Housing Bubble II: The Quest To Build Enough Homes Where People Actually Need Them

[goodgrowth]

Again, the greenbelt takes a massive amount of land capacity off the market in the region. This makes the marginal piece of available land more pricey than otherwise would be.

This issue also applies to upzoning which is typically done in a piecemeal fashion in cities.

Land use liberalization needs to be broad not incremental if you want noticeable systemic effects on prices.

[Build.It]

Something I haven't seen discussed are the towns and cities caught in the middle of the Greenbelt. (Many of these used to be independent towns/cities but were amalgamated into larger upper-tier municipalities in the 90s/2000s.) Some examples of these include Orangeville, King City, Waterdown, Acton and Keswick. These are serviced urban areas, in close proximity to other built up areas of the GTA with extreme limitations on greenfield development.

I was curious to see the result the Greenbelt has had on these communities so started to do some research. I spent a couple hours digging through King City and Orangeville's official plans and compared that to the greenbelt map. If I have time I'd like to go through some other examples as well, but for now I looked at these two.

King City is mostly in the Oak Ridges Moraine Conservation Area. I see in their official plan they do have some designated greenfield for development, but this is almost all used up now. An established area of Richmond Hill is 2km to the east of King City's urban boundary, and under normal circumstances one would expect development to continue in that direction, as it's close to employment opportunities and existing service corridors. But under the Greenbelt framework this isn't possible.

Additionally, King City still needs to comply with the Places to Grow Act, and need to meet intensification targets. Prior to PTG King City was an exurban community with large lots and large green lawns. Seeing as King City is on the Oak Ridges Morraine, this was the ideal type of development for the area. With the houses being on large lots with lots of space between buildings, it allowed for most rainwater to still be absorbed back into the sand silt beneath them.

However Places-to-Grow requires King City to intensify, meaning that the new developments will actually have more pavement as a % of land, and less exposed soil to absorb rainfall into the morraine underneath. From an ecological perspective, an argument could be made that the best use of land for housing was the exurban style developments which was already happening in that region prior to Greenbelt legislation, and that high density development in King City will actually cause more damage to moraine.

Meanwhile 1km to the West of King City's development boundaries is Highway 400. Another 1km further west is the hamlet of Laskay. Under normal circumstances this area would also be a no-brainer for development since, again it is close to existing infrastructure that could be easily expanded, and close to employment. However this whole area falls under the Greenbelt and can't be developed. Not only that, but it's considered "protected country side" on this side, so not even part of the moraine ecosystem.


https://www.greenbelt.ca/maps
https://www.king.ca/sites/default/fi...0Annotated.pdf

The second example I looked at is Orangeville, which is also fully in the greenbelt. Orangeville's urban boundaries are entirely within the greenbelt - albeit close to the border. They do have some designated greenfield left, but not very much, as you can see below. Additionally, the greenfield land around Orangeville consists entirely "protected farmland", rather than a moraine like in the King City example.

Orangeville is also close to the northern extents of already-developed Peel region, so has become a popular place to live for people working in Brampton/Mississauga. Given this demographic demand, under normal circumstance one would expect development of Orangeville to trend southeast - towards Caledon. However under the greenbelt, this can't be done. And seeing as how Orangeville is almost entirely out of designated greenfield land, the next place that will be able to develop doesn't start for about 2km to the north once you're out of the Greenbelt boundary.

[MolsonExport]

Originally Posted by Build.It

I was curious what a piori meant so decided to look it up - "relating to or denoting reasoning or knowledge which proceeds from theoretical deduction rather than from observation or experience."

I am a construction professional in the GTA who deals with NIMBYs, cities and consultants every day. You are a biology professor in London. Yet according to you I'm the one who is being theoretical.

I'm a professor, but not in the field of biology. I would think that being a construction professional would obviously make you in favour of developing the greenbelt. That is fine, and you are entitled to your a priori conviction.

Believe it or not, I am not 100% opposed to developing (small parts) of the greenbelt, where it makes sense and with appropriate land swaps. But to hand the whole thing over to developers? Nope, I can't get behind that.

