Shane Wenzel is the head of housing development in Calgary, Alberta and a regular contributor to the Globe and Mail. He talks about the drought, the lack of housing, the housing shortage, and how we can fix it.
00:02:20.980He's written columns for us and some other publications.
00:02:23.980And, of course, he is the head of Shane Homes.
00:02:26.540Again, housing, homes, they're top of the list for items these days on the news and city councils, things like that, especially in Calgary.
00:02:49.840So, I mean, economic times, they've been tough since governments around the world decided to overreact and go bananas over COVID-19 in 2020.
00:02:58.520It's a – they shut down aspects of the economy and they increased government deficit spending.
00:03:07.880Of course, we had supply chain shortages that led to runs on consumer products, while the currency creation of countries around the world shot prices through the roof.
00:03:15.580It's going to take at least a decade before we see stable economic activity again.
00:03:20.640Now, today in Canada, we're suffering from a housing shortage.
00:03:23.400And it wasn't just COVID policies that led to this, that contributed.
00:03:26.500The pandemic was just the final economic straw on an issue that's building for a long time.
00:03:30.740We've had environmental regulations gatekeeping local governments.
00:03:33.760They've been hindering housing starts as they have this obsessive focus on building up rather than out.
00:04:10.980We'd still be left with a massive housing backlog to catch up on.
00:04:14.760So the next question is going to be, who's going to build all these houses?
00:04:18.000Well, in 2023 in Calgary, there were 30,500 job vacancies.
00:04:22.260That's a lot of jobs, you know, vacant.
00:04:24.600And nearly 7,600 of them were in construction.
00:04:26.760And this trend is the same in every jurisdiction experiencing population growth.
00:04:31.800While activists and politicians ramble about raising minimum wages and finding ways to offer relief to baristas trying to pay off student loans,
00:04:38.860they don't speak up much on the bidding wars that are happening in the construction market for labor right now.
00:04:44.420Young people should be directed where the work is, rather than trying to create markets where they don't exist.
00:04:49.660We don't need more liberal arts graduates.
00:05:14.840Kids who underperformed academically, well, they might end up sent to a dreaded vocational school.
00:05:19.700And they were considered objects of pity or shame.
00:05:21.700The young folks who found themselves training for the trades, though, despite the lack of guidance from the educational system, usually did pretty well for themselves.
00:05:29.480Instead of building up a debt of student loans, they went straight to the working world.
00:05:32.520And if they got certified in a trade, well, they were pretty much set.
00:05:35.660How many of you have seen any plumbers in the unemployment line lately?
00:05:38.300Seen any electricians riding the bus to work?
00:05:40.700Heard any carpenters complaining of being underemployed?
00:05:43.680Journeymen in the trades are commanding high wages and good working conditions these days.
00:05:47.600There have been ups and downs in the economy, but they've typically been always working, and they're enjoying the benefits of hyper-demand for their skills today.
00:05:54.460Can the same be said for people holding a degree in interpretive dance or philosophy?
00:05:58.860Usually the only thing you can say to those graduates is, yes, please use skim in my latte. Thank you.
00:06:04.040Even if it isn't in a formal trade, there's many well-paying construction opportunities.
00:06:07.800Heavy equipment operators, framers, drywallers, painters, they're all commanding high wages right now.
00:06:11.940Even entry-level, unskilled construction laborers are being offered over $20 an hour to start in Calgary right now.
00:06:18.780What's the pay scale for a person with a degree specializing in gender studies or intersectional South American poetry these days?
00:06:26.280There's nothing wrong with any other job, for that matter, as well.
00:06:29.840And looking at the listings online, I see janitors, the ones I mentioned earlier, they can make $20 an hour,
00:06:34.400and who's to say they don't move on to develop a cleaning business and make a lot more?
00:06:37.420We've allowed elitism to take over our education system.
00:06:42.260A large number of teachers are embittered liberal arts graduates who entered the field in pursuit of good pay and a pension rather than a love of teaching.
00:06:48.980They still harbor a disdain for the world that forced them to work at Pizza Hut for years before admitting their tribal music degree wasn't going to pay their bills.
00:06:57.100While the students who went into the trades or went to the oil field, of course, were buying big trucks in their first homes.
00:07:00.880They passed that attitude down to the students as they stigmatized non-academic career paths.
