Housing

In principle, there is no reason why population growth must push up the cost of shelter. Immigrants need homes — but they are also disproportionately likely to work in construction and, thus, increase the economy’s home-building capacity.

The problem arises when governments effectively prohibit the supply of housing from rising in line with demand. Between 2012 and 2022, Americans formed 15.6 million new households but built only 11.9 million new housing units. As a result, even before the post-lockdown surge in migration, there were more aspiring households than homes in America’s thriving metro areas.

This was largely a consequence of zoning restrictions. Municipal governments have collectively made it illegal to erect an apartment building on about 75 percent of our country’s residential land. In large swaths of the country, there are households eager to rent or buy a modest apartment, and developers eager to provide them, but zoning restrictions have blocked such transactions from taking place.

This creates a housing shortage. You can house 32 families much more quickly and cheaply by building a single apartment building than by erecting 32 separate houses. To require all of your community’s housing units to be single-family homes isn’t all that different from prohibiting the manufacture of all non-luxury cars. In both cases, you end up with artificial scarcity and unaffordability.

In short: Housing advocates fear the social housing sector is buckling under strain as more and more people are priced out of the private rental market.
The body representing tenants in housing disputes says its workload has almost doubled year-on-year.
What's next: The state government says it's tackling need with record investment in the sector.

To ramp up supply, cities are taking a fresh look at their zoning rules that spell out what can be built where and what can't. And many are finding that their old rules are too rigid, making it too hard and too expensive to build many new homes.

So these cities, as well as some states, are undertaking a process called zoning reform. They're crafting new rules that do things like allow multifamily homes in more neighborhoods, encourage more density near transit and streamline permitting processes for those trying to build.

One city has been at the forefront of these conversations: Minneapolis.

That's because Minneapolis was ahead of the pack as it made a series of changes to its zoning rules in recent years: allowing more density downtown and along transit corridors, getting rid of parking requirements, permitting construction of accessory dwelling units (ADUs), which are secondary dwellings on the same lot.

And one change in particular made national news: The city ended single-family zoning, allowing two- and three-unit homes to be built in every neighborhood.

Researchers at The Pew Charitable Trusts examined the effects of the changes between 2017 and 2022, as many of the city's most significant zoning reforms came into effect.

They found what they call a "blueprint for housing affordability."

By offering private companies more favorable financing terms, Montgomery County hoped to move forward with new construction that they’d own for as long as they liked. They had plans to build thousands of publicly owned mixed-income apartments by leveraging relatively small amounts of public money to create a revolving fund that could finance short-term construction costs. Eighteen months ago, this “revolving fund” plan was still mostly just on paper; no one lived in any of these units, and whether people would even want to live in publicly owned housing was still an open question.

[…] 

Since 2017, Boston has been working to redevelop some of its existing public housing projects by converting them into denser, mixed-income housing. Kenzie Bok, who was tapped by the city’s progressive mayor last spring to lead the Boston Housing Authority, said that existing work helped pave the way for leaders to more quickly embrace the Montgomery County model.

[…] 

“The default assumption is that affordable units are hard to build and market-rate ones will build themselves from a profit-motive perspective,” Bok said. “In fact, we have a situation now where ironically it’s often affordable LIHTC units that can get built right now and other projects stall out.”

Bok and her colleagues realized it’s not that mixed-income projects don’t generate profits — those profits just aren’t 20 percent or higher. Mixed-income affordable housing wouldn’t need to be produced at a loss, Boston leaders concluded, they just might not be tantalizing to certain aggressive real estate investors. By creating a revolving fund and leveraging public land to offer more affordable financing terms, Boston officials realized they could help generate more housing — both affordable and market-rate.

A report soon to be released by architects at Melbourne University spells out the environmental damage of demolishing the towers — including the thousands of tonnes of concrete sent into landfill and carbon released in producing replacement concrete — and details the benefits of retrofit as a tried and tested alternative. Work from the architectural practice OFFICE on estates in Ascot Vale and Port Melbourne demonstrates that refurbishment and infill can take place without relocating existing residents, at significantly lower social, environmental and economic costs.

The big housing demolition is not only costing the state a great deal; in the short term it massively reduces the affordable housing stock. In the middle of a housing crisis, this is bizarre. Contrary to Keane’s argument that our object is to keep public housing tenants in substandard housing, it is to ensure they remain close to home while more public housing is built. Those towers that can be refitted can be done so with minimal disruption to tenants, who move within the blocks while the work is done. Most public housing estates have expansive grounds. New public housing should be under construction on those estates now, so that when it comes time to demolish the unsalvageable towers, tenants can move into new housing next door. In what way is this a difficult idea?

As set out in JRF's recent report Making a house a home, the shifting balance of tenure has played a key role in myriad housing problems, from unaffordability and poor conditions to insecurity, and a plan for building a more equitable housing market must reckon with who owns our housing stock (Baxter et al, 2022).