Did you glean that I was a prof from my posting style, in your short history as an SSP member? Or...from your previous experience here? There is something very familiar about your posting style.

[Changing City]

Originally Posted by MolsonExport

I'm a professor, but not in the field of biology. I would think that being a construction professional would obviously make you in favour of developing the greenbelt. That is fine, and you are entitled to your a priori conviction.

I'm not sure that you should think that. Obviously a subset of the development industry want to open up green belts, the ALR in BC, and protected areas of land. Clearly Build.It is a part of that group. However, plenty of others in the development industry acknowledge the reasons for those designations, and the environmental benefits that come from discouraging sprawl and encouraging densification, infill and brownfield development, particularly in locations close to transit.

[Build.It]

Originally Posted by Build.It

From an ecological perspective, an argument could be made that the best use of land for housing was the exurban style developments which was already happening in that region prior to Greenbelt legislation, and that high density development in King City will actually cause more damage to moraine.

An additional thought on this excerpt from my previous post - US metro areas often get criticized by Canadian urbanists for exurban areas that look like the snapshot below (taken from metro Chicago).

Simply preventing these types of low density developments from being built doesn't reduce the demand for them though - it just moves that demand to the next best available thing, which is going to be a detached house on a smaller lot.

Generally speaking the exurban homes are some of the most expensive houses you can buy, and the only people demanding them are those with the means to do so. However, by preventing these from being built that purchaser simply buys the next best thing which is typically going to be a detached house on a smaller lot (which typically come with a lower price tag).

Now you have a situation where more middle class people have to compete with wealthier people for the same house, pushing up the price for the detached-on-small-lot. This causes a downward spiral where the detached buyer gets outbid and has to move down to semis/townhouses, and outbids other people for whom townhomes/semis were the only option.

From an ecological perspective exurban homes also blend in quite nicely with the existing environment. With the house being on quite a large lot, most of the land is either used for grass or woods, and therefore can support lots of species that regular suburbs can't. Eg. You often hear of deer in US exurbs, but don't in more denser suburbs.

And as I mentioned in the previous post as well, the exurban neighbourhood is going to absorb most rain fall into aquifers underneath the ground, since most of the land is exposed soil/grass/woods. Higher density suburban developments are almost entirely paved over, so the ground underneath doesn't get any water at all.

[Build.It]

Originally Posted by MolsonExport

Believe it or not, I am not 100% opposed to developing (small parts) of the greenbelt, where it makes sense and with appropriate land swaps. But to hand the whole thing over to developers? Nope, I can't get behind that.

Okay, I'm glad that you are at least a little flexible here.

Just connecting the dots here, but you said you're a professor in London with a wife, 2 kids and a backyard. Your profile says you've been a member since 2003, so you must be at least 45 years old, possibly 50.

I'm assuming this means you probably own a detached house close to the university, and you got into the market at least 10 years ago, if not more. And your detached house in London has at least doubled in value over the last 8 years, probably more.

And as an intelligent individual, you likely realize that the reason your house has gone up in value by that much isn't because London's economy is magically booming all of a sudden, but rather because the GTA's house prices have forced thousands of GTA millennials to live in London instead.

If all of the above is true, then that means you have personally benefitted from the GTA's restrictive land use policies that you are advocating for. You want to restrict the construction of detached houses for others, and want more highrise condos to be built in the suburbs. All while you personally get to enjoy living in a detached house with a backyard and all the extra space/privacy that comes with it.

I'm not trying to paint a false picture of your morality (I'm sure you're a swell guy), or to piss you off (although it might). But I am bringing this up so you're aware how hypocritical you sound to people my generation (sub 35). You personally became wealthier than you should've because of the GTA housing bubble (even though you don't live in the GTA), and you are advocating that one of the (likely) major drivers of the bubble continue almost entirely unchanged. You probably mean well (it's good to care about the environment), but it's also really important for people my generation and younger that people like yourself understand how your opinion (and therefore the land use policies you vote for) affects those younger than you who would also like to get in the market and have a similar standard of living as I'm assuming tou get to enjoy.

