Those days were crazy, I remember vacancy rates in the area of 0.5% in the inner city like 10 years ago.
Yeah competitive apartment bidding was wild, where landlords had more applications than apartments. Plus the high year-over-year rent increases. A brief taste of regular life in Toronto and Vancouver.
Thinking of the scale of growth, Calgary recently is averaging 15,000-25,000 net population growth per year. That works out to about 7,000-10,000 new households formed per year. So to stay even to today in a supply/demand sense, we'd need to produce 7,000 - 10,000 units per year, every year at this growth rate.
I forget where we are at, but inner city has like 4,000 ish units under construction? Let's say on average 1,000 units are completed each year, every year, forever (3 - 5 towers worth). That's still only 10 - 15% of the overall households needed to keep even (if that's the goal). That's actually a lot of development to always have in the pipeline.
Of course, it's more complex than what I just said. Other factors that impact supply and demand :
- It's not just number of households by type; not every new house is the same and wants the same amenities, location, price (young/old, owner/renter, housing type, family size etc.)
- Growth trends - as the city grows, commutes stretch, location premiums start getting more apparent. This would impact demand in new ways.
- Lifestyle trends - better apartments with more amenities and better urban communities with more amenities are influencing location and housing choice trade-offs. Generational shifts between ownership, renting and the timing of household formation can influence what people afford, when and where.
- Economic trends - household incomes and housing prices are a big factor. Even with Calgary's relative affordability compared to other bigger Canadian cities there's still a lot of people that aren't entering the house ownership market today, let alone in the future if prices go up. Taken to the extreme, Toronto doesn't really have any new households that are formed buying houses on their own - the entire market is captured by condos as home ownership is locked largely into the market that has multi-generational wealth to spend. This is completely reverse from 40 years ago.
Taken together, I think the premium rental in the core thing isn't as much of a premium as it might appear. Depending on the situation it can still be cheaper than owning, but with more amenities and features than an older, much cheaper apartments in the area. All the regular benefits of renting still apply, albeit at a higher monthly price. It's also provided a different housing choice that didn't really exist 10 years ago, except on the condo rental secondary market. Plus every premium rental today becomes the more affordable option in 20 years as those amenities age.
TL/DR: fears of saturation seem a bit overblown, more choice and supply of units are good things for the inner city.