Justin, one issue I'm not sure anyone is looking at is the mismatch of what is actually being built versus needs.
In particular, builders of condos and apartments seem stuck in the idea that only young childless singles/couples and empty-nesters want to live in condos and apartments. So condos and apartments are nearly all bachelor, one, and two bedroom. Meanwhile, the actual demand for 3 and 4 bedroom condos and apartments is completely neglected.
I've read reports of even Toronto having a glut of small apartments, while the market for larger dwellings is screaming.
Do you see any of the plans on offer having any impact on this failure of the market?
I've been saying this for years. I feel like I've been vindicated recently.
My suspicion has always been that the push for smaller units has been with an eye to maximizing investment potential. A bachelor unit, is an easy parking vehicle for foreign capital (Chinese officials looking to hide money, e.g.) but it's also easy to list for short-term rentals and/or AirBNB. You can, obviously, fit more of these units in a building than if you had lots of 3/4-bdrm units.
I think you've seen this *start* to shift in recent years, but we're still living with the effects of this distorted demand. Toronto's waterfront is littered with terribly-built high-rise condos of 1bdrm condos that *nobody* wants to live in.
Liberalizing where we can build more densely will have an immediate and measurable impact on this. So both the LPC and CPC proposals should solve for this. BCH, if done right, can prioritize these bigger family units and help flood the zone with supply ASAP. But you're totally right to flag this as a *huge* problem.
As someone who was raised in one of those CMHC houses and who now occupies a prefab, I feel eminently qualified to voice an opinion. ;^)
I wasn't there at the time, but I think the social and economic environment during and immediately after WWII was different from today, so, while nostalgia is powerful electioneering, will it fit into today's market? Besides, who the devil will work the details? - there is no C.D.Howe in the Cabinet.
The problem is that everybody wants/needs proximity, but there isn't enough of it.
Pushing cities to densify won't work because cities are run by people who are elected by those who don't want density. Maybe, over several generations of succumbed apartment living, a new urban-tolerant population will evolve like exists in the large centuries-old cities, but right now, we're new at this.
Someone owning expensive land doesn't want to build cheap houses. If you want to socialize house-building, you have to socialize land ownership and servicing. Right now, cities are surrounded by land owned by housing developers, and (in the case of Ottawa, at least) are called up a few at a time. If you were sitting on valuable land and your name came up, you would make the most of it, not sacrifice your holdings for some 800-sq.ft. CMHC designs.
One way to solve the pricing problem is to reduce demand. Demand for city housing, I mean. Why do populations flock to the cities? Because that's where the jobs are. But, (I heard this estimate from decades ago) 6 out of 7 jobs are secondary jobs that serve each other and the 7th job - the primary one. So, stop those primary jobs from being moved/created in the cities, and move some of them out. Governments could do this easily.
I think those are all valid points, but there's a tension in them: Cities are the most economical and efficient, and if we don't have cities then we'll need to convince people to decamp elsewhere.
But I think the crux is: Ok, how do we make cities work? I'm not so fatalist that our municipal leaders are *that* intransigent. (Though, believe me, I'm close!)
Toronto electing Olivia Chow is a good sign. Growing urbanist movements everywhere also bode well.
I chuckled over the past few years, watching some people scare-monger about 15 minute cities, and finding out that they ended up doing good PR for urbanism ("having work, school, and services within a 15 minute car-leas commute? Where do we sign up?!"
I actually think there's a policy that could flip the switch immediately: Deamalganation. Make cities into cities again. Return political power to those who want efficient housing.
Anyway, you're totally right that it won't be as easy as just imposing this housing plan onto the public. But I think we've got the momentum behind these ideas now, and there's no use hesitating.
