Full Comment - October 09, 2023


The housing crisis is a sign of worse things to come


Episode Stats

Length

37 minutes

Words per Minute

176.46901

Word Count

6,592

Sentence Count

349

Misogynist Sentences

3

Hate Speech Sentences

5


Summary

Ben Rabideau is an entrepreneur, a data guy, the founder of Edge Realty Analytics, and someone that politicians of all stripes regularly seek out for advice on housing issues. In this episode, we talk to Ben about the housing crisis in Canada, why it s so bad, and what we can do to fix it.


Transcript

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00:01:11.520 You're richer than you think.
00:01:18.960 Housing.
00:01:19.680 It's an issue that's gone from something we rarely thought of, that we took for granted,
00:01:24.500 to being the hottest political issue of the day.
00:01:27.200 Elected officials at the federal, provincial, municipal levels are all talking about housing
00:01:31.620 and what we can do about prices, how we can build more homes to bring balance back to the market.
00:01:37.060 And the man they often seek out for advice on that issue is Ben Rabideau,
00:01:40.520 the focus of this week's edition of the Full Comment Podcast.
00:01:43.940 Hello and welcome to the Full Comment Podcast.
00:01:46.760 My name is Brian Lilly, your host.
00:01:48.160 And before we get to our guest, I want to remind you to please hit that subscribe button
00:01:52.820 on whatever app or device you're listening to us on and make sure you share this podcast
00:01:56.860 on social media because yes, you can still share podcasts on social media in Canada.
00:02:02.560 Now, Ben Rabideau has agreed to spend time with us over the next little bit to try and delve
00:02:06.240 deeper into the issue of housing.
00:02:08.080 Ben is an entrepreneur, a data guy, the founder of Edge Realty Analytics,
00:02:13.220 and someone that politicians of all stripes are regularly seeking out for advice.
00:02:17.300 Few people can say that both Justin Trudeau and Pierre Polyev have consulted them on an issue,
00:02:22.320 but that's because Ben looks at housing and what needs to be done from a data-driven
00:02:27.160 rather than a partisan lens.
00:02:29.680 Recently, he spoke to all parties at the Finance Committee of the House of Commons
00:02:33.500 on what needs to be done to solve the housing crisis.
00:02:37.080 And now, Ben is making time for us.
00:02:39.300 Ben, thanks for the time.
00:02:40.920 Thanks for your invitation, Brian.
00:02:41.900 Is it shocking to you that in a few short years we've gone from this being just an expectation
00:02:50.040 that we would all, you know, as I said, come out of school, save up some money,
00:02:55.160 buy a house, that this was normal, and we've gone from that being what we all expected
00:03:00.920 to people saying, I will never own a house.
00:03:04.580 It is just not feasible in my future.
00:03:08.120 How shocking is that to you?
00:03:10.320 Well, I guess as someone who kind of lives and breathes housing and has for the past decade,
00:03:15.420 it's, in my mind, it's been a slow burn.
00:03:18.000 So I know it's kind of leapt into the public consciousness really in the last couple of years,
00:03:21.900 particularly with the recent run-up in interest rates.
00:03:24.760 But it's been sort of a simmering crisis for quite a while, masked in part by the fact that
00:03:30.860 we had such exceptionally low rates for so long, but we could see this building imbalance
00:03:36.960 between supply and demand that was sort of simmering under the surface for years, really.
00:03:42.420 And then we saw the run-up in prices, and then it kind of catalyzed when we had this run-up
00:03:48.620 in interest rates that has really forced it.
00:03:50.960 But there's a second thing as well that I think is perhaps more pressing at the moment,
00:03:56.040 which is just the incredible disruption that we're seeing in the rental market.
00:04:00.320 And that, I think, is really perhaps the easier of the policy solutions to address,
00:04:06.120 because when you really start to dig into the root cause of that, it's really very simple.
00:04:11.840 We've had an explosion in the number of non-permanent residents in Canada,
00:04:17.040 which I know is something we want to talk about, the whole population dynamics,
00:04:20.960 but just to frame the issue, out of Ottawa, we have a federal target around permanent residency.
00:04:27.600 And so it's set at $465,000 for this year.
00:04:30.660 And I don't think anyone really has a fundamental issue with that particular target.
00:04:34.940 I think we all recognize we need strong immigration.
00:04:37.900 So we'll set that aside.
00:04:39.620 The Fed's target permanent residency.
00:04:41.500 But separate to that, we have non-permanent residents.
00:04:44.220 And these are primarily international students and temporary workers.
00:04:49.080 And those numbers have absolutely exploded.
00:04:51.320 We've added 700,000 in the past year.
00:04:54.680 It's accounted for, that cohort has accounted for 71% of population growth over the last two years.
00:05:00.180 And they're overwhelmingly renters.
00:05:01.800 And so you have to, it seems kind of common sense when you say it out loud.
00:05:06.880 But yeah, if you add 700,000 renters into the Canadian population in a year,
00:05:10.980 you're going to have enormous issues in the rental market.
00:05:14.220 And that's exactly what we're seeing.
00:05:17.080 I know that Mike Moffitt, who works in this field,
00:05:19.660 professor at Ivy School of Business at Western University of Western Ontario,
00:05:24.700 he's looked at this and he plotted out in a couple of charts
00:05:28.580 how the cities and towns with the highest concentration of foreign students being brought in
00:05:37.240 had the biggest rental crunch.
00:05:40.260 Is that your experience as well?
00:05:42.860 Yeah, the numbers are really clear.
00:05:44.120 You just can't get away from it.
00:05:45.240 I think this is such a simple, it's such a clear correlation here.
00:05:50.820 You just, you can't, you can't get away from it.
00:05:53.360 So 700,000 in a year, of course,
00:05:56.200 is going to have all sorts of externalities in the rental market.
00:05:58.580 And it's one of the kind of low-hanging policy discussions that we should be having, right?
00:06:06.540 It's something that can be addressed, you know, relatively cleanly.
00:06:12.100 So the numbers that just came out of Stats Canada yesterday
