Canada's 4th city

[J.OT13]

Originally Posted by niwell

I haven't been following closely but I gather that upzoning to allow multiplexes as-of-right is a pretty contentious issue in Calgary - though probably a no-brainer for forumers here. My stepdad actually called me the other night all flustered that their (now) wealthy neighbourhood is going to be RUINED by poor people and they have the right to maintain the area in stasis. He's actually contributing a non-insubstantial sum of money to some legal defense which I attempted to talk him out of. And tried to explain that the land economics of tearing down $1.5M houses for 3 units doesn't make a whole lot of sense unless they are ultra-luxury.

It was the very stereotypical NIMBY conversation that we see posted in jest sometimes. Interestingly he had the same reaction when the LRT was extended to their area years ago yet ended up using it for the last few years of his career and talked about how much more convenient it was compared to driving...

I have opinions that differ from others when it comes to upzoning older neighborhoods, so I won’t get into that, but the idea that upzoning will decrease property values is not one I subscribe to. What we’ve seen in Ottawa is that the new condos/apartments built are for sale/for rent at prices very near to the single-family homes they replace. The diminished supply of older sfh might actually increase their value due to scarcity.

[MolsonExport]

Originally Posted by urbandreamer

Whichever city attracts the most South Asian and African immigrants will be number four. I'm going to suggest Ottawa or Hamilton, but it could easily be Mississauga or Brampton.

Btw, it's clear Montreal will be #1 within 50 years. Not only from immigration, but a ton of young English Canadians are moving there.

That second point is
Didn't you also recently advocate for Quebec to separate?

[Nouvellecosse]

Originally Posted by J.OT13

I have opinions that differ from others when it comes to upzoning older neighborhoods, so I won’t get into that, but the idea that upzoning will decrease property values is not one I subscribe to. What we’ve seen in Ottawa is that the new condos/apartments built are for sale/for rent at prices very near to the single-family homes they replace. The diminished supply of older sfh might actually increase their value due to scarcity.

That's something a lot of people fail to recognize. Some seem to have this idea that if you upzone an area then immediately a row of bulldozers and wrecking balls appear to flatten everything and replace it with condos. But the fact that SFHs are already so expensive when most of them were on land that didn't allow anything denser shows that there are plenty of people willing to pay lots of money for them as they are. You would see some redeveloped, but not the majority. And when their numbers dropped a bit their value would rise to an equilibrium to the point where the only ones getting redeveloped would be those in poor shape.

[rbt]

Originally Posted by urbandreamer

Btw, it's clear Montreal will be #1 within 50 years.

I'm not sure Greater Montreal has enough cash for that. Construction in Montreal isn't significantly cheaper than Toronto or Vancouver, and a large increase in housing requirements will push up those costs to be on par with Toronto/Vancouver.

Building new housing significantly faster than the GTA will likely push costs beyond those in the GTA today. Over 50 years GMA would need to build at GTA rate + an additional ~30,000 units per year (1.3 people per unit). Interprovincial immigrants into Quebec tend to be young individuals, not large established families, so that's a lot of units and a lot of pressure on wages in that sector. IMO, if you take away the higher quality of life Montreal offers largely through cheaper housing, it becomes significantly less attractive.

Also worth noting, Quebec like Ontario usually has a negative inter-provincial migration value. Population grown is driven by foreign immigration, not domestic.

[Innsertnamehere]

Originally Posted by Nouvellecosse

That's something a lot of people fail to recognize. Some seem to have this idea that if you upzone an area then immediately a row of bulldozers and wrecking balls appear to flatten everything and replace it with condos. But the fact that SFHs are already so expensive when most of them were on land that didn't allow anything denser shows that there are plenty of people willing to pay lots of money for them as they are. You would see some redeveloped, but not the majority. And when their numbers dropped a bit their value would rise to an equilibrium to the point where the only ones getting redeveloped would be those in poor shape.

My house was recently rezoned from permitting 1 sfd as of right to 3 townhouses plus accessory dwellings each (6 units total).

I immediately ran a high-level proforma and worked out that the ADUs would make 0 sense financially (recouping very little in resale value vs. construction costs), and I would need to sell each townhouse for a million dollars to break even on costs over just selling my house as-is. Similar type units are currently selling in my area for around $900k - so it doesn't work.

The only way intensification works at more limited scales like that (i.e. 1 dwelling to 3 dwellings) is if the existing dwelling is significantly depreciated - i.e. some old, small dwelling which has had little in the way of improvements in many years. And that trend has been happening in my neighbourhood for a while, where small, dilapidated bungalows on oversized lots are demolished, severed, and replaced with 2-3 large detached dwellings selling for $1.5 million +.