Good article Justin. You've touched on a number is causal issues creating a lack of affordable housing, but there are more foundational ones and this is actually a global issue. (I'm in the building industry and have been working in a larger community trying to find solutions.) In addition to what you have already mentioned, global problem influencers are essentially 1) economics: that have created disparity furthered by Private Equity (PE) devastating real estate of value by feeding share-holders creating a commodity out of housing; 2) Short-term rentals which turn real estate housing investments into a cash-cow not living accommodation - (Barcelona outlawed Short-term rentals as locals had no where to live); 3) communities designed for cars rather than people creating sprawling neighbourhoods with zoning restrictions on everything and large unattended aging infrastructure problems. More public transport would assist with this problem; 4) NIMBY's, which are encouraged by municipal planning processes, making development projects take years and huge investments in planning/re-planning; 5) siloed departments in all 3 levels of government not working together which drags-out all development processes; 6) lack of capital planning for infrastructure renewal and expansion. Every municipality should have at least a 10/yr plan updated annually and funded; 7) a lack of trades people that's why the CCA lobbies the Feds for more immigration. Funding for this should not come from development charges that actually get passed to the renters/owners of the development; 8) the building industry productivity has been flat for decades due to lack of investment in new technologies and lack of collaboration within the industry. Ideas like off-site and modular construction have been around for decades (eg: Habitat '67) & have been slow to progress - however, more modular businesses are appearing and being supported. This community is growing internationally as well. New ways of building costs less and gets done more quickly. It's an easy scape-goat to point to immigration, however it's much more complex.
Thanks for covering this topic. Currently, I'd suggest the Liberal's have the most effective approach to solving this problem, even though there are still gaps.
1) I am of two minds about the role of PE. I think there's no denying that it currently has a corrosive effects on some large segments of the market — driving growth into poorly-made high-rise condos that sit empty, or which become ghost hotels; and the systematized reno-viction of lower-income apartment buildings being prime examples. Still, PE wouldn't be attracted by exploiting tight margins if we just had a healthy market to begin with. It strikes me that cracking down on PE might do more harm than good. Better to undermine the business model of vultures, imo.
2) Heavily restrict short-term rentals, absolutely. Montreal does this and it's a godsend.
8) I would love to see Ottawa crack down on aesthetic restrictions on new builds. Setback rules and height bans (Halifax, e.g. generally forbids anything downtown taller than Citadel Hill. Stupid.) You can get a lot of NIMBYism done by inciting "local character."
Basically hard agree on the rest. I'd add in: If you want to take away NIMBYs' power, crack down on public consultations — or find a way to recalibrate them to include the views of future residents, not just existing ones.
Thanks for this, Justin. Policy aside, you mention what I think is one of the biggest problems - the gatekeepers are homeowners like me. A few examples from my Toronto suburb:
- An ad for a new condo building on Facebook attracts a bunch of negative comments. Some are about the per unit expense, but others are along the lines of "condos are ugly," "the roads can't handle more people" and "this place is getting too crowded." Even one next to the 401 with the best access to transit in the area, same thing.
- Similar comments about new subdivisions on the outskirts - "what about the farmland?" And of course, the roads. The municipality is accused of greed for allowing any of this.
- Even my local Facebook town heritage group (I'm old) is awash in comments about how it sucks that this former small town is now basically a city and how it's "too crowded." The best ones are complaining when a non-interesting / non-historic local building gets torn down and replaced by housing. Basically "that building was there when I was a kid. How dare they tear it down to house people."
- I read the Globe & Mail and am afflicted with an urge to look at the comment section. Every article on housing or zoning immediately turns into a b*tch-fest about immigration. Putting aside the obvious subtle and not so subtle stuff of what people say about immigration, there's also an underlying "we shouldn't have to make these changes to our cities to accommodate people who aren't me or who don't live in a single detached house like me."
- A specific example from my town. There's a proposal to replace a retail plaza with a multi-storey residental building in a predominantly single family detached area. It'll basically be the same footprint, but the neighbours are suddenly advocates for the daycare centre in the plaza and how tragic it would be to lose it. Straight up NIMBY.
It's constant and I think this is typical of every city. And it's infuriating when Poilievre talks about liberal city gatekeepers when his suburban voters basically say the same things. Red tape and barriers to housing are there because we want them there.
I work with a bunch of millenials. They have decent jobs and work hard, but a dispiriting number of them either have huge mortgages or worse, still have to live with their parents. It's really sad. Strictly a matter of timing and luck that I bought my house for a good price many years ago.