00:06:15.340 were that as of July 1st, 2023,
00:06:19.080 there were 2.2 million non-permanent residents in Canada.
00:06:24.420 That was a 46% increase from the year earlier.
00:06:29.700 As you say, if you just say non-permanent residents,
00:06:32.020 that's everyone from someone who gets a job,
00:06:36.580 is a migrant farm worker,
00:06:39.900 someone who gets a job coaching an NHL team that isn't a Canadian citizen,
00:06:43.820 anything like that.
00:06:44.620 They all qualify under that.
00:06:45.820 But the biggest concentration is the explosion in students.
00:06:53.480 It seemed to catch the government by surprise that the new minister was brought in,
00:06:58.660 and we'd been talking about 700,000 to 800,000.
00:07:00.840 And he said, no, we're going to have 900,000 this year.
00:07:04.340 I mean, that's a large city that you're just plopping down in the middle of the country
00:07:10.020 with no planning for how to deal with that population.
00:07:14.400 No forethought in terms of, okay, well, we can bring these students in,
00:07:18.940 and the schools can make a lot of money off of them
00:07:22.540 because they can charge extra tuition.
00:07:25.200 But no thought to what it would do to, you know,
00:07:29.260 will they have a place to live?
00:07:30.440 We've seen in North Bay some students living under a bridge in tents.
00:07:35.620 But, I mean, it seems like this was a policy decision
00:07:41.360 with no forethought of the consequences.
00:07:44.740 Well, I think that's exactly the issue.
00:07:46.480 It's not that we necessarily have a fundamental issue with that level of growth.
00:07:52.820 It's that you just can't drop that many people
00:07:56.620 without any forethought to how you're going to house them
00:07:59.740 and what sort of strain that might place on some of the social systems broadly.
00:08:04.860 And it's just flat out a policy failure.
00:08:08.460 Now, one of the things that gets tricky in all of this
00:08:11.720 and that I find kind of, I don't know, I guess offensive
00:08:16.660 is that you alluded to the fact that the post-secondary institutions
00:08:21.760 obviously welcome international students
00:08:24.000 because of the much higher tuitions, right?
00:08:25.840 Typically four to five times the Canadian students.
00:08:31.500 But what's interesting is I don't think people realize
00:08:34.560 that oftentimes colleges will partner with for-profit entities
00:08:39.580 to outsource the teaching to them.
00:08:42.200 And so, for example, we have colleges in Ontario
00:08:43.820 that have 80% of their enrollment are international students.
00:08:47.080 And those colleges partner with these for-profit entities
00:08:49.920 that handle the teaching.
00:08:51.240 They effectively are responsible for the recruiting internationally.
00:08:55.920 And so there's a profit motive.
00:08:57.940 It's like the school has franchised out their name.
00:09:00.640 That's exactly right.
00:09:01.700 And so we're effectively allowing for-profit entities
00:09:05.200 to outsource this.
00:09:07.720 And there's no caps from the government,
00:09:11.440 which to me, like the incentive is all wrong there.
00:09:14.220 If you're going to incentivize people to make this sort of money
00:09:17.720 by bringing students here and sort of gaming the system
00:09:21.140 with no responsibility to provide that housing,
00:09:24.980 like why wouldn't they?
00:09:25.960 It's free money, right?
00:09:27.160 And even more alarming than that,
00:09:28.740 that you might find interesting, Brian,
00:09:29.800 is I started doing some digging on this
00:09:31.180 because this is what I do.
00:09:32.260 And I pulled up the articles of incorporation
00:09:35.100 for just one of these companies.
00:09:36.400 The very first one I opened,
00:09:37.620 two of the three founders were from mainland China,
00:09:41.620 which I don't know what that means.
00:09:42.900 But I think as Canadians,
00:09:44.660 we should be somewhat alarmed
00:09:46.780 that we have for-profit entities
00:09:48.160 owned by non-Canadians
00:09:49.780 that are effectively selling citizenship
00:09:53.440 or fast-track citizenship in Canada
00:09:56.140 with no responsibility.
00:09:57.400 It's not a good look.
00:09:58.640 And we need to be looking more seriously at this.
00:10:00.880 Well, and for people that don't know,
00:10:02.300 part of the appeal,
00:10:04.300 part of the sales pitch
00:10:05.560 is go to school in Canada,
00:10:09.120 you get on the fast track for citizenship.
00:10:11.640 Because if you have foreign experience
00:10:13.580 or, sorry, Canadian experience
00:10:15.800 in working or in studying,
00:10:19.400 you get extra points for becoming a citizen.
00:10:22.260 And so that, you're right,
00:10:24.400 there is a sales pitch going on at all levels
00:10:27.060 and people are making a lot of money off of this,
00:10:29.280 but it's having a huge impact on the housing system.
00:10:32.780 Beyond everything else,
00:10:33.800 the housing system is out of whack.
00:10:35.520 And I live in a condo building
00:10:37.340 in the middle of downtown Toronto,
00:10:38.900 right by U of T.
00:10:40.100 let me tell you that the other day
00:10:42.400 probably passed 100 people on walk with my dog
00:10:46.580 and 80% of them were young Chinese students.
00:10:50.200 U of T is just one school of many
00:10:52.840 that rely on a large amount
00:10:55.440 of foreign students to come in
00:10:57.400 because they've got caps on tuition
00:11:02.360 imposed by the provincial government.
00:11:04.320 So you've got a whole mess of policies
00:11:06.820 from both the federal government
00:11:08.240 and the provincial government.
00:11:09.740 And the end result is
00:11:11.320 a one-bedroom condo near me
00:11:14.040 now costs about $3,000 a month to rent.
00:11:17.260 Right.
00:11:17.800 And it also incentivizes speculation
00:11:20.080 in the single family market, right?
00:11:21.660 So one of the things that we're seeing
00:11:22.740 is the economics of rentals.
00:11:25.320 If you were to buy a single family home
00:11:26.900 in Toronto and try to rent it to one family,
00:11:29.060 you're never going to make those numbers work.
00:11:30.860 You'll just be deeply cashflow negative.
00:11:32.460 But if you can instead put 10 or 12
00:11:35.380 international students in there
00:11:37.020 and charge them each 500 bucks,
00:11:38.960 well, now all of a sudden
00:11:39.580 you have an investment case.
00:11:41.140 And we're absolutely seeing that dynamic