If it sounds like I'm picking on you, that's not my intent. Believe it or not I've had this exact same conversation with my own relatives, including my parents.

I spend quite a bit of my spare time researching this stuff, and I also work in the construction industry. We all have our biases and it's true that I would like to have more living space, and yes more development means more business for me. However I also know what I'm talking about when it comes to a lot of this stuff, and part of my reason for joining this forum is to pass along my experience and research to others who may have more of a say in future land-use policies.

[Drybrain]

Originally Posted by Build.It

From an ecological perspective exurban homes also blend in quite nicely with the existing environment. With the house being on quite a large lot, most of the land is either used for grass or woods, and therefore can support lots of species that regular suburbs can't. Eg. You often hear of deer in US exurbs, but don't in more denser suburbs.

Honestly, all those deer in leafy exurban areas are a sign of a marginal or diminished ecosystem. Deer populations get way too big as the predator population vanishes, and unlike many wild species, they can survive by foraging in human garbage and gardens.

Those leafy exurban are far less ecologically diverse than they may look, and private properties and roads sever animals’ travel routes, collapsing ecosystems. They may look close to nature, but they’re really not.

[lio45]

Originally Posted by Build.It

If all of the above is true, then that means you have personally benefitted from the GTA's restrictive land use policies that you are advocating for. You want to restrict the construction of detached houses for others, and want more highrise condos to be built in the suburbs. All while you personally get to enjoy living in a detached house with a backyard and all the extra space/privacy that comes with it.

I'm not trying to paint a false picture of your morality (I'm sure you're a swell guy), or to piss you off (although it might). But I am bringing this up so you're aware how hypocritical you sound to people my generation (sub 35). You personally became wealthier than you should've because of the GTA housing bubble (even though you don't live in the GTA), and you are advocating that one of the (likely) major drivers of the bubble continue almost entirely unchanged. You probably mean well (it's good to care about the environment), but it's also really important for people my generation and younger that people like yourself understand how your opinion (and therefore the land use policies you vote for) affects those younger than you who would also like to get in the market and have a similar standard of living as I'm assuming tou get to enjoy.

If it sounds like I'm picking on you, that's not my intent. Believe it or not I've had this exact same conversation with my own relatives, including my parents.

I spend quite a bit of my spare time researching this stuff, and I also work in the construction industry. We all have our biases and it's true that I would like to have more living space, and yes more development means more business for me. However I also know what I'm talking about when it comes to a lot of this stuff, and part of my reason for joining this forum is to pass along my experience and research to others who may have more of a say in future land-use policies.

The people who own only one SFH and don't intend to relocate anytime soon are often among those who complain that the sum total of the pros and cons of the Ponzi Scheme Of Great Enrichment actually aren't that great for them. Sure, on paper their house is worth 2x-3x what it used to not that long ago, but since all other real estate has gone up as well, it's pointless, as they'll always need at least one place to live.

If your house triples in value relative to all other real estate around it (because a rich deposit of diamonds has been found exactly under it and nowhere else, for example), then that's great for you.

If your house stagnates in value relative to all other real estate because everything has tripled in value, then your position hasn't really improved that much.

If all real estate triples in value after you had the foresight to buy a few more buildings in addition to the one SFH you live in, then that's great for you, your investments (all that extra real estate that you don't need as your personal dwelling) performed decently well. They can be sold and converted into other investments whenever you want and you'll still have a roof over your head.

Many "house rich" Gen Xers are in the middle paragraph situation.

[MolsonExport]

Originally Posted by Build.It

Okay, I'm glad that you are at least a little flexible here.

Just connecting the dots here, but you said you're a professor in London with a wife, 2 kids and a backyard. Your profile says you've been a member since 2003, so you must be at least 45 years old, possibly 50.

I'm assuming this means you probably own a detached house close to the university, and you got into the market at least 10 years ago, if not more. And your detached house in London has at least doubled in value over the last 8 years, probably more.

