The watchwords for the GTA real estate markets in 2017 will be adaptation and innovation, as residents, the building industry and governments alike face the challenges of ceaseless demand, limited supply and record-high house pricing.

Housing affordability has never been a more critical concern.

In 2016, the average house in the GTA made more money than the average household, with detached home prices breaking the $1 million mark and ending last year at $1,016,145 — a mind-boggling 23.1-per-cent spike year over year, according to the Toronto Real Estate Board.

The price of condominiums, typically considered the more affordable solution compared with detached homes, increased by more than 16 per cent year over year across the GTA.

So what do people do when it becomes too expensive to buy a home, of any kind, anywhere? They rent. And renting will likely play a greater role in the GTA housing market in the years ahead.

In his recent book, The Wealthy Renter, author and research analyst Alex Avery touches on some of the key benefits of renting, including freedom of mobility.

But what happens if renting also becomes too expensive?

Many cities around the world have been experiencing this and they’re turning to a concept known as co-living. It’s actually a new name for an old idea. Rooming houses played a vital role in the urbanization and formation of cities in the 19th century, providing workers with accommodation via shared housing.

Today, in expensive cities in Europe and the U.S. with significant populations of single people, co-living is transforming housing from an asset class to a consumer product. In the U.S., the average age of couples marrying is now seven years older than it was 40 years ago and the divorce rate is approximately 50 per cent. That means there’s a large number of single people looking for places to live.

Emerging platforms such as The Collective in London and Common and WeLive in the U.S. (part of the co-working platform WeWork), offer plug-and-play accommodation solutions, with everything included — right down to the fork — at a range of prices and term options. Co-living provides residents with flexibility and freedom in a community environment. And co-living spaces are typically housed in adaptive re-use structures, keeping carbon footprints small.

The federal government introduced an Innovation Agenda for the nation last summer and the Greater Golden Horseshoe is positioning itself as a global cluster for innovation.

This will create tremendous opportunities. But it will take more than simply skilled talent to foster a thriving innovation ecosystem. It will require an effective housing solution, yet housing is, for some reason, not part of the government’s proposed Innovation Agenda.

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In an era of vast technological change, at a time when we can take the “shop” out of “shopping,” the “place” out of “workplace,” people still need to live somewhere and innovations such as co-living will need to be explored.