00:11:43.320 where because there's such a shortage
00:11:45.480 of places to live
00:11:46.360 and because we've seen such an explosion
00:11:48.700 in international students,
00:11:50.340 people are figuring out
00:11:51.120 we can buy single family homes,
00:11:53.240 remove those off the market.
00:11:54.340 They enter this kind of rental pool,
00:11:56.700 jam them full of international students.
00:11:58.360 And I want to be really clear,
00:12:00.500 the international students themselves
00:12:02.140 have been sold a false bill of goods here, right?
00:12:04.400 They've been taken care of.
00:12:05.240 I'm in no way suggesting
00:12:07.260 that they themselves are the problem.
00:12:09.320 It's that we're allowing the recruiting,
00:12:11.660 we're allowing the misrepresentation
00:12:13.280 of the system internationally.
00:12:16.120 And that's fundamentally the problem.
00:12:17.620 And you're right,
00:12:18.000 it's a problem at both the provincial
00:12:19.420 and the federal level.
00:12:20.200 There's multiple players involved
00:12:22.020 that need to get together
00:12:22.840 and figure this out.
00:12:23.500 So before we start talking about
00:12:25.620 trying to bring some sanity
00:12:30.160 back to the housing market
00:12:33.020 in terms of people purchasing a home,
00:12:34.680 buying that first home,
00:12:35.740 getting into the market,
00:12:37.520 I want to ask you about rentals.
00:12:39.360 One thing that I've been hearing
00:12:40.500 a lot about in the United States
00:12:42.480 is the idea that large investment funds
00:12:48.520 are going around
00:12:49.680 and buying up single family homes
00:12:51.140 and turning it into rental stock
00:12:54.960 that they're outbidding.
00:12:56.600 Have you seen any evidence of that
00:12:58.840 in Canada at this point?
00:13:00.540 No, I think that story is overblown.
00:13:02.780 Certainly there are corporate interests at play
00:13:05.940 that are buying some.
00:13:07.260 It's really not.
00:13:08.420 I think it's an insignificant number.
00:13:09.700 And the reason is just that
00:13:10.620 that business model does not scale in Canada.
00:13:13.400 In the US, you can buy a single family home
00:13:15.460 and you can cash flow it
00:13:17.300 even at current rates
00:13:18.540 because house prices are not so crazy there.
00:13:21.140 If you try to do that in Canada,
00:13:23.300 every home that you...
00:13:24.060 I mean, unless you're willing to bend the rules
00:13:25.720 and as I said,
00:13:26.920 put a bunch of international students in it,
00:13:28.820 which these corporations are not.
00:13:32.100 The business model, it can't scale
00:13:34.400 because every time you buy one,
00:13:35.840 you're in negative cash flow position, right?
00:13:38.700 The rents are not going to cover
00:13:39.800 if you're going to finance that
00:13:40.760 at 70% loan to value or whatever.
00:13:44.460 It's just not a scalable model.
00:13:46.260 And so the ones that tried to break into Canada
00:13:48.220 and look at that model
00:13:49.020 quickly realize that the economics are not there.
00:13:51.440 So I think that narrative was overblown,
00:13:53.540 to be honest.
00:13:54.800 Okay, but it is something that's happening
00:13:56.480 in the United States to a degree.
00:13:58.700 Without question,
00:13:59.820 it was happening in the United States.
00:14:01.000 Absolutely.
00:14:02.060 But it can't here.
00:14:03.940 I mean, that's in part
00:14:05.280 because our housing prices are so much higher.
00:14:09.180 How did we get here?
00:14:10.680 How did we get to the point
00:14:11.860 that we're so out of whack
00:14:13.640 with where the Americans are?
00:14:16.600 You know, my sense from just my time
00:14:19.940 buying and selling homes
00:14:21.980 and not as an investor,
00:14:23.640 just as a place to live,
00:14:24.860 is that we've always been a little bit higher,
00:14:27.420 but now we're a lot higher.
00:14:29.220 And how did we get on that track
00:14:31.200 where the idea of, you know,
00:14:34.820 a home costing three years of income
00:14:37.980 or four years of income
00:14:39.220 that it's no longer the case?
00:14:43.960 Well, it's been a slow burn.
00:14:46.080 It's been something
00:14:47.020 that's been unfolding over years.
00:14:48.580 The fundamental difference
00:14:49.620 between Canada and the U.S.,
00:14:51.060 it's first important to note
00:14:52.700 that Canada,
00:14:54.140 in spite of the vast geography here,
00:14:56.560 we're actually very urbanized, right?
00:14:58.580 So there's a very high proportion
00:15:00.180 of Canadians that live in big cities.
00:15:02.180 And unlike in the U.S.,
00:15:03.320 we really don't have affordable
00:15:04.880 secondary markets
00:15:06.500 in places like Ontario and B.C., right?
00:15:08.920 It's different when you get
00:15:09.720 on the prairies and out east,
00:15:10.960 but really the big provinces
00:15:13.380 that move the needle
00:15:14.280 don't have secondary cities
00:15:16.360 that are particularly affordable.
00:15:17.360 So for example,
00:15:18.020 like you can drive or commute
00:15:20.040 an hour, an hour and a half
00:15:21.500 out of Manhattan,
00:15:22.220 and you can find single family homes
00:15:24.880 that are $300,000 U.S.
00:15:26.780 Now you try going an hour
00:15:28.280 from downtown Toronto,
00:15:30.140 you're not going to find anything
00:15:31.220 for under a million, right?
00:15:32.800 So even when you do
00:15:33.380 the currency adjustment,
00:15:34.280 we're just, it doesn't make sense.
00:15:36.500 And so now in terms
00:15:37.500 of how we got here,
00:15:39.240 I think that the number one issue
00:15:41.820 is we have just made it
00:15:43.400 so difficult to build homes.
00:15:46.660 We've just seen such a,
00:15:48.760 there's so much red tape,
00:15:49.980 it's so difficult
00:15:50.680 to bring supply to market
00:15:52.480 that we just have not seen
00:15:54.880 the supply keep up
00:15:55.880 with population growth.
00:15:57.200 And I think that's any policy
00:15:59.180 that we're seeing,
00:15:59.720 and I think we're starting
00:16:00.640 to get a recognition
00:16:01.360 out of Ottawa
00:16:02.100 that that is the fundamental pinch point.
00:16:04.180 The federal government
00:16:05.200 can sort of control population growth
00:16:08.660 or target population growth,
00:16:10.100 but the actual ability
00:16:11.880 or willingness to deliver the supply
00:16:13.360 rests with the municipalities.
00:16:15.180 And fundamentally,
00:16:16.020 the issue is that