It's for this reason I really don't think upzoning is going to deliver the mass-scale change many expect city-wide. Most areas are simply more valuable as relatively improved SFHs than they are as redevelopment sites for townhouses or triplexes.

Where you will see larger changes are where there is significant pent-up demand for larger units which allow them to command higher prices. Way out in the depths of suburban Hamilton this doesn't work - but I wouldn't be surprised if the more desirable areas of the city start to see more triplex and townhouse developments as denser housing forms can fetch higher premiums and can override higher land costs with existing dwellings having higher base values.

[Truenorth00]

Originally Posted by rbt

I'm not sure Greater Montreal has enough cash for that. Construction in Montreal isn't significantly cheaper than Toronto or Vancouver, and a large increase in housing requirements will push up those costs to be on par with Toronto/Vancouver.

Building new housing significantly faster than the GTA will likely push costs beyond those in the GTA today. Over 50 years GMA would need to build at GTA rate + an additional ~30,000 units per year (1.3 people per unit). Interprovincial immigrants into Quebec tend to be young individuals, not large established families, so that's a lot of units and a lot of pressure on wages in that sector. IMO, if you take away the higher quality of life Montreal offers largely through cheaper housing, it becomes significantly less attractive.

Also worth noting, Quebec like Ontario usually has a negative inter-provincial migration value. Population grown is driven by foreign immigration, not domestic.

Let's not attribute any seriousness to his post. It's not analysis. There's no evidence at all that "English Canadians" (note: he didn't say Anglo Canadians) are flooding into Montreal. It's driven by his racial obsession and animus (particularly against immigrants in the GTA). So he's insinuating white flight to Montreal. It's wish casting by a racist.

[Greetingsfromcanada]

Originally Posted by J.OT13

The Greenbelt doesen't really impact Ottawa's growth in anyway. Developers have had no issues leapfrogging it. By this point, there's almost an equilibram between the population inside and outside the Greenbelt =/- 100k people in favour of inside (despite the lower representation on Council).

Ottawa's also been pushing hard for density within the Greenbelt. Towers are going up just about everywhere, particularly near the current and future O-Train. Single family zoning is being eliminated throughout the City and could allow fourplexes anywhere.

That said, I'm not aware of how things are going in Calgary in terms of u/c projects or zoning reform, so I can't really compare.

Calgary produces much more housing in it's city limits alone than Ottawa, which has annexed the whole countryside around. This is the real Alberta Advantage and why Ottawa will be handily surpassed as the number 4 city despite being our capital

[kool maudit]

English Canadians moving to Montreal might as well be English Canadians moving to Berlin. Control is not in play.

[goodgrowth]

Originally Posted by Innsertnamehere

My house was recently rezoned from permitting 1 sfd as of right to 3 townhouses plus accessory dwellings each (6 units total).

I immediately ran a high-level proforma and worked out that the ADUs would make 0 sense financially (recouping very little in resale value vs. construction costs), and I would need to sell each townhouse for a million dollars to break even on costs over just selling my house as-is. Similar type units are currently selling in my area for around $900k - so it doesn't work.

The only way intensification works at more limited scales like that (i.e. 1 dwelling to 3 dwellings) is if the existing dwelling is significantly depreciated - i.e. some old, small dwelling which has had little in the way of improvements in many years. And that trend has been happening in my neighbourhood for a while, where small, dilapidated bungalows on oversized lots are demolished, severed, and replaced with 2-3 large detached dwellings selling for $1.5 million +.

It's for this reason I really don't think upzoning is going to deliver the mass-scale change many expect city-wide. Most areas are simply more valuable as relatively improved SFHs than they are as redevelopment sites for townhouses or triplexes.

Where you will see larger changes are where there is significant pent-up demand for larger units which allow them to command higher prices. Way out in the depths of suburban Hamilton this doesn't work - but I wouldn't be surprised if the more desirable areas of the city start to see more triplex and townhouse developments as denser housing forms can fetch higher premiums and can override higher land costs with existing dwellings having higher base values.

This is a case of upzoning significantly lagging the market land values.

What are we trying to achieve by legalizing triplexes AFTER an acre of urban land is like $5M+?

[Innsertnamehere]

Originally Posted by goodgrowth

This is a case of upzoning significantly lagging the market land values.

