The good news is: We seem to be reaching a turning point on the housing issue – people know there is a problem and the chorus of voices calling for change is getting stronger.
The bad news is: We haven’t yet confronted the depth and nature of the political challenge. It’s so politically fraught that it sometimes feels intractable.
As the price of housing continues to rise not just in Canada’s big cities but in smaller cities and towns too, the urgency of the policy challenge is increasing. Fortunately, politicians, business leaders and policy thinkers are starting to take notice.
MORE SIGNAL. LESS NOISE. THE HUB NEWSLETTER.
Even more optimistically, an increasing majority of these voices understand that tinkering on the demand side of the equation will not fix the problem. The cause of increasingly out-of-reach housing prices is not minor, therefore, the solutions will not be found by making minor policy tweaks.
Though some, including the federal government, still claim that taxing foreign buyers or investing in affordable housing here and there will solve the problem, consensus is building around the correct diagnosis of the problem. Canada does not have anywhere near enough housing supply for the number of interested buyers (and sometimes renters) and the single biggest reason for this is planning and land use restrictions that get in the way of development.
The reason these restrictions remain, both as a general matter of policy and in specific instances of application, is because existing homeowners do not want their streets, their neighbourhoods and their towns to change. They elect representatives who will uphold the status quo and punish politicians who threaten it. The common reaction to this challenge is for pro-growth voices to bemoan the selfishness of NIMBYism. We shake our heads and our fists and write snarky columns about their hypocrisy.
Some in Canada, to their credit, are making early forays into trying to counter NIMBYism with YIMBYism (Yes, please, in my backyard!). This pro-development enthusiasm at the policy level, though rare, is welcome and helps contribute to a public narrative which occasionally pushes back against the NIMBY majority. But it is not enough.
An approach that forces through unwanted new developments is politically dead on arrival.
Efforts to make housing more accessible and affordable must ultimately endeavour to bring Canadians onside at the grassroots level. A viable plan must not seek to slip through development approvals without the neighbourhood noticing, nor should it ram through major policy overhauls against the wishes of voters only to have them overturned when a new government gets elected on a promise to bring back local control.
An approach that forces through unwanted new developments (both big city towers and new suburban sprawl) is not only politically dead on arrival, it’s inconsistent with the values of a good society.
There are no doubt unethical manifestations of NIMBYism that we should dismiss. Arguments against new developments are often no more than thinly veiled racism, classism and selfishness. But we should not ignore other legitimate concerns. The desire of a community to preserve its heritage, culture and history is legitimate.
An attachment to parkland, greenspace, mature trees and sunlight is legitimate. And yes, a desire to keep one’s surroundings beautiful is legitimate. We need look no further than the recent outrage over plans to “modernize” the Chateau Laurier in Ottawa to understand that Canadians want to keep their traditional buildings attractive. It is not snobbish or immoral to want your neighbourhood to look and feel good.
More practically speaking, incumbent homeowners do not want to see the value of their homes erode. This challenge is harder to confront but confront it we must. The Liberal government has sought to indulge Canada’s baby boomer homeowners by denying the realities of the need for more housing supply. I can’t say I blame the government for worrying about messing with what is effectively the retirement savings of much of our population. But increasing housing supply must not necessarily erode home values across the board. While an increase in supply would certainly take some of the heat out of the market (after all, that’s the whole point), we know that at the local level, development can sometimes add value to incumbent properties, often many times over.
What is clear is that any approach that dismisses concerns about local neighbourhood character or eroding home values for current owners is both politically and morally unpalatable. So, is there a better way?
It is worth looking to the United Kingdom which, while different on the details for a number of reasons, is confronting a fundamentally similar housing supply and accessibility challenge. As part of an attempt to further solidify a new voting coalition of working-class Conservative voters, Prime Minister Boris Johnson and his government have been re-thinking planning rules to encourage more development.
They issued a white paper to explore options and are in the midst of grappling with political opposition from their own party’s benches. Foreseeing the challenge of this political opposition, British think tank Policy Exchange put out a paper called Strong Suburbs earlier this year to try to promote politically viable policy change.
The paper explores a very specific idea: empowering incumbent homeowners at the local street level to opt into their own gentle densification. This means that a majority of homeowners on an individual street in a suburban community in England could decide to welcome multi-family, multi-floor terrace homes (think beautiful brownstone walk-ups more common on the streets in Paris and London) instead of single-family bungalows, adding value to their properties and multiplying housing availability in their community.
Streets would be empowered to opt in with some constraints placed on height (in consideration of neighbouring streets) and homeowners would be encouraged to apply design and beauty stipulations for developers, avoiding styles that would ruin the look and feel of the community. The paper uses economic modelling to make the case that incumbents would see the values of their property increase, encouraging more and more streets to opt in, thus significantly increasing the overall supply of housing in the country.
There are no doubt challenges with this model and the devil may well be in the details. But it is well past time that Canada start exploring options like the one outlined in this paper.
Our housing discussion still naively assumes we must either ignore the problem and tinker at the margins or grit our teeth and gear up for a big fight to ram through new planning and zoning rules which would be stopped or reversed when voters inevitably put up a fight.
Canada’s nascent YIMBY movement is encouraging and as others have pointed out, the number of voters who cannot afford homeownership is growing. Now we must confront the political challenge, painting a picture for Canadians who own homes and for Canadians who do not, of what a better future with more plentiful, beautiful housing could look like and how we might get there.