00:16:16.820 you have municipal counselors
00:16:18.000 that have to listen
00:16:18.820 to their neighbors,
00:16:19.660 be like, hey man,
00:16:20.200 I don't want a shadow
00:16:21.860 from this building
00:16:22.720 in my backyard,
00:16:25.120 or I don't want,
00:16:25.860 and it's just a constant nimbyism,
00:16:28.280 this not in my backyard mentality
00:16:30.080 that is really inhibiting
00:16:31.960 the ability to deliver that supply.
00:16:34.180 So we're starting to see
00:16:35.400 recognition out of Ottawa
00:16:36.440 that that is a fundamental problem,
00:16:38.140 and we're starting to see
00:16:39.580 moves to address that.
00:16:40.760 So I'm optimistic
00:16:42.200 that we might start
00:16:43.060 to move the needle there,
00:16:43.880 but it's been a bunch
00:16:44.660 of small things
00:16:45.600 that have sort of contributed
00:16:46.560 to this over time,
00:16:47.220 but that's probably
00:16:47.740 the biggest one.
00:16:49.700 One of the complaints
00:16:50.460 that you hear
00:16:53.640 from the more progressive side
00:16:55.520 is that this is about
00:16:56.460 the financialization of housing,
00:16:58.820 that we've made housing
00:17:01.960 something you invest in
00:17:03.100 rather than something
00:17:03.800 you live in.
00:17:05.560 What do you say
00:17:06.540 about that argument?
00:17:07.580 Is there truth to it?
00:17:09.700 There is some truth for sure.
00:17:11.560 I don't know that I would frame it
00:17:13.200 as a financialization issue.
00:17:15.220 I think, again,
00:17:15.820 it gets back to kind of incentives.
00:17:17.500 And so, look,
00:17:20.040 if you look at a chart
00:17:21.180 of business investment
00:17:22.140 as a share of GDP,
00:17:23.520 and you look at a chart
00:17:24.500 of residential investment,
00:17:25.980 so investment in housing,
00:17:28.360 renovation expenditures,
00:17:29.680 new construction,
00:17:30.860 those two lines
00:17:31.960 have gone in
00:17:32.300 completely opposite directions.
00:17:33.400 So we now have a record low
00:17:35.000 in terms of business investment
00:17:36.880 as a share of GDP
00:17:37.580 and very near a record high
00:17:39.480 in terms of residential investment.
00:17:41.060 Now, why is that?
00:17:42.240 I would argue that
00:17:43.320 one of the fundamental issues
00:17:45.120 we have in Canada
00:17:45.860 is it used to be
00:17:47.680 that if you wanted
00:17:48.300 to build financial security,
00:17:50.120 you would go out
00:17:51.220 and you would invest in business,
00:17:52.460 you would build it up,
00:17:53.280 you would hire people,
00:17:54.140 you would create something of value.
00:17:55.980 And that was the means
00:17:57.540 to create that financial stability.
00:17:59.300 And today,
00:17:59.820 it's really because
00:18:00.560 of the tax structure
00:18:01.420 and some of the incentives
00:18:02.180 and the fact that
00:18:03.020 there is not enough housing
00:18:04.480 and so it creates speculation.
00:18:06.840 Now, if you want to get
00:18:07.740 financially secure,
00:18:09.200 you go out
00:18:09.620 and you buy the biggest house you can
00:18:10.920 and you borrow as much money
00:18:11.920 and then you just sit
00:18:12.640 and you let the tax-free
00:18:14.020 capital gains accrue.
00:18:16.000 And that's a problem
00:18:17.800 because what it means
00:18:19.060 is we're not investing
00:18:20.440 in future productivity growth
00:18:22.540 in this country.
00:18:23.320 And that is really
00:18:24.540 a major issue.
00:18:26.300 And so more than anything,
00:18:28.600 I wouldn't characterize
00:18:29.240 it as financialization.
00:18:30.060 I just think we have
00:18:30.600 misalignment in terms of
00:18:32.260 how we build wealth
00:18:33.520 in this country.
00:18:35.280 Well, for an awful lot of people,
00:18:36.720 the retirement plan
00:18:37.680 is buying their home,
00:18:39.980 paying it off,
00:18:40.800 and then that becomes
00:18:42.260 a big part of their
00:18:43.240 retirement future,
00:18:45.300 isn't it?
00:18:46.880 Absolutely, we see that.
00:18:47.960 And so we can look
00:18:49.180 at something like
00:18:49.820 the share of household assets
00:18:51.300 that are connected
00:18:52.160 to residential real estate.
00:18:53.400 It's close to the highest
00:18:54.280 on record.
00:18:55.480 So there's no question
00:18:56.420 that that's the case.
00:18:57.860 I just don't think
00:18:58.720 it's not conducive
00:19:00.600 long-term to building
00:19:01.420 a prosperous economy.
00:19:02.540 And so to frame it for you,
00:19:04.940 when we look at
00:19:05.580 all investment in Canada,
00:19:07.200 right,
00:19:07.440 and that includes
00:19:08.220 public sector investment,
00:19:09.560 building bridges
00:19:10.260 and roads
00:19:11.900 and everything else,
00:19:12.760 private sector investment
00:19:14.040 in businesses,
00:19:14.920 and then residential investment.
00:19:17.340 So housing investment alone
00:19:19.120 accounts for about 40%
00:19:20.380 of all investment
00:19:21.480 in the country.
00:19:22.240 And you might say,
00:19:22.700 well, what does that mean?
00:19:23.400 That's just a nebulous number.
00:19:24.980 There's no context to it.
00:19:27.440 But if we look at OECD countries
00:19:29.760 in the last 30 years
00:19:31.160 that have hit that threshold,
00:19:32.740 there's only ever been three,
00:19:33.760 and it was Spain,
00:19:34.840 Greece,
00:19:35.140 and Ireland
00:19:35.680 in the mid-2000s.
00:19:37.440 And the subsequent years
00:19:38.860 were devastating
00:19:39.560 for those countries
00:19:40.360 precisely because
00:19:41.460 they had a massive
00:19:42.920 capital allocation
00:19:43.840 towards non-productive
00:19:45.320 real estate
00:19:45.840 and away from businesses.
00:19:47.680 And ultimately,
00:19:48.300 in order to justify
00:19:49.820 these high house prices,
00:19:50.960 we have to have
00:19:52.180 economic growth
00:19:53.800 that will build
00:19:54.820 our way out of it.
00:19:56.340 And in countries
00:19:57.380 that have not had that model,
00:19:59.720 it's been a very rough
00:20:01.120 go for them.
00:20:02.040 Now, maybe Canada
00:20:02.800 is going to be different,
00:20:03.540 but I'm not super optimistic
00:20:04.900 that's going to be the case.
00:20:06.840 All right.
00:20:07.100 When we come back,
00:20:08.000 we're going to take
00:20:08.520 a quick break right now,
00:20:09.400 but when we come back,
00:20:10.200 I want to ask you about
00:20:10.940 what policies can be brought
00:20:12.860 in to build that capacity,