What are we trying to achieve by legalizing triplexes AFTER an acre of urban land is like $5M+?

the problem is that construction values are so high.

My house is worth about $900kish. Probably about $500k is the land, $400k is the "improvements" - i.e. the existing house.

The townhouse redevelopment works if you can get land costs down to $600k, or you increase resale value of the new units to cover the land costs.

If I was permitted to tear my place down and build two SFHs - at a cost of $1.3 million each or so, I would probably be profitable. but the zoning doesn't allow me to do that.

Alternately, if the improvements on my property were worth less - i.e. $200k - I may be able to make the townhouses pencil.

A combination of these two scenarios is already happening in my area.

The simple fact is that it costs so much to build a house today (I assumed $400/sf based on some basic research) that you need low land costs and high sale prices to pencil.

High land costs is a huge reason intensification is so expensive.

The other alternative would be to permit even more density. Right now my zoning permissions allow me to spread land costs across 3 units - i.e. $300k a unit.

If I could instead build a 5-unit townhouse complex, that gets split to $180k a unit. sale price would likely drop a bit, say, $850k, but that may actually pencil at that point. Especially if you were someone more sophisticated who could deliver lower construction costs than I can.

If we want affordable housing in this country again we need more affordable construction and more affordable land.

Zoning can fix one of those, to a certain extent, by providing large-scale upzoning and deregulation on a massive scale. This deregulation needs to be for more than intensification deregulation as well - that can only go so far as long as intensification by it's nature will always be battling higher land costs. We also need deregulation of greenfield development where land costs are a fraction of intensification and you can therefor deliver ground-related housing at a fraction of the cost. The only way to bring land costs down in development will be to massively increase the availability of development land. And you do that through zoning deregulation and servicing to make those areas permit-ready. The opening of greenfield development will actually help intensification pencil easier as well as demand for ground-relating housing can be absorbed in greenfield construction, lowering existing land values and allowing existing sfh properties to depreciate faster and let intensification pencil faster as well.

The other needs some more thought into how it can be done. Reducing taxes is an easy part - work to reduce development charges and perhaps eliminate sales taxes on new homes. Then you have to look at what else drives construction costs - how can we lower material costs? how can we lower man-hours spent per unit to reduce labour costs? Can we make changes to the building code to make buildings less expensive?

Then you compare that list of what we need to do to what is happening.. and I agree with @lio45. Housing values aren't going down. Some of the largest housing markets in the country like Toronto and Hamilton continue to just absolutely pile on additional costs to housing development at triple the rate they make concessions on things like zoning. Toronto's green standards require net-zero construction in a few years. They just jacked development charges by nearly 50%. Hamilton banned greenfield development beyond that which has already been permitted, removed development charge exemptions, introduced mandatory standards like 100% EV Parking spaces, and is looking to replicate Toronto's Green Standards.

[1overcosc]

Originally Posted by Innsertnamehere

the problem is that construction values are so high.

My house is worth about $900kish. Probably about $500k is the land, $400k is the "improvements" - i.e. the existing house.

The townhouse redevelopment works if you can get land costs down to $600k, or you increase resale value of the new units to cover the land costs.

If I was permitted to tear my place down and build two SFHs - at a cost of $1.3 million each or so, I would probably be profitable. but the zoning doesn't allow me to do that.

Alternately, if the improvements on my property were worth less - i.e. $200k - I may be able to make the townhouses pencil.

A combination of these two scenarios is already happening in my area.

The simple fact is that it costs so much to build a house today (I assumed $400/sf based on some basic research) that you need low land costs and high sale prices to pencil.

High land costs is a huge reason intensification is so expensive.

The other alternative would be to permit even more density. Right now my zoning permissions allow me to spread land costs across 3 units - i.e. $300k a unit.

If I could instead build a 5-unit townhouse complex, that gets split to $180k a unit. sale price would likely drop a bit, say, $850k, but that may actually pencil at that point. Especially if you were someone more sophisticated who could deliver lower construction costs than I can.

If we want affordable housing in this country again we need more affordable construction and more affordable land.

Zoning can fix one of those, to a certian extent, by providing large-scale upzoning and deregulation on a massive scale. The other needs some more thought into how it can be done. Reducing taxes is an easy part - work to reduce development charges and perhaps eliminate sales taxes on new homes.

This point to another part of the housing puzzle - we need to reduce construction costs. Lower (or even scrap) DC charges and relax the building codes.