This should take the form of efforts to shift tenure over time, and doing that directly through socialisation could play an important role. However, there are criticisms of this approach, and there needs to be a consideration of how acquisition may be best used within the housing system.

This briefing explores these criticisms, how they may be best overcome, and proposes the best way of deploying socialisation, arguing for a focus on:

• reducing the cost of providing temporary accommodation (TA), while supporting efforts to drive up standards in the sector
• growing a community rented sector in lower-cost housing markets that are otherwise plagued by poor conditions, poor management, and where rental payments are not benefiting local communities
• a wider plan to reform the Right to Buy scheme to arrest the decline of social housing and to keep subsidies in the system.

In some cities, parking takes up most of the space in the city’s downtown core. In Regina, for example, nearly half of private land in the city’s downtown core is parking lots.

In the city of Toronto, a bylaw dictates that a parking spot should be 5.6 metres in length, 2.6 metres in width and have a vertical clearance of two metres. This comes to around 156 square feet for a single vehicle, while according to Canadian Real Estate Magazine, the size of the average Toronto condo is just under 650 square feet – around the same as the four parking spots Richardson cited.

“It encourages sprawl,” Richardson said. “It’s not being turned into housing and it helps lead to our housing shortage.”

[…] 

Rebecca Clements, a researcher at the University of Sydney in Sydney, Australia, told Global News that Minimum Parking Regulations (MPRs) have had a devastating impact on housing affordability in many industrialized nations including Canada and the United States.

“This forces developers to include parking everywhere, greatly contributing to building costs,” she said. “MPRs also reduce the diversity of housing and non-residential land uses, by effectively prohibiting zero-parking buildings which might otherwise be excellent designs.”

"Housing affordability is a significant problem in Canada but not one that can be fixed by raising or lowering interest rates," Macklem said during a speech in Montreal on Tuesday.

Macklem said the real issue is that housing supply has fallen short of housing demand for years.

"There are many reasons why: zoning restrictions, delays and uncertainties in the approval processes and shortages of skilled workers. None of these are things monetary policy can address," he said in his address to the Montreal Council on Foreign Relations.

Macklem admits the emergency low interest rates during the COVID-19 pandemic helped fuel the run-up in home prices during that time. And the central bank's own research shows that "shelter inflation" continues to drive inflation.

During the presser, Nancy Marshall of Marketplace asked Powell, “How closely are you watching rent and housing prices as you elevate whether and when to cut rates? It seems like housing prices are not coming down as quickly as you expected.”

Standing at the podium, Powell responded [to hear for yourself, go to the 42-minute mark], saying that the Fed isn’t directly “targeting” home prices, and insinuated that the real culprit for elevated home prices is that “there hasn’t been enough housing built.”

Predictably, not everyone has been happy about it. Critics have included local planners, politicians and, especially, residents of Kitsilano Point, a rarified beachfront neighbourhood bordering the reserve. And there’s been an extra edge to their critiques that’s gone beyond standard-issue NIMBYism about too-tall buildings and preserving neighbourhood character. There’s also been a persistent sense of disbelief that Indigenous people could be responsible for this futuristic version of urban living. In 2022, Gordon Price, a prominent Vancouver urban planner and a former city councillor, told Gitxsan reporter Angela Sterritt, “When you’re building 30, 40-storey high rises out of concrete, there’s a big gap between that and an Indigenous way of building.” 

The subtext is as unmissable as a skyscraper: Indigenous culture and urban life—let alone urban development—don’t mix. That response isn’t confined to Sen̓áḵw, either. On Vancouver’s west side, the Musqueam, Squamish and Tsleil-Waututh Nations—through a joint partnership called MST Development Corp.—are planning a 12-tower development called the Heather Lands. In 2022, city councillor Colleen Hardwick said of that project, “How do you reconcile Indigenous ways of being with 18-storey high-rises?” (Hardwick, it goes without saying, is not Indigenous.) MST is also planning an even bigger development, called Iy̓álmexw in the Squamish language and ʔəy̓alməxʷ in Halkomelem. Better known as Jericho Lands, it will include 13,000 new homes on a 90-acre site. At a city council meeting this January, a stream of non-Indigenous residents turned up to oppose it. One woman speculated that the late Tsleil-Waututh Chief Dan George would be outraged at the “monstrous development on sacred land.”

To Indigenous people themselves, though, these developments mark a decisive moment in the evolution of our sovereignty in this country. The fact is, Canadians aren’t used to seeing Indigenous people occupy places that are socially, economically or geographically valuable, like Sen̓áḵw. After decades of marginalization, our absence seems natural, our presence somehow unnatural. Something like Sen̓áḵw is remarkable not just in terms of its scale and economic value (expected to generate billions in revenue for the Squamish Nation). It’s remarkable because it’s a restoration of our authority and presence in the heart of a Canadian city.