00:20:15.300 to build those homes
00:20:16.300 that we need,
00:20:16.960 whether it's for those of us
00:20:18.200 who are living here already
00:20:19.280 or the half a million
00:20:21.300 people a year
00:20:22.140 that are coming in
00:20:22.840 just as permanent residents,
00:20:24.220 never mind,
00:20:24.660 as we've already discussed,
00:20:25.880 the non-permanent residents
00:20:27.300 coming in
00:20:27.940 at super high numbers.
00:20:29.600 More on that
00:20:30.440 when we're back.
00:20:32.120 When you look at the numbers
00:20:33.380 that are put forward
00:20:34.600 by politicians,
00:20:35.620 by housing experts,
00:20:37.020 it's staggering.
00:20:38.200 Ontario alone
00:20:39.180 needs to build
00:20:40.260 1.5 million homes
00:20:42.840 over the next 10 years
00:20:44.540 just to keep up
00:20:45.940 with where we are now
00:20:47.140 in terms of affordability.
00:20:48.460 That's before even
00:20:49.360 doing anything
00:20:51.120 to bring house prices down.
00:20:54.040 Is that even feasible?
00:20:56.240 Ben,
00:20:56.820 that's a question
00:20:57.720 I'll put to you.
00:20:58.480 I mean,
00:20:58.660 that's a lot of houses
00:20:59.880 going up at all the same time.
00:21:01.580 Now,
00:21:01.700 that's not all
00:21:02.300 single-family homes.
00:21:03.880 You know,
00:21:04.540 the building going up
00:21:05.600 right next to me
00:21:06.220 is going to have
00:21:06.980 several thousand of those,
00:21:08.820 or sorry,
00:21:09.440 several hundred,
00:21:10.260 at least,
00:21:10.860 condo units,
00:21:11.860 but each of them
00:21:13.440 being a housing unit,
00:21:14.480 but can we hit
00:21:15.160 that kind of target?
00:21:16.000 I think it's 1.5 for Ontario,
00:21:17.900 3.5 million for
00:21:19.400 the whole country.
00:21:22.120 Well,
00:21:22.160 it's a daunting task
00:21:23.020 for sure.
00:21:24.180 We have done it in the past.
00:21:25.500 We have seen that level
00:21:26.580 of construction activity
00:21:27.940 in the past.
00:21:28.860 The problem today
00:21:30.060 is there's just
00:21:30.580 so many roadblocks
00:21:32.260 in the way,
00:21:33.180 particularly at the
00:21:33.960 municipal level.
00:21:34.660 So how do we get there?
00:21:36.400 I think that
00:21:37.420 the path to restoring
00:21:38.920 any reasonable affordability
00:21:40.800 that doesn't involve
00:21:42.000 just a dramatic collapse
00:21:43.420 in pricing,
00:21:44.400 I think has to be
00:21:45.840 a combination
00:21:46.680 of both demand-side measures
00:21:49.400 and incentivizing supply.
00:21:51.840 And so we've seen
00:21:54.360 the federal government
00:21:55.700 come out just recently
00:21:57.020 and announce
00:21:59.180 the removal of GST
00:22:00.700 on new rental construction.
00:22:01.740 That has had
00:22:02.280 an immediate impact.
00:22:03.420 We're already seeing
00:22:04.100 new rental applications
00:22:05.500 coming in.
00:22:06.700 So that'll move the needle.
00:22:08.520 I think anything
00:22:09.280 that incentivizes municipalities,
00:22:10.940 anything that ties
00:22:11.960 transit funding,
00:22:12.940 for example,
00:22:13.460 to the willingness
00:22:15.420 and ability municipalities
00:22:16.580 to approve
00:22:17.620 those projects
00:22:19.280 and increase density,
00:22:21.500 I think that's welcome
00:22:22.420 because we do find
00:22:23.680 that that is
00:22:24.400 the pinch point
00:22:25.380 in the delivery process.
00:22:27.280 So that's how you move
00:22:28.300 the needle
00:22:28.620 on the supply side.
00:22:30.420 On the demand side,
00:22:31.320 I still think there's
00:22:31.880 a number of smaller measures
00:22:33.620 that can work.
00:22:34.640 And so I certainly think
00:22:35.540 that revisiting
00:22:36.640 the non-permanent resident
00:22:39.060 programs is very important.
00:22:42.160 I think it's the most
00:22:42.780 pressing need right now.
00:22:44.300 But I also think
00:22:45.160 that to the extent
00:22:45.820 that Canada has been
00:22:47.440 a bit of a porous border
00:22:50.020 as it relates to
00:22:51.220 illicit capital flows
00:22:52.520 internationally,
00:22:53.760 that needs to end.
00:22:55.660 And so the government...
00:22:56.860 And what do you mean by that?
00:22:58.380 Well, I think Canada,
00:22:59.660 because we're a stable democracy,
00:23:01.100 we have strong property rights,
00:23:02.960 and frankly,
00:23:04.180 it's relatively easy
00:23:06.080 to hide capital here.
00:23:07.920 It has been a destination
00:23:10.740 for capital internationally.
00:23:14.520 And so, for example...
00:23:16.880 And is that capital
00:23:17.460 going into housing?
00:23:19.000 Absolutely.
00:23:19.580 Is that part of it?
00:23:19.900 Yeah, absolutely.
00:23:20.260 So essentially,
00:23:21.200 you're talking about
00:23:21.700 foreign buyers then?
00:23:23.620 Yeah, absolutely.
00:23:24.580 That's right.
00:23:25.040 That's right.
00:23:25.420 And in particular,
00:23:26.400 people that just want
00:23:27.280 to park their capital here
00:23:28.940 effectively as a safety box,
00:23:31.380 like just a safety deposit box,
00:23:34.020 and leave homes
00:23:37.700 potentially vacant.
00:23:39.100 Now, we don't know
00:23:39.620 how big of an issue that is,
00:23:40.880 but it certainly is happening
00:23:42.200 at some scale.
00:23:43.460 And one of the simple solutions there
00:23:45.180 is the beneficial ownership registry.
00:23:50.340 And so the idea there is
00:23:51.720 because Canada makes it so easy
00:23:54.140 to park money here
00:23:55.520 and obscure the beneficial ownership
00:23:57.600 relative to other countries,
00:23:59.560 then, of course,
00:24:00.140 someone who wants to hide that money
00:24:01.920 is naturally drawn
00:24:03.840 to a jurisdiction like Canada.
00:24:05.480 And it should be much more difficult
00:24:07.000 for them to do that.
00:24:08.340 And so a beneficial ownership registry
00:24:09.580 is important.
00:24:10.640 It just means that you can't hide
00:24:11.920 behind a corporate number
00:24:13.060 and we actually will know
00:24:15.560 who owns what property.
00:24:16.740 I mean, that's one example
00:24:17.920 that I think can move the needle.
00:24:20.300 But anything, you know,
00:24:20.980 we can tighten up on...
00:24:22.020 I think we have a problem
00:24:22.940 with mortgage document fraud
00:24:24.640 in this country.
00:24:25.240 There's a very easy fix there.
00:24:26.520 I mean, there's a lot of little things
00:24:27.700 that can kind of move the needle.
00:24:28.780 So we tried to bring in