[Innsertnamehere]

A super-quick fix would be to axe sales taxes on new homes - would cut construction costs immediately by 5-15% across the country, assuming the provinces scrap the provincial portion as well, and would not impact the current municipal method of funding infrastructure for development through DCs.

If we were serious we would:

1. Drop sales taxes on new construction;

2. Provide significant funding pots directly to municipalities to allow them to reduce DCs on the condition of value-for-money audits of their DC funds (seriously, municipalities are building palaces of municipal structures on the backs of new home buyers - Hamilton is building a bus barn with an insanely expensive bridged office component and structured parking, funded by new homebuyers);

3. Immediately upzone all major cities to permit basically any residential built form you would like of up to 4 storeys in basically all residential areas;

4. Immediately remove restrictions on greenfield development and instead simplify the process to ensure that development respects the orderly expansion of the existing urban area and at reasonable densities to prevent land from being consumed unnecessarily fast;

5. Provide a significant review of the building code to identify cost savings in construction methods;

6. Introduce a fund to drive construction innovation to reduce labour costs;

7. Provide funding to expand construction trades to encourage additional supply of labour to keep labour costs down; and

8. Deregulate land use regulations for high density development along existing rapid transit corridors by permitting something like 30-storeys as-of-right as a minimum, regardless of local context, within 500 metres of a rapid transit station; and

9. Reduce input costs such as excessive natural feature buffers, oversized parkland dedications, inclusionary zoning requirements, "community benefit charges", etc. which all add costs.


We can talk about prioritizing these, but every single one drives housing costs. Each one we implement, or at least stop from growing in cost, will benefit housing prices.

[ssiguy]

Calgary recently had a very contentious vote which upzoned the entire city............I disagree with this kind of policy.

There is no such thing as "one size fits" in urban planning. What's good for one area doesn't make it good for everywhere else. I would hate to see our historic downtown SFH neighbourhoods levelled so a developer can make some mega-bucks or to accommodate people fresh off the boat.

London up-zoned recently but I think it did it in a more thoughtful way. It up-zoned all areas roughly 4 blocks of a regular transit service which obviously covers all major and semi-major roadways. It doesn't ruin some of the more established areas outside the downtown but still encourages transit oriented development. All newer areas without regular transit service were up-zoned by 40% city wide. It seems like a more realistic policy than Calgary's and was vastly less contentious and hence didn't receive near the blowback that Calgary experienced.

In order to create viable cities, they must offer housing options of all kinds and not just the ones planners and politicians dictate. Higher density developments will be more embraced by the local community if they feel their voices and concerns were taken into account. Such a process also makes the newcomers to the neighbourhood feel more welcome and become more activate participants in the community as opposed to knowing that everyone in the area wishes they would leave and blame them on how their have ruined their sense of community.

[harls]

Originally Posted by Greetingsfromcanada

Calgary produces much more housing in it's city limits alone than Ottawa, which has annexed the whole countryside around. This is the real Alberta Advantage and why Ottawa will be handily surpassed as the number 4 city despite being our capital

I've missed Chad.

[CanSpice]

Originally Posted by ssiguy

Calgary recently had a very contentious vote which upzoned the entire city............I disagree with this kind of policy.

There is no such thing as "one size fits" in urban planning. What's good for one area doesn't make it good for everywhere else. I would hate to see our historic downtown SFH neighbourhoods levelled so a developer can make some mega-bucks or to accommodate people fresh off the boat.

London up-zoned recently but I think it did it in a more thoughtful way. It up-zoned all areas roughly 4 blocks of a regular transit service which obviously covers all major and semi-major roadways. It doesn't ruin some of the more established areas outside the downtown but still encourages transit oriented development. All newer areas without regular transit service were up-zoned by 40% city wide. It seems like a more realistic policy than Calgary's and was vastly less contentious and hence didn't receive near the blowback that Calgary experienced.

In order to create viable cities, they must offer housing options of all kinds and not just the ones planners and politicians dictate. Higher density developments will be more embraced by the local community if they feel their voices and concerns were taken into account. Such a process also makes the newcomers to the neighbourhood feel more welcome and become more activate participants in the community as opposed to knowing that everyone in the area wishes they would leave and blame them on how their have ruined their sense of community.

The challenge is that restrictive zoning such as your historic downtown SFH neighbourhoods remove the housing options, they don't give people the freedom to do what they want with their properties. If the local community wants townhouses or six-storey buildings they're forbidden from doing that because the planners and politicians have dictated that only single family homes can go there. I would have thought that Albertans would have been about personal freedoms instead of wanting the government to tell them what they can and cannot build on their property, but here we are.