And as an intelligent individual, you likely realize that the reason your house has gone up in value by that much isn't because London's economy is magically booming all of a sudden, but rather because the GTA's house prices have forced thousands of GTA millennials to live in London instead.

If all of the above is true, then that means you have personally benefitted from the GTA's restrictive land use policies that you are advocating for. You want to restrict the construction of detached houses for others, and want more highrise condos to be built in the suburbs. All while you personally get to enjoy living in a detached house with a backyard and all the extra space/privacy that comes with it.

I'm not trying to paint a false picture of your morality (I'm sure you're a swell guy), or to piss you off (although it might). But I am bringing this up so you're aware how hypocritical you sound to people my generation (sub 35). You personally became wealthier than you should've because of the GTA housing bubble (even though you don't live in the GTA), and you are advocating that one of the (likely) major drivers of the bubble continue almost entirely unchanged. You probably mean well (it's good to care about the environment), but it's also really important for people my generation and younger that people like yourself understand how your opinion (and therefore the land use policies you vote for) affects those younger than you who would also like to get in the market and have a similar standard of living as I'm assuming tou get to enjoy.

If it sounds like I'm picking on you, that's not my intent. Believe it or not I've had this exact same conversation with my own relatives, including my parents.

I spend quite a bit of my spare time researching this stuff, and I also work in the construction industry. We all have our biases and it's true that I would like to have more living space, and yes more development means more business for me. However I also know what I'm talking about when it comes to a lot of this stuff, and part of my reason for joining this forum is to pass along my experience and research to others who may have more of a say in future land-use policies.

Fair enough. I know a lot about affordability, having spent a couple years (early 90s) living in a trailor (yes) and then many years in a substandard apartment (mid-late nineties), because I could not get into the Vancouver condo market.

However, as pointed out by Lio, one only "benefits" when one sells, and if the place that one is moving to is also of a similarly high(er) price, then one has not really "benefited" at all from escalating housing prices, no matter what the explanation is for this rise. The relative price difference between London and Toronto has narrowed only slightly over the past decade or so...London prices have certainly skyrocketed, but so too have Toronto's, and the average wages/salaries of those living in London is much less than the corresponding averages for Toronto.

Maybe when I die, and the kids inherit, somebody will "benefit" from the fixed asset price rise.

[lio45]

Originally Posted by MolsonExport

Maybe when I die, and the kids inherit, somebody will "benefit" from the fixed asset price rise.

That’s also been discussed ad nauseam here (latin locution on purpose for Build.It ) and the consensus here seems to be that

1) a normal real estate market like in the good ol’ days, in which every single one of MolsonExport’s kids will easily be able to acquire a nice place to live and raise MolsonEx’s grandkids there, because they’re well educated and will all get good jobs and so they will of course be able to afford nice real estate,

is preferable to

2) real estate is super pricy and MolsonEx’s children collectively inherit the ONE family dwelling acquired by the Gen X generation (i.e. MolsonEx himself) back when people could enter the real estate market without having floated up with it, and they’re limited to owning that one piece of housing, which admittedly is worth a lot of money and is free and clear by now, because they have no hope of ever being able to buy anything else.

It works great when you have no kid (sell your SFH for millions and spend that to live comfortably in retirement);

It works okay when you have one kid (give him your SFH and he’ll be doing as well as his parents housing-wise);

It works poorly when you have two kids (roommates with their significant others in their inherited SFH, or at least one is going to be renting forever);

It works even more poorly the more kids you have…

[lio45]

I have friends who live in Switzerland. Apparently pretty much everyone rents over there, as real estate is just unattainable for regular people. My friends are all highly-paid professionals but that’s not enough to meet the “owner class” threshold there. So they rent. And will rent until they either die of old age or move to another country.

Despite that, the sun keeps rising up in the morning in Switzerland…

[urbandreamer]

Build.it has made a mistake typical of this generation of builders: ignorance of Canada's history and particularly its natural history.

As a teenager, I used to design fantasy city plans around towns I knew about, or rather thought I knew about. Eg. Stratford, Owen Sound, and yep, Orangeville!

For years I thought my ideas were the best!

