Hamilton is caught in the middle of a paradigm shift that is affecting communities across the country, and one that is no stranger to our American friends. Increased emphasis on urbanization by municipal corporations, business-owners, and community leaders is causing Hamiltonians to revisit in droves the idea of living and working downtown. From trendy restaurants and cafes taking chances on previously less-than-desireable areas to bike lanes and one-to-two way street conversions, the Hammer is attracting homeowners and renters from all corners of the city back to its Core. Millennials (those born between the early 80s and mid-90s), Gen X-ers (born between mid-60s and early 80s), and Baby Boomers alike (born between the mid-1940s and early 60s) are choosing to call downtown home, for themselves and their businesses. Infill is becoming a hugely profitable commodity.
At the same time, many Torontonians are considering Hamilton – with its abundant trails, waterfalls, and comparatively low property values. This has created something of an internalized conflict for Hamiltonians. On one hand, you have Toronto buyers moving into the city and setting up shop here, bringing previously unthought of business ideas, and with them they’re bringing employment, restaurants, things to do and see – and all the while adding to Hamilton’s ability to generate those crucial and sought-after tourism dollars. They are also moving here in record numbers, and generally seem more comfortable paying Hamilton’s increasing prices. As a result, Hamilton residents are beginning to feel the squeeze of this gentrification. Inventory has dropped to such lows that prices are now increasing at unprecedented values – home values alone are increasing at an average of 14.2% per year in Hamilton. This has in-turn also created an extremely high demand for affordable housing.
With these factors in mind, a question needs asking and to be subsequently answered: If an investor wants to set up shop somewhere in the city, what are his options? And what should he or she build?
The Where:
First up: Kenilworth Avenue. Originally a thoroughfare leading into the Dominion Steel Casting Company (Dofasco) Industrial Park, Kenilworth held many automotive, industrial, and manufacturing businesses and facilities, many of which were built or established to support Hamilton’s massive steel industry. As steel left the city, so too did many of the businesses that relied upon the industry for their livelihood. Over the last several months, the City of Hamilton has begun efforts to heavily incentivize development on Kenilworth, offering numerous loans, grants, and reduced development charges, all designed to encourage development on the street. The value of these incentives cannot be understated. In addition to providing monetary assistance for developers wishing to build on the street, they imply a certain level of cooperation with City staff and officials that is not always easily acquired.
Second: Barton Street. For many years, Barton Village was its own commercial district, home to numerous restaurants, cafes, and retail stores. During the 1980s and late 1990s, Barton Street went through a substantial decline as did the steel industry and its employees, their main source of income. Today, most of the former sites of Barton’s anchor businesses remain shuttered and boarded, their owners waiting for the area to bounce back, much in the way several neighbourhoods around Hamilton have in the last fifteen or so years.
These same areas – Locke, Ottawa, and James Streets have all undergone monumental, positive change over the last decade. Locke Street, for instance, began as an quiet antiques district. Over time it has grown into one of Hamilton’s most popular commercial districts. Ottawa Street, specializing primarily in textiles and fabrics has become East-Central Hamilton’s commercial hub, with its own unique restaurants, galleries, and furniture stores. James Street North, one of, if not possible the, most popular district in the city, is site to an incredible transformation, one from derelict neighbourhood to thriving arts community. However, depending on the investor in question and the state of their start- up capital, these districts may not meet their needs.
They remain supremely attractive, but if one is looking to start small and attain a high rate of return on that investment, they should consider Barton Street. It remains the last of Hamilton’s vibrant, affordable districts. Conveniently located perpendicular to Ottawa and James streets, anchor businesses are beginning to pop up along the street and are thriving, demonstrating to doubters and naysayers that, like Ottawa, James, and Locke before it, Barton is on its way up.
The What:
Apartments within mixed-use developments. As property values continue to increase, housing affordability within Hamilton will become more of an issue and conversation than it is today. As such, there are opportunities all over the city for mid-density, multi-family or micro-unit developments. At the same time, Barton Street is still within the early stages of its development, meaning many amenities, such as grocery, are solely lacking. There are also still numerous vacant mixed use properties that are continuously up for sale at prices that are no longer available in the more developed districts of the city. These mixed-use buildings would serve to fill two of the challenges Hamilton currently faces: A lack of affordable housing, and a lack of shops and services along Barton Street.
Barton Street and Kenilworth Avenue are ripe for the picking, remaining mostly untouched by urbanization and gentrification. Properties that have sat unused for years are now being listed on MLS at tremendously low prices. The demand is there, and the supply is most definitely there as well. If an investor is looking to make the move to Hamilton and get a healthy return on their investment, Barton and Kenilworth are sound choices.
If you’re interested in learning more about the best investment opportunities in Hamilton, my team and I are always happy to help. Give us a call or stop by our downtown office!