It's also a little telling that you think that the only people who would move into an upzoned neighbourhood would be "people fresh off the boat" and not, say, people who have been born and raised in Calgary and have gone to UC but want to move out of their parents' house.

[MolsonExport]

Originally Posted by harls

I've missed Chad.

Can Do, Woot Woot!!

[Nouvellecosse]

Originally Posted by CanSpice

The challenge is that restrictive zoning such as your historic downtown SFH neighbourhoods remove the housing options, they don't give people the freedom to do what they want with their properties. If the local community wants townhouses or six-storey buildings they're forbidden from doing that because the planners and politicians have dictated that only single family homes can go there. I would have thought that Albertans would have been about personal freedoms instead of wanting the government to tell them what they can and cannot build on their property, but here we are.

It's also a little telling that you think that the only people who would move into an upzoned neighbourhood would be "people fresh off the boat" and not, say, people who have been born and raised in Calgary and have gone to UC but want to move out of their parents' house.

It usually isn't so much about the government telling people what they can and can't build on their properties; it's the current residents telling future residents what type of home they can or can't live in and enforcing it using government power. The problem isn't the local community not being allowed to do what it wants, it's the local community making decisions that screw over would-be future community members using government power with governments that are often too gutless to say no. I remember once doing a whole research paper on the topic and learning how the whole "neighbourhood character" sham was historically used to enforce racist and classist segregation using language that was coded and sounded innocuous enough for most people not to notice. It was pretty blatant when you go back further, but nowadays most are tactful enough not to show open disdain for prospective residents so that they look reasonable and worthy of sympathy. But of course there's always the odd time when the veil slips and they show their true feelings with terms like "fresh off the boat"

What makes this such a difficult issue is that the contemporary planning community is terrified of standing up to "local communities" because of the history of vulnerable and marginalized communities being harmed by the field of planning. The era of urban renewal, slum clearance and (mostly in the US) highway construction that destroyed numerous neighbourhoods and displaced countless people from roughly the 50s - 80s were a huge injustice. So now, planners are careful not to repeat those mistakes by ensuring that there's always lots of community consultation and buy in with any change.

But those prior injustices occurred through the use of eminent domain and other tools used to force people out of their communities and to do things that actually did threaten or destroy them like building a massive highway through the middle. That has little to no relevance in individual land-owners deciding what type of residential property to build on their land. But this very well-meaning precaution meant to empower vulnerable, marginalized people and protect them from big government has been co-opted by the powerful and affluent to over-turn the greater societal good and exclude the less powerful. And because future residents don't live in a particular community until (unless) a development is built, they don't get a say despite the decision having a huge effect on their lives.

[sgera]

Originally Posted by Greetingsfromcanada

Calgary produces much more housing in it's city limits alone than Ottawa, which has annexed the whole countryside around. This is the real Alberta Advantage and why Ottawa will be handily surpassed as the number 4 city despite being our capital

You forgot to include Gatineau in your stats - CMA = Ottawa + Gatineau

[WhipperSnapper]

A place like Toronto is inventing new taxes to keep property tax increases in the single digits. There's no cushion to slash development charges. Similar situation with sales tax at higher levels

Intensification and higher densities require higher investment. If the choice is for Canada to continue to save and educate the world than we need to cut down forests and drain swamps allowing new masterplanned cities to be built.

We need stop funneling cash into housing built at $500 a square foot and invest it in increasing manufacturing output to lower costs. We also need to address the driving forces that have commoditizes housing pushing values up far above inflation. Upzoning as a solution for affordability is nonsense. Allowable densities factor into the properties value across Canada. In the least affordable places, it offsets any profit margins for small scale developers.

Toronto neighbourhoods needs change as young couples evolve to married with children to seniors in their twilight and death . The cycle repeats. The neighbourhoods were design around a certain population. The necessary housing to support the massive growth will throw that design out of whack and ultimately lower standard of living and quality of life.

The neighbourhoods were not designed for work from home either. The traffic is insanity the last time I was in my old Toronto nabe. The powerful pro bike anti-car lobby that doesn't delineate transit buses didn't help either but i digress. Torontonians were never the warmest folk but, they are downright mean now.

[rdaner]

The stats highlight a really interesting trend: the complete flip of housing type dominance from sfh to multi-unit over the last 10 years to the point that there are 5 times the number of multi-units vs. Singles! This will begin to fundamentally change Canadian cities for the better.