Turning into a bit of a rant, sorry. I'll add that development charges are a symptom of the bigger problem of funding municipal government in this country. They're supposed to help pay for the growth - developers build the streets and infrastructure in a subdivision, but not the higher capacity needed for roads or transit to get people to the subdivision's gates. Or additional water / sewage capacity. Or arenas, fire stations or libraries. Depending on how it's done (e.g. sprawl), I've read that adding housing can be a loss for municipalities in the long run. But of course, adding $50-100k to a house right out of the gate is a huge barrier to affordability. Stable funding for municipalities from other sources would be a big help.
Great article. I’m looking forward to the Libs and the Cons trying to outdo each other by making their housing plans better.
One thing in your article that is misleading is that you say Vancouver is zoned 80% single family. That’s no longer true. The BC NDP has changed zoning rules throughout the province to allow 4-plexes (and 6-plexes in some places) throughout all municipalities.
The BC NDP have some great housing plans. I hope they work out.
I disagree, actually. Yes, we welcomed too many people over the past five years — we didn't even mean to. We're going to reduce levels to compensate for that fact, and I suspect we'll be back to our projected population levels in a few years. This level is what's required to satisfy the labour market and long term population replacement, any less and we'd be seeing labour shortages (like we had right before the pandemic.)
The problem is that we didn't plan to manage even the population growth targets we set for ourselves.
The problem with the Conservatives' plan, as envisioned in Poilievre's private member's bill, is that it's unworkable.
Jennifer Robson did the analysis here, which also includes the fact that the funds Poilievre wants to use for his carrot/stick are directed to provinces and not municipalities.
I have been advocating for more affordable housing for 20 years now. It has felt like pointlessly beating my head against the wall. Very little happened as the need grew and grew. The new Liberal plan gives me renewed hope. Thank you for your excellent article! I will resume bugging my local politicians.
Justin, one issue I'm not sure anyone is looking at is the mismatch of what is actually being built versus needs.
In particular, builders of condos and apartments seem stuck in the idea that only young childless singles/couples and empty-nesters want to live in condos and apartments. So condos and apartments are nearly all bachelor, one, and two bedroom. Meanwhile, the actual demand for 3 and 4 bedroom condos and apartments is completely neglected.
I've read reports of even Toronto having a glut of small apartments, while the market for larger dwellings is screaming.
Do you see any of the plans on offer having any impact on this failure of the market?
I've been saying this for years. I feel like I've been vindicated recently.
My suspicion has always been that the push for smaller units has been with an eye to maximizing investment potential. A bachelor unit, is an easy parking vehicle for foreign capital (Chinese officials looking to hide money, e.g.) but it's also easy to list for short-term rentals and/or AirBNB. You can, obviously, fit more of these units in a building than if you had lots of 3/4-bdrm units.
I think you've seen this *start* to shift in recent years, but we're still living with the effects of this distorted demand. Toronto's waterfront is littered with terribly-built high-rise condos of 1bdrm condos that *nobody* wants to live in.
Liberalizing where we can build more densely will have an immediate and measurable impact on this. So both the LPC and CPC proposals should solve for this. BCH, if done right, can prioritize these bigger family units and help flood the zone with supply ASAP. But you're totally right to flag this as a *huge* problem.
As someone who was raised in one of those CMHC houses and who now occupies a prefab, I feel eminently qualified to voice an opinion. ;^)
I wasn't there at the time, but I think the social and economic environment during and immediately after WWII was different from today, so, while nostalgia is powerful electioneering, will it fit into today's market? Besides, who the devil will work the details? - there is no C.D.Howe in the Cabinet.
The problem is that everybody wants/needs proximity, but there isn't enough of it.
Pushing cities to densify won't work because cities are run by people who are elected by those who don't want density. Maybe, over several generations of succumbed apartment living, a new urban-tolerant population will evolve like exists in the large centuries-old cities, but right now, we're new at this.
Someone owning expensive land doesn't want to build cheap houses. If you want to socialize house-building, you have to socialize land ownership and servicing. Right now, cities are surrounded by land owned by housing developers, and (in the case of Ottawa, at least) are called up a few at a time. If you were sitting on valuable land and your name came up, you would make the most of it, not sacrifice your holdings for some 800-sq.ft. CMHC designs.