Then during the last 10 years I actually explored these cities, street by street, concession by concession, walked the downtowns, the green spaces and rail trails. Met the farmers, walked into churches.

Holy $%!+ I realized I was a damn fool.

Should we build on the green belt?

Yes, but only if we build it like they did before the 1890s: we will not remove the topsoil, bulldoze nature. Essentially we recreate colonial era buildings using similar construction techniques that result in charming natural low density neighborhoods. Planners, builders, bureaucrats of today can not be trusted! Thus until society has advanced beyond "paint it grey because it's cheap" aesthetic stop building!

Canadian builders are ruining Canada's unique natural environment, causing irreplaceable effects. They're treating the land like an open pit mine, or clear cutting forestry. A better approach would be redevelopment of entire postwar neighborhoods excluding the trees and road infrastructure. Much of Mississauga and Brampton could be rebuilt with stacked townhouses along the crescents and cul de sacs, resulting in at minimum tripled population but with potential for 10X. All with local/Canadian sourced wood and brick construction, possibly reusing the old brick.

Imagine this neighborhood between Dundas and Burnhamthorpe east of the Credit River in Mississauga rebuilt with either dense row houses or stacked townhouses or even two or three storey walk up apartments, filling in the wasted space between these bungalows while keeping the attractive landscaping and over built road infrastructure in place:
https://imgur.com/a/7P7UYzN

Relatively affordable land to assemble, and ideally individual homeowners could rebuild using a city provided template design.

The population could easily quadruple with little impact on road congestion if concurrently, Dundas and Burnhamthorpe were intensified, replacing strip plazas with six storey flats above commercial, LRT running from Toronto to UTM along Dundas and Burnhamthorpe, more frequent bus service throughout the densified crescents etc. Start with the area between the Credit River and Etobicoke Creek, Dundas & Burnhamthorpe Road: 60 years from now the population could be 1 million, a proper city within a city filled with vibrant pedestrian/commercial streets, mature shady streets, beautiful greenspace etc .. or we could destroy thousands of acres of precious green belt.

[jonny24]

Originally Posted by bolognium

I'm curious what the demand for greenfield SFHs would look like if people actually had to pay the true costs of it. Would people still jump at suburban living if property taxes were calculated based on lot size, frontage, how far out and costly it is to service, etc? Or if private automobile ownership wasn't heavily subsidized?

People might want that type of housing right now, but what if it wasn't deeply subsidized by denser areas? If property taxes actually took into account the cost to service these lands and maintain those services (without growth paying for growth Ponzi schemes), would they still be as attractive? If highway infrastructure wasn't heavily subsidized and gas taxes were raised to pay for the roads people use for their super-commutes, would people still want to drive 100km or more a day?

Originally Posted by Build.It

I've long been advocating for property tax calculation methods to be reformed so that people pay their true cost to the municipality. Agree with you there.

Not so sure I agree about the gas tax - it's something I'd have to think about a bit more.

Roads are a good point. But road tax / gas tax is supposed to pay for that, no?

Hydro and gas already run throughout the countryside, so you might be tacking on a few grand for the hookups from the main road throughout the new subdivision.

But water and sewer, you can only charge so much before it makes sense to just use a well + septic system.

[1overcosc]

Originally Posted by jonny24

Roads are a good point. But road tax / gas tax is supposed to pay for that, no?

Hydro and gas already run throughout the countryside, so you might be tacking on a few grand for the hookups from the main road throughout the new subdivision.

But water and sewer, you can only charge so much before it makes sense to just use a well + septic system.

In Ontario, new homes have to pay for the cost of any new hydro hookups. Some people moving to rural properties in places like cottage country are quoted tens of thousands to install hydro for a new build on a vacant lot (because often the nearest hydro pole is a few hundred metres away), and quite a few of these folks are actually choosing to go off grid with solar and battery instead.

[jonny24]

Originally Posted by 1overcosc

In Ontario, new homes have to pay for the cost of any new hydro hookups. Some people moving to rural properties in places like cottage country are quoted tens of thousands to install hydro for a new build on a vacant lot (because often the nearest hydro pole is a few hundred metres away), and quite a few of these folks are actually choosing to go off grid with solar and battery instead.

