re paying out of development, especially on purpose-built rental, all those things matter, and at the end of the day, the more wiggle room we have to make a viable project, the more we can put back into that project.
Are there any new cities you have your eye on in terms of future opportunities?
Medallion has done a really great job on multi-phase, high-rise, purpose-built rental development where we are revitalizing existing neighborhoods. We went into Ajax and we did large projects in the downtown area. We’re doing one in London right now as well, which is over 600 units in two towers on the old Victoria Hospital lands. At Finch and Weston [in Toronto] – this is my pride and joy – that’s over 3,000 units on an old commercial site, now our Emery Crossing community.
These are neighborhoods where they haven’t had development in a few decades. Now we’re seeing [bus rapid transit], we’re seeing the transitway on Finch; in London, they’re catching up. Medallion always looks into areas like that in terms of what can we do and how we could provide because we believe that the rental product is a good one, and it will be successful in those neighborhoods.
We take pride and joy in terms of being owners here. The same people that I grew up with 40 years ago, they’re still here and will be for the next 40 years, so we want to be part of those neighborhoods and those communities for the long haul.