One way to solve the pricing problem is to reduce demand. Demand for city housing, I mean. Why do populations flock to the cities? Because that's where the jobs are. But, (I heard this estimate from decades ago) 6 out of 7 jobs are secondary jobs that serve each other and the 7th job - the primary one. So, stop those primary jobs from being moved/created in the cities, and move some of them out. Governments could do this easily.
I think those are all valid points, but there's a tension in them: Cities are the most economical and efficient, and if we don't have cities then we'll need to convince people to decamp elsewhere.
But I think the crux is: Ok, how do we make cities work? I'm not so fatalist that our municipal leaders are *that* intransigent. (Though, believe me, I'm close!)
Toronto electing Olivia Chow is a good sign. Growing urbanist movements everywhere also bode well.
I chuckled over the past few years, watching some people scare-monger about 15 minute cities, and finding out that they ended up doing good PR for urbanism ("having work, school, and services within a 15 minute car-leas commute? Where do we sign up?!"
I actually think there's a policy that could flip the switch immediately: Deamalganation. Make cities into cities again. Return political power to those who want efficient housing.
Anyway, you're totally right that it won't be as easy as just imposing this housing plan onto the public. But I think we've got the momentum behind these ideas now, and there's no use hesitating.
Good article Justin. You've touched on a number is causal issues creating a lack of affordable housing, but there are more foundational ones and this is actually a global issue. (I'm in the building industry and have been working in a larger community trying to find solutions.) In addition to what you have already mentioned, global problem influencers are essentially 1) economics: that have created disparity furthered by Private Equity (PE) devastating real estate of value by feeding share-holders creating a commodity out of housing; 2) Short-term rentals which turn real estate housing investments into a cash-cow not living accommodation - (Barcelona outlawed Short-term rentals as locals had no where to live); 3) communities designed for cars rather than people creating sprawling neighbourhoods with zoning restrictions on everything and large unattended aging infrastructure problems. More public transport would assist with this problem; 4) NIMBY's, which are encouraged by municipal planning processes, making development projects take years and huge investments in planning/re-planning; 5) siloed departments in all 3 levels of government not working together which drags-out all development processes; 6) lack of capital planning for infrastructure renewal and expansion. Every municipality should have at least a 10/yr plan updated annually and funded; 7) a lack of trades people that's why the CCA lobbies the Feds for more immigration. Funding for this should not come from development charges that actually get passed to the renters/owners of the development; 8) the building industry productivity has been flat for decades due to lack of investment in new technologies and lack of collaboration within the industry. Ideas like off-site and modular construction have been around for decades (eg: Habitat '67) & have been slow to progress - however, more modular businesses are appearing and being supported. This community is growing internationally as well. New ways of building costs less and gets done more quickly. It's an easy scape-goat to point to immigration, however it's much more complex.
Thanks for covering this topic. Currently, I'd suggest the Liberal's have the most effective approach to solving this problem, even though there are still gaps.
Great comment!
1) I am of two minds about the role of PE. I think there's no denying that it currently has a corrosive effects on some large segments of the market — driving growth into poorly-made high-rise condos that sit empty, or which become ghost hotels; and the systematized reno-viction of lower-income apartment buildings being prime examples. Still, PE wouldn't be attracted by exploiting tight margins if we just had a healthy market to begin with. It strikes me that cracking down on PE might do more harm than good. Better to undermine the business model of vultures, imo.
2) Heavily restrict short-term rentals, absolutely. Montreal does this and it's a godsend.
8) I would love to see Ottawa crack down on aesthetic restrictions on new builds. Setback rules and height bans (Halifax, e.g. generally forbids anything downtown taller than Citadel Hill. Stupid.) You can get a lot of NIMBYism done by inciting "local character."
Basically hard agree on the rest. I'd add in: If you want to take away NIMBYs' power, crack down on public consultations — or find a way to recalibrate them to include the views of future residents, not just existing ones.
All good ideas! Thanks. It’s complicated.
Thanks for this, Justin. Policy aside, you mention what I think is one of the biggest problems - the gatekeepers are homeowners like me. A few examples from my Toronto suburb:
- An ad for a new condo building on Facebook attracts a bunch of negative comments. Some are about the per unit expense, but others are along the lines of "condos are ugly," "the roads can't handle more people" and "this place is getting too crowded." Even one next to the 401 with the best access to transit in the area, same thing.