I was thinking along the lines of, someone has sold their 100-acre farm, and that parcel is now being developed all at once as a subdivision. Getting a hydro crew out to the bush to do a remote one-off hookup could easily be 10s of thousands, but a dedicated crew laying out a greenfield suburb, split between the cost of each home, should be much more efficient, and therefore cheaper.

[Build.It]

Not sure if this is how it works or not, but one would think that property taxes for new subdivisions would also include some sort of ammortized future maintenance for service corridors and roads leading to the property.

[Build.It]

Originally Posted by lio45

I have friends who live in Switzerland. Apparently pretty much everyone rents over there, as real estate is just unattainable for regular people. My friends are all highly-paid professionals but that’s not enough to meet the “owner class” threshold there. So they rent. And will rent until they either die of old age or move to another country.

Despite that, the sun keeps rising up in the morning in Switzerland…

Just because the sun still rises there doesn't mean that level of unaffordability is desirable. Switzerland has an actual land shortage. We have an artificial land shortage. The eye test reveals that Switzerland also has a much much higher urban land area % than we do.

And renting in and of itself is not bad, however it depends on the terms and who you are renting from. I'm personally not on board with most people renting from the government, as they do in Austria for example. I'd much rather have a law that requires every tenant to obtain non-payment insurance to cover the landlord in the event that the tenants can no longer afford rent while they wait for a court ruling.

[theman23]

Originally Posted by Build.It

Just because the sun still rises there doesn't mean that level of unaffordability is desirable. Switzerland has an actual land shortage. We have an artificial land shortage. The eye test reveals that Switzerland also has a much much higher urban land area % than we do.

And renting in and of itself is not bad, however it depends on the terms and who you are renting from. I'm personally not on board with most people renting from the government, as they do in Austria for example. I'd much rather have a law that requires every tenant to obtain non-payment insurance to cover the landlord in the event that the tenants can no longer afford rent while they wait for a court ruling.

Don’t see what that accomplishes. Would be more efficient to just hike the rent and cut out the middle man.

[Acajack]

Originally Posted by MolsonExport

Fair enough. I know a lot about affordability, having spent a couple years (early 90s) living in a trailor (yes) and then many years in a substandard apartment (mid-late nineties), because I could not get into the Vancouver condo market.

However, as pointed out by Lio, one only "benefits" when one sells, and if the place that one is moving to is also of a similarly high(er) price, then one has not really "benefited" at all from escalating housing prices, no matter what the explanation is for this rise. The relative price difference between London and Toronto has narrowed only slightly over the past decade or so...London prices have certainly skyrocketed, but so too have Toronto's, and the average wages/salaries of those living in London is much less than the corresponding averages for Toronto.

Maybe when I die, and the kids inherit, somebody will "benefit" from the fixed asset price rise.

And even so, with current life expectancy your kids (and mine) will likely be quite old before they receive any type of inheritance from us. Certainly well past the age where they start a family and think about buying a home to raise them in.

Which leaves us with the option of cashing out of our houses by downsizing when in retirement, and giving our kids an early inheritance that they can use as a down payment on a house. (Assuming it's even enough - not sure.)

[lio45]

Originally Posted by Acajack

And even so, with current life expectancy your kids (and mine) will likely be quite old before they receive any type of inheritance from us. Certainly well past the age where they start a family and think about buying a home to raise them in.

Which leaves us with the option of cashing out of our houses by downsizing when in retirement, and giving our kids an early inheritance that they can use as a down payment on a house. (Assuming it's even enough - not sure.)

As I said earlier, the more kids you have the less well this works. Maybe we could go back to a somewhat feudal system in which one lucky kid (firstborn typically) inherits the property while the other kids get nothing…

You don’t need to move out to give downpayment help to your kids, you can simply refinance your mostly-paid-off SFH. Again though, the more kids one has, the less real-estate-equity-per-capita for the next generation. With more than two-three kids it’s likely not even viable.