00:24:30.320 a vacant home tax in Toronto
00:24:32.180 and it was supposed to bring in
00:24:33.400 tens of millions.
00:24:34.600 It's been a failure
00:24:35.460 because lo and behold,
00:24:37.680 very few people said,
00:24:38.900 yes, my home's vacant.
00:24:40.600 Please tax me more.
00:24:42.760 Right.
00:24:43.100 Yeah.
00:24:43.200 If you're going to bring in
00:24:43.840 any policy like that,
00:24:44.720 you have to be able to enforce it.
00:24:46.000 And that's fundamentally
00:24:46.880 one of the issues
00:24:47.760 that we have in this country
00:24:48.660 is we're very soft
00:24:49.440 on things like that.
00:24:50.280 And so we can bring in policies
00:24:51.660 like that and leave glaring loopholes.
00:24:53.600 That's not a particularly
00:24:54.700 difficult fix.
00:24:55.520 You just need to enforce it
00:24:56.660 and you need to amp up
00:24:58.080 the fines associated with it.
00:25:01.640 There have been a number
00:25:04.340 of changes at the provincial level.
00:25:07.060 I mean, in Ontario specifically,
00:25:10.580 and I know Premier Eby
00:25:12.300 in British Columbia
00:25:13.040 is making many of the same changes.
00:25:16.640 And hopefully the premiers
00:25:17.580 all talk to each other about this.
00:25:19.560 Though primarily this is an Ontario
00:25:21.240 and BC problem at the heart.
00:25:23.560 But, you know,
00:25:25.300 things like trying
00:25:27.620 to lower development charges,
00:25:29.040 trying to say
00:25:30.960 that you can build
00:25:32.280 three units
00:25:34.000 on a single family lot
00:25:35.120 as a right
00:25:35.820 or a certain level
00:25:38.220 of apartment building height
00:25:40.360 on major thoroughfares.
00:25:42.880 Are these the right types
00:25:44.360 of answers
00:25:45.220 for moving development along
00:25:47.880 when you've got this nimbyism
00:25:50.020 where, as you say,
00:25:50.660 people will complain
00:25:52.020 and say, well, yeah,
00:25:53.600 more people should live
00:25:54.660 in apartment buildings,
00:25:55.560 but not near me
00:25:56.620 because I don't want the shadow.
00:25:59.220 Right.
00:26:00.340 Absolutely.
00:26:01.040 So the development charge
00:26:02.300 one is a big one.
00:26:03.380 So typically anywhere
00:26:04.580 from 25 to 30 percent
00:26:06.360 of the value
00:26:07.300 of a new home
00:26:07.980 is various forms
00:26:09.160 of taxation.
00:26:11.100 And so to the extent
00:26:11.880 that we can get that lower,
00:26:13.300 it all else equal,
00:26:14.560 it should result
00:26:15.460 in lower new house prices.
00:26:17.220 And I think
00:26:18.760 that that that can
00:26:19.720 certainly help.
00:26:21.140 Well, just to give you
00:26:22.540 a concrete example,
00:26:24.200 in Markham,
00:26:25.740 just outside of Toronto,
00:26:27.240 development charge
00:26:28.020 for a low rise home
00:26:28.960 is one hundred and sixty
00:26:29.920 two thousand three hundred
00:26:31.900 and forty eight dollars.
00:26:32.960 That's a thirty five percent
00:26:34.200 increase from two years ago
00:26:36.040 when it was one hundred
00:26:36.700 and twenty thousand.
00:26:38.120 Yeah.
00:26:38.560 So we've got taxation
00:26:39.740 all backwards.
00:26:40.500 Your listeners are going
00:26:41.600 to hate what I'm going
00:26:42.080 to say here,
00:26:42.480 but I'm going to say it anyways.
00:26:43.240 If we look at property taxes
00:26:45.260 in Canada
00:26:46.720 versus other
00:26:47.600 major cities
00:26:49.300 across the world,
00:26:50.340 especially in the U.S.,
00:26:51.720 property taxes
00:26:52.460 are actually very low.
00:26:56.180 And what we do instead
00:26:58.000 is we effectively
00:26:59.880 subsidize existing homeowners.
00:27:01.260 And I am a homeowner,
00:27:02.060 so I'm talking against
00:27:02.700 my interest here,
00:27:03.360 but we effectively subsidize
00:27:04.460 existing homeowners
00:27:05.180 and then we jam the taxes
00:27:06.420 on new builds
00:27:07.180 and effectively push
00:27:08.460 the tax burden
00:27:09.220 onto new buyers
00:27:11.140 trying to get into the market,
00:27:12.120 which is fundamentally
00:27:13.460 the wrong way
00:27:14.080 to think about it, right?
00:27:15.100 What we would rather have
00:27:16.380 is a higher carrying cost
00:27:17.740 on existing homes
00:27:18.580 that disincentivizes speculation,
00:27:20.560 for example,
00:27:21.000 from international investors
00:27:22.080 and a lower tax burden
00:27:24.380 on bringing new homes
00:27:25.500 to market.
00:27:26.080 And that's that's how
00:27:26.900 you start to address
00:27:28.060 some of the the imbalances.
00:27:30.720 Now, people are going
00:27:31.160 to listen to this and say,
00:27:31.900 well, hey, my taxes
00:27:32.680 are extremely high already.
00:27:33.980 Yeah, I know you think that,
00:27:35.140 but go look at
00:27:35.740 other international cities.
00:27:37.100 Toronto and Vancouver
00:27:37.860 have extremely low tax rates.
00:27:40.220 And I know that's
00:27:41.060 not a popular message,
00:27:41.940 but it's it's the facts
00:27:43.240 are the facts.
00:27:44.400 I lived in Ottawa
00:27:45.340 for a long time.
00:27:46.200 The property taxes
00:27:47.280 I paid in Ottawa
00:27:48.400 were akin to a house
00:27:50.300 twice the size in Toronto
00:27:51.480 because in Ottawa,
00:27:54.380 they don't have the
00:27:55.360 the same corporate tax base
00:27:57.700 to drop on.
00:27:58.880 The federal government
00:28:00.000 is the biggest landholder
00:28:02.500 and that becomes a problem.
00:28:04.260 So in Ottawa,
00:28:04.640 they do have higher property taxes
00:28:07.680 that are more in line
00:28:08.720 with the other
00:28:09.740 international jurisdictions
00:28:10.900 you're talking about.
00:28:12.480 But those types
00:28:13.280 of property taxes
00:28:14.140 in Toronto and Vancouver
00:28:15.180 would lead to riots.
00:28:17.080 Right, exactly.
00:28:17.780 So it's it's
00:28:19.160 it's a difficult solution
00:28:20.460 because good luck
00:28:21.420 running on that platform
00:28:22.620 and getting elected.
00:28:24.040 But but if we're being honest
00:28:25.820 in discussing
00:28:26.380 one of the issues,
00:28:27.500 that is that is
00:28:28.140 a fundamental issue.
00:28:29.240 You're you're making
00:28:30.100 new construction
00:28:31.040 much more expensive
00:28:31.860 than it needs to be.
00:28:33.040 And instead,
00:28:33.980 passing those tax savings
00:28:35.480 on to existing homeowners,
00:28:36.940 which is the opposite
00:28:37.620 of what we need
00:28:38.180 to be doing
