For more than a decade, the concrete stump of an aborted office tower in the middle of the financial district stood as a prominent reminder of the hubris of a city where boom went bust — and never returned. A series of failed attempts to revive the Bay-Adelaide Centre became a monitor of the entire district’s health and Toronto’s fate as a financial centre.

But when the stump’s new owner, Brookfield Properties Corp. , finally announced a plan this spring to pull down the dismal monument and build a new mixed-use complex in its place, hardly anybody noticed. The reason: Toronto today is in the grips of an altogether different boom, one that is shaking the city far from the core. In the new context, the Brookfield towers will just be a few more in a high-rise forest that is thickening with surprising speed.

“There’s no question that we’re in a building boom,” says leading land-use lawyer Stephen Diamond of McCarthy Tétrault LLP, who has stickhandled hundreds of storeys of new development through city hall on behalf of various clients in the last few years. “I don’t think that there’s been anything like this interest in building in downtown Toronto since late 1960s, early 1970s.”

The difference now is that almost all of the downtown projects are residential, and their impact is only beginning to register. But it becomes more obvious with every approval for another 50- or even 60-storey condominium tower, built at densities unknown in Toronto since the great bust of 1989.

If the residential boom has reached a peak, it may well have done so when one of Diamond’s clients, Isadore Sharp of Four Seasons Hotels, agreed to pay $2 million to a public school in compensation for the morning shadows that will be cast by his new twin-tower, five-star hotel in Yorkville.

Before that, it was still hard to believe there was any serious oomph in the new boom, which many have derided as speculative, and which is centred mainly in the market’s low and middle range. But Sharp’s latest project is only one of four that will include luxury housing built in conjunction with five-star hotels. The hotels are loss leaders included in the projects, according to Diamond, who has represented three of the four developers, in order to justify a premium for the adjoining condos. So the oomph is serious.

Still, the Brookfield development deserves special notice because it is the only one thus far that includes offices as well as apartments. Although other developers are also beginning to test those waters, the absence of new office development has made it difficult for business to embrace the new boom.

From 1999 until 2005, there were 89 buildings comprising 12.5-million square feet of new work space built in Toronto’s suburban belt, according to Juri Pill, chairman of the Toronto Office Coalition, which represents the owners of 55-million square feet of mainly downtown office space. But over the same period, the city proper attracted only seven new office buildings comprising 1.6 million square feet, one eighth the amount, he adds.

Even if the Brookfield project and others announced went ahead, “the ratio would still be about three or four to one,” Pill says.

A major reason for that is a combination of municipal and provincial property-tax policies that penalize urban development while rewarding investors who abet the “job sprawl” all governments are otherwise trying to forestall, according to the office coalition and many experts.

In nearby Halton Region, businesses pay provincial property tax at a rate of 1.37% of their premises’ assessed value. In Toronto, they pay at a rate of 2% for the same services. City businesses overpay that tax alone by $300 million annually, according to the coalition. “It’s inefficient, it’s counter-productive and it’s just bad policy,” Pill says.

Without disagreeing, Diamond is more sanguine about the future: “As long as people want to live in the city and particularly in the core, eventually that’s where the source of employment is going to be.”

Eventually, the jobs will follow the people downtown. In the meantime, it remains a strangely lopsided boom. IE