- Similar comments about new subdivisions on the outskirts - "what about the farmland?" And of course, the roads. The municipality is accused of greed for allowing any of this.
- Even my local Facebook town heritage group (I'm old) is awash in comments about how it sucks that this former small town is now basically a city and how it's "too crowded." The best ones are complaining when a non-interesting / non-historic local building gets torn down and replaced by housing. Basically "that building was there when I was a kid. How dare they tear it down to house people."
- I read the Globe & Mail and am afflicted with an urge to look at the comment section. Every article on housing or zoning immediately turns into a b*tch-fest about immigration. Putting aside the obvious subtle and not so subtle stuff of what people say about immigration, there's also an underlying "we shouldn't have to make these changes to our cities to accommodate people who aren't me or who don't live in a single detached house like me."
- A specific example from my town. There's a proposal to replace a retail plaza with a multi-storey residental building in a predominantly single family detached area. It'll basically be the same footprint, but the neighbours are suddenly advocates for the daycare centre in the plaza and how tragic it would be to lose it. Straight up NIMBY.
It's constant and I think this is typical of every city. And it's infuriating when Poilievre talks about liberal city gatekeepers when his suburban voters basically say the same things. Red tape and barriers to housing are there because we want them there.
I work with a bunch of millenials. They have decent jobs and work hard, but a dispiriting number of them either have huge mortgages or worse, still have to live with their parents. It's really sad. Strictly a matter of timing and luck that I bought my house for a good price many years ago.
Turning into a bit of a rant, sorry. I'll add that development charges are a symptom of the bigger problem of funding municipal government in this country. They're supposed to help pay for the growth - developers build the streets and infrastructure in a subdivision, but not the higher capacity needed for roads or transit to get people to the subdivision's gates. Or additional water / sewage capacity. Or arenas, fire stations or libraries. Depending on how it's done (e.g. sprawl), I've read that adding housing can be a loss for municipalities in the long run. But of course, adding $50-100k to a house right out of the gate is a huge barrier to affordability. Stable funding for municipalities from other sources would be a big help.
Great article. I’m looking forward to the Libs and the Cons trying to outdo each other by making their housing plans better.
One thing in your article that is misleading is that you say Vancouver is zoned 80% single family. That’s no longer true. The BC NDP has changed zoning rules throughout the province to allow 4-plexes (and 6-plexes in some places) throughout all municipalities.
The BC NDP have some great housing plans. I hope they work out.
Focusing on esidential housing is masking a much larger problem. And if we fix the housing problem without solving the underlying problem, we're f'd.
The problem is a combination of population and birth rate changes, and the costs that go with that.
I disagree, actually. Yes, we welcomed too many people over the past five years — we didn't even mean to. We're going to reduce levels to compensate for that fact, and I suspect we'll be back to our projected population levels in a few years. This level is what's required to satisfy the labour market and long term population replacement, any less and we'd be seeing labour shortages (like we had right before the pandemic.)
The problem is that we didn't plan to manage even the population growth targets we set for ourselves.
The problem with the Conservatives' plan, as envisioned in Poilievre's private member's bill, is that it's unworkable.
Jennifer Robson did the analysis here, which also includes the fact that the funds Poilievre wants to use for his carrot/stick are directed to provinces and not municipalities.
https://www.airquotesmedia.com/quotes/building-sologans-not-housing-22oct2023
Paul Wells also did his own analysis of Poilievre's bill here, and also finds it unworkable: https://paulwells.substack.com/p/small-sticks
Justin, what do you think of the Victory Bond idea today floated by NDP, especially if lots of it went to housing?
Thanks, Justin. In <We got into this message because of endemic buck-passing> I guess you meant "mess"...
Definitely hoping Minister Nate Erskine-Smith reads this! Wish I could use the @ symbol as I know he’s here on Substack.
I have been advocating for more affordable housing for 20 years now. It has felt like pointlessly beating my head against the wall. Very little happened as the need grew and grew. The new Liberal plan gives me renewed hope. Thank you for your excellent article! I will resume bugging my local politicians.