00:28:38.540 if we're serious
00:28:39.260 about addressing
00:28:39.780 the supply issue.
00:28:41.120 So, you know,
00:28:41.920 like there's a lot
00:28:43.740 of moving parts here.
00:28:44.720 It's just going to require
00:28:45.840 a lot of sort of bold thinking
00:28:47.920 on the part of politicians
00:28:49.180 to address this.
00:28:51.200 In terms of the
00:28:53.200 what the the federal government
00:28:55.660 can do versus the provincial,
00:28:57.220 it seems like
00:28:58.180 for political reasons,
00:28:59.920 they're trying to overlap.
00:29:00.900 So Ontario just passed
00:29:04.340 a bunch of regulations
00:29:07.320 like we were discussing
00:29:09.840 of how many units
00:29:11.120 you can put on
00:29:11.620 a single family home,
00:29:13.220 building as of right,
00:29:15.120 things like that.
00:29:15.920 And now the federal government
00:29:16.900 is trying to come in
00:29:17.880 and negotiate
00:29:18.760 municipality by municipality
00:29:20.840 on some of these
00:29:21.800 same things.
00:29:22.700 It it seems like,
00:29:24.380 well, maybe you should
00:29:25.080 actually talk to each other
00:29:26.220 instead of just coming up
00:29:27.680 with policies
00:29:28.220 to score political points.
00:29:29.460 Right. Well, that's a novel,
00:29:31.360 novel idea, isn't it?
00:29:32.520 I think any of those policies
00:29:34.260 that try to simplify development
00:29:36.200 and take some of the decision
00:29:38.500 making away from municipalities
00:29:39.720 are actually really good thinking.
00:29:41.140 So anything that says,
00:29:42.320 look, if you're going to do X, Y and Z,
00:29:44.600 the default position
00:29:45.860 municipality needs to be yes.
00:29:47.380 And if they're going to oppose it,
00:29:48.640 they need to have
00:29:49.220 a really good reason to
00:29:50.080 because that's what we find today
00:29:51.880 is every single proposal
00:29:53.400 that comes forward
00:29:54.320 to bring new supply
00:29:55.400 is just met with
00:29:56.500 an enormous amount of red tape
00:29:58.920 and an immediate de facto
00:30:00.540 kind of no position
00:30:01.780 on the part of the municipality.
00:30:03.280 So that needs to be removed.
00:30:04.700 But to your point,
00:30:05.400 yeah, that this needs
00:30:06.680 we need to get all levels
00:30:08.100 of government together,
00:30:09.120 municipal, provincial, federal,
00:30:10.660 and get a round table
00:30:12.580 and figure this out
00:30:13.900 and at least get some concrete
00:30:15.020 and all start pulling
00:30:16.080 in the same direction.
00:30:16.960 But I would say that
00:30:17.700 it's encouraging
00:30:19.300 that at least it's become
00:30:20.540 such a hot button issue
00:30:21.720 that it's forcing politicians
00:30:23.580 to at least
00:30:24.280 at least start to really think about it
00:30:26.780 because, yeah,
00:30:28.420 this is the number one issue
00:30:29.280 I think in Canada right now.
00:30:31.740 We've got this odd situation
00:30:34.760 where, you know,
00:30:37.500 as you say,
00:30:37.800 we're a very urbanized country.
00:30:40.020 We're also a country
00:30:41.060 with huge amounts of land
00:30:42.600 and yet we've got this strong belief
00:30:46.500 that we've got to protect that land.
00:30:48.200 You know, Ontario's Greenbelt,
00:30:49.420 one example,
00:30:50.420 but even land outside the Greenbelt,
00:30:51.980 people object to building new housing.
00:30:55.020 No, we've got somehow,
00:30:57.520 we've got this belief
00:30:58.880 that you can bring in
00:30:59.880 half a million people a year
00:31:01.980 and never build a new road
00:31:03.920 and new highway
00:31:04.520 or a new subdivision.
00:31:07.060 Do we need to have a mind shift
00:31:09.660 from either for the whole population
00:31:13.240 or for that part of the population
00:31:15.300 that seems to be very loud,
00:31:17.380 very aggressive
00:31:17.980 in always wanting to say no
00:31:19.940 to development?
00:31:21.300 Well, I, for sure we do.
00:31:25.420 We need, we need to figure out
00:31:26.940 where we're going to house our population
00:31:28.360 if we're going to maintain
00:31:30.000 anywhere close to this level
00:31:31.460 of population growth
00:31:32.300 and so I would put it
00:31:34.660 to the people
00:31:35.380 that are standing in the way
00:31:36.660 and saying,
00:31:37.420 like that are opposing any population
00:31:41.340 or any new construction,
00:31:43.200 like how are we going to do this?
00:31:44.560 What's your solution, right?
00:31:45.960 And so if we're going to protect
00:31:47.340 the Greenbelt in its entirety,
00:31:49.380 fine,
00:31:49.780 where are we going to put everyone, right?
00:31:52.440 We have to give some serious thought
00:31:54.620 to making that construction activity
00:31:59.020 more accessible
00:32:00.020 and if that means that parts
00:32:03.100 of the Greenbelt need to be revisited
00:32:04.520 and not the ecologically sensitive parts,
00:32:07.960 maybe that's a discussion
00:32:08.800 we need to have.
00:32:10.780 In terms of the slogans that you hear,
00:32:14.300 it's build up, not out.
00:32:15.720 Um, I live in a box in the sky
00:32:20.340 that works for me right now
00:32:22.420 but that's not for everyone.
00:32:24.540 Is there, is it right to say
00:32:29.400 that we should only be building up,
00:32:30.960 not out, only doing more density
00:32:32.940 or what should the mix be?
00:32:35.140 Well, it's important to contextualize it.
00:32:38.940 The major cities in Canada
00:32:40.760 relative to other big cities
00:32:42.780 of similar population
00:32:43.740 are actually not particularly dense.
00:32:46.860 So there is lots of room there
00:32:48.680 to add density
00:32:49.880 just to catch up to global peers.
00:32:51.480 And so anything that emphasizes
00:32:53.240 that makes a lot of sense
00:32:54.220 because you can,
00:32:54.860 you're effectively,
00:32:55.280 you're utilizing existing infrastructure.
00:32:57.620 Um, it, it, it's just,
00:32:58.940 it's just sensible.
00:32:59.800 So the push towards density
00:33:01.760 makes sense.
00:33:02.600 The tricky thing is
00:33:03.300 it's not always an easy sell for Canadians
00:33:05.000 because we still have very much ingrained
00:33:06.400 that the single family home
00:33:08.020 is kind of the ideal
00:33:09.060 and everybody wants to have a backyard
00:33:10.260 and all this.
00:33:11.160 Um, there is a,
00:33:12.140 a sort of a middle ground
00:33:13.420 that's not explored as often.
00:33:15.600 And you'll often hear
