A stunning Victorian era mansion with a large pool and deck chairs in the foreground

For a paltry $7.5-million, this massive five-bedroom, 7-bathroom, Rosedale mansion can be yours. A quick ten minutes walk according to Google Maps to Toronto's second least-used subway stations, this beautiful Victorian mansion is why Toronto is in a housing crisis it will never claw its way out of.

a map tile for house sigma, which shows a large lot that creeps into the surrounding ravine that goes right to the intersection of Park Road and Rosedale Road

11 Pine Hill Road has two different co-op apartments within 500 meters from the era when areas like Rosedale and the Annex did their fair share of densification. Eventually, the anti-densification movement of the '60s and '70s (aided and abetted by Jane Jacobs) were able to prevent apartments from going up in areas like Rosedale and the Annex as an attempt to resist the encroaching tall buildings on areas that were, at one point anyway, meant for the good and upstanding families of Toronto rather than those nasty apartment people.

Now gorgeous mansions like this are protected by innumerable city policies -- today we're focusing on Heritage Conservation Districts. Rosedale (specifically South Rosedale), first became a Heritage Conservation District in 2003 because of its unique character. Per the report:

"...[South Rosedale] was one of the first few suburban developments north of the city. The residential community has a clearly discernable character as a picturesque suburb1 with varied architectural styles dating back to the mid 1800s."'

The City of Toronto explicitly defines them, in part, as "The policies aim to conserve and enhance the social, cultural and architectural history of a district, while anticipating and managing contextually appropriate growth and development."

Now, in the case of 11 Park Hill Road, there's an obvious naive question here -- how does a pool conserve and enhance the social, cultural and architectural history of a district?

While the stated goals are nice, heritage conservation districts in practice are an extractionary tool for homeowners to increase their property wealth.

That's just not me saying that -- heritage groups and academics agree! In a 2012 UWaterloo study, when the authors compared HCD property values against their neighbours, buildings in HCDs generally performed better (or at least average) in comparison to their peers.

A section of the study from the UWaterloo study mentioned above. The quoted text shows a graph showing two horizontal lines showing one property's projected sales history. The red line -- average sale price within 1km -- starts at 200,000. As of 1997 when the heritage conservation district gets designated, the line is just under 200k. It has slow growth until its max at 400k in 2010 and then dips again to 390k in 2011. The blue line -- which shows various sale price events -- tells a different story. The property starts at roughly 190k in 1994. Its next sale is for 600k in 2003 -- when the red line shows average sale price within 1 km to be 210k or so. The next sale event is in 2004 at high 700k with the red line at lower-tier 200k (225k or so). The last sale price in 2009 shows that it was just under 1 million dollars, where the average sale price within 1 km was just under 400k. There is text above the graph that reads: "According to the resident surveys, owners do not think that designation has an impact on their property values, and will not have an impact on their ability to sell their property in the future. The data from GeoWarehouse indicated that 36 of 108 properties had sales histories. Of these 36 properties, 17 had above average sales value increases. Fourteen properties had average sales histories and five of the properties performed below average. The majority of properties are performing at or above average, indicating a neighbourhood that is doing better than its non-designated surroundings"

In 2019, Ontario Heritage Trust studied assessment growth in HCDs -- what you would pay on property taxes, not market values. Their analysis showed that "Between 2010 and 2016, all but one of the HCDs had greater average increases in assessed value than the average assessed values in their wards (see Table 3). In 2010, the average assessed value of Hamilton’s HCDs was 78 per cent greater than their respective ward averages. By 2016, this difference had grown to 87 per cent." THey concluded: "This analysis illustrates that Hamilton HCDs tend to be clusters of residential properties that are assessed at a higher value than their counterparts in the rest of the ward. Further, this value increases at a faster rate than the surrounding areas in the ward. Thus, it appears that heritage designation in the form of a conservation district does not negatively impact the value of properties. Rather, it may enhance value over time."

Ahhh, but that's just assessed value not market value. There's so many confounding variables anyway so really who can say if HCDs are actually

In 2023, McMaster did a complex study trying to control for all the variables proponents use to obfuscate the impact of these policies. They tried to control for year, designation status, number of rooms, lot depth, lot frontage AND building material. Both of their models showed the same thing:

"Holding everything else constant and considering the year fixed effect, heritage designations are associated with an increase in sale price, on average" for their first model.

Their second model which tried to control for individual address in addition to the above, concluded "Holding everything else constant and considering the year fixed effect and the individual address fixed effect, heritage designations are associated with an increase in the sale price, on average."

HCDs as a policy tool have been used extremely successfully in the last few decades as a way to backdoor massive real estate wealth growth at the expense of everyone else. Their usage has almost exclusively been implemented in wealthy areas of the city like the east Annex and Rosedale.