00:33:16.620 in the development industry,
00:33:17.580 people talk about the missing middle,
00:33:19.480 right?
00:33:19.920 And so this idea that,
00:33:20.880 uh, in Canada,
00:33:22.040 we tend to think of
00:33:22.780 it's either single family,
00:33:24.280 low rise with a backyard
00:33:25.320 or it's like a,
00:33:26.600 you know, 50 story condo.
00:33:28.140 And, and in reality,
00:33:29.540 in a lot of major cities internationally,
00:33:31.640 there's a middle ground,
00:33:32.480 which is kind of mid-level development,
00:33:35.200 three, four, five floors,
00:33:37.640 but still decent sized units.
00:33:39.280 You're not jamming people
00:33:40.500 into 350 square foot units.
00:33:42.440 Um, and that really does not exist
00:33:44.180 in, in, in size in Canada.
00:33:46.280 And there's a lot of push
00:33:47.320 to bring that in
00:33:48.240 because it's a,
00:33:48.760 it's a sort of a softer density
00:33:50.400 that, that seems to have some appeal,
00:33:52.520 but is, is for whatever reason,
00:33:54.500 not getting a lot of approval
00:33:56.580 in, in, in the cities.
00:33:57.860 I remember living in, uh,
00:34:00.400 Montreal years ago
00:34:01.960 in neighborhood called
00:34:03.180 Notre Dame de Grasse
00:34:04.060 and whole area
00:34:06.940 that I lived in
00:34:07.880 was purpose-built duplexes,
00:34:10.100 um, of the type that I've,
00:34:12.340 I've never seen, uh,
00:34:14.120 in other parts of the country.
00:34:15.380 And it was designed
00:34:17.300 for the owner to live
00:34:19.160 on the, the main floor
00:34:20.740 in the basement
00:34:21.420 and to have room
00:34:23.320 for a tenant upstairs.
00:34:23.860 And to me, this is a great idea
00:34:27.240 that adds density
00:34:28.500 while still giving people
00:34:29.580 that single family home.
00:34:30.880 We don't seem to,
00:34:31.880 to look at those things
00:34:32.840 that, that we had
00:34:33.920 in the, the mid fifties
00:34:35.240 when we were having,
00:34:36.080 last having the giant population boom
00:34:38.160 that like we're having now.
00:34:39.860 No, that's exactly right.
00:34:40.680 That's exactly the type of structure
00:34:42.200 that we're talking about.
00:34:43.040 And, and, and those seem to be,
00:34:45.600 um, I mean,
00:34:46.220 it seems to be a reasonable compromise.
00:34:48.440 Uh, but you,
00:34:49.900 what you find is when you try to
00:34:51.540 put those types of developments
00:34:53.520 in existing single family neighborhoods,
00:34:56.000 you get a lot of pushback
00:34:57.560 and, and the municipalities don't,
00:34:59.880 for whatever reason,
00:35:00.340 don't want to allow it
00:35:01.080 because they don't want to hear
00:35:01.680 their own citizens
00:35:02.500 kind of screaming and crying about it.
00:35:04.560 And that's, again,
00:35:05.900 gets back to this idea
00:35:06.760 that we have a pinch point
00:35:07.700 in the approval process.
00:35:09.480 And we need to think about
00:35:10.880 how we get around that
00:35:12.720 and incentivize municipalities
00:35:13.780 to get on board.
00:35:15.200 Well, maybe, uh, voters
00:35:17.020 will start to realize
00:35:18.120 that they've got to, um,
00:35:20.700 adapt to some of this
00:35:21.800 as they realize their kids
00:35:23.740 and their grandkids
00:35:24.440 won't be able to afford a home
00:35:25.700 the way that they have.
00:35:27.660 Maybe that will be
00:35:28.620 what finally gets us to change.
00:35:30.660 Well, we're getting close
00:35:31.220 to that crisis point,
00:35:32.280 but, but I think it gets back
00:35:33.300 to this idea
00:35:34.280 that if we can clearly delineate,
00:35:36.500 right?
00:35:36.780 So if, if we can get a,
00:35:38.440 a framework in place
00:35:39.600 where we say to,
00:35:41.480 to any developer
00:35:42.340 that wants to bring the supply,
00:35:43.420 if we say,
00:35:43.880 if it fits and conforms
00:35:45.240 within this box,
00:35:46.040 the default from the municipality
00:35:47.860 has to be yes.
00:35:48.800 And if they're going to oppose it,
00:35:49.920 they have to have
00:35:50.500 a really good reason.
00:35:51.460 And the other,
00:35:51.880 the other thing
00:35:52.460 that we find oftentimes
00:35:53.380 that's frustrating,
00:35:54.220 I know for,
00:35:54.720 for people trying
00:35:55.300 to bring this supply
00:35:56.220 is to get you
00:35:57.220 these kind of nuisance lawsuits,
00:35:59.080 right?
00:35:59.220 It costs nothing
00:35:59.860 for a citizen group
00:36:01.040 to throw in
00:36:01.740 all sorts of nuisance lawsuits,
00:36:03.440 add hundreds of thousands
00:36:04.220 of dollars in legals,
00:36:05.700 delay the projects
00:36:06.620 by, by a year or more,
00:36:08.820 tie it up in the municipal board.
00:36:10.080 And, and one policy thought
00:36:12.960 should be that
00:36:13.780 if a citizen group
00:36:16.240 wants to oppose
00:36:17.200 a development
00:36:18.120 that fits within
00:36:19.180 an existing framework
00:36:20.220 for fast approval,
00:36:21.460 then they need to then
00:36:23.500 pony up some form
00:36:25.200 of kind of debenture
00:36:26.900 that is then held
00:36:27.940 by the court.
00:36:28.820 And if they lose that appeal,
00:36:30.360 that money goes
00:36:31.340 to the developer
00:36:31.960 because right now
00:36:32.900 there's nothing
00:36:34.000 that's stopping people
00:36:35.600 from just throwing up
00:36:36.800 constant lawsuits
00:36:38.680 against developers
00:36:39.660 trying to,
00:36:40.320 to bring the supply.
00:36:41.980 And so it's like,
00:36:43.020 it's, it's,
00:36:43.440 it's a free option
00:36:44.200 and we need to,
00:36:46.240 you know,
00:36:46.400 we need to think about
00:36:47.240 how to kind of tilt
00:36:47.940 those balances a little.
00:36:49.640 All right.
00:36:49.880 Well, Ben,
00:36:50.300 it's been a great conversation
00:36:51.500 and hopefully some
00:36:52.260 of the political leaders
00:36:53.640 who can make these changes
00:36:54.620 are listening.
00:36:56.140 Thanks for having me, Brian.
00:36:56.780 Appreciate it.
00:36:57.700 Thanks for the time.
00:36:58.560 All right.
00:36:58.920 Full Comment
00:36:59.380 is a post-media podcast.
00:37:01.100 My name's Brian Lilly,
00:37:01.940 your host.
00:37:02.820 This episode was produced
00:37:03.860 by Andre Pruh
00:37:04.680 with theme music
00:37:05.420 by Bryce Hall.
00:37:06.260 Kevin Libin
00:37:06.760 is the executive producer.
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00:37:19.820 Until next time,
00:37:20.620 I'm Brian Lilly.