00:07:05.820Even if unconsciously, Canada's education system has failed to create the skilled people we need for today's demands, and we're all paying the price for that now.
00:07:14.660It'll take years before the students of today are ready to take on the labor needs of tomorrow, but there's no better time than now to start changing our paths.
00:07:21.360AI, that's the big game changer, and it's going to be eliminating a lot of jobs.
00:07:24.960It's foolish to direct students into fields vulnerable to AI replacement.
00:07:27.960But it's going to be a long time before a robot's able to unplug your toilet, especially after Taco Tuesday, or wire a new lighting system into your house, or change the shingles.
00:07:37.920Let's start preparing kids for career futures that are going to be in demand.
00:07:41.040And that means dropping the stigma applied to non-academic paths, and in particular, in construction and trades.
00:08:14.660Living in the foothills, there's a downside.
00:08:16.840Even that close to Calgary, we get a hell of a lot more snow out there.
00:08:20.920So the bees are going to be crabby and buried for a week or so.
00:08:24.000Yeah, it was blizzarding down here a little while ago, but it seems to have stopped.
00:08:27.840Hey, you know the big news this week was the announcement by Premier Smith on the sort of look-see into high-speed rail and other stuff in the province.
00:08:39.600Just reading your tweets, Corey, I'm not quite sure.
00:08:41.840I couldn't quite get where you stand on the situation.
00:08:57.600We don't have the population to support it, that's for sure.
00:09:01.200But anyways, on to the news because it's a busy day and I've got more stuff coming up.
00:09:06.420Right now, the website is being led off with an utterly brilliant, brilliant column.
00:09:11.080I must say it's one of the best Nigel section has presented in a while on time to give permanent residents the right to vote.
00:09:21.840City Council in Calgary last night approved a motion by 9 to 6 that they were going to look at advocating getting permanent residents the right to vote.
00:09:31.080And I say that's a very good idea, even though, of course, you were against it, Corey, as you are.
00:09:40.840National debt ceiling, we found out today, is now being raised to $2.1 trillion by our finance minister, Freeland.
00:09:49.120That is an awful lot of zeros, as you can see there.
00:09:53.200But it was a historic day today, Corey, and finally the Trans Mountain Pipeline expansion is open and flowing.
00:10:01.720We've got our own Paul Forseth with a column on how it wasn't really Trudeau's success, despite the fact I'm sure he'll probably claim it.
00:10:11.700And we've got our energy reporter, Sean Polzer, sort of looking at the ins and outs of how it finally came to be
00:10:20.220and finally got final approval by the Canadian energy regulator last night.
00:10:26.420Corey, I've got a story just about to publish that I know is going to anger you.
00:10:30.180Edmonton NDP MP Heather McPherson has introduced a private member's bill in the House of Commons
00:10:37.480that will block Alberta leaving the Canadian pension plan.
00:10:41.560So that's going to anger a lot of our readers too, Corey, because I think there's some support for it out there.
00:10:50.020Well, hopefully it angers a lot of Edmonton voters, and this will be her last bloody term, and we'll wait and see.
00:10:56.740The Trans Mountain, though, did Sean also cover?
00:10:59.540Because I saw, I put myself through watching the NDP leadership debate in Alberta last week,
00:11:04.440and our blessed Naheed Nenshi, the savior of the NDP, he took credit for getting the Trans Mountain built.
00:11:11.720I don't know if he's been getting that credit elsewhere, but he actually said that during the debate.
00:11:16.040I don't know if Sean caught that part or not.
00:11:18.120Well, you know, Sean is an energy expert, and he's also a pipeline expert, but in his story today, there is no mention of Naheed Nenshi.
00:11:26.960So I will remonstrate with him for missing that key fact.
00:11:31.640Okay, well, we'll look further into it.
00:11:33.540I'm sure Mr. Nenshi's fingerprints are somewhere in that thing.
00:14:45.280All right, let's get on to more serious talk, and it's something that's been dragging on and going on, well, in Canada, but in Calgary particularly lately, and that's why I wanted to reach out to Shane Wenzel from Shane Holmes, because, of course, we're talking now in Calgary.
00:14:58.380It's been a big deal for people who are watching from out of province or out of the city.
00:15:01.500It's been a week and some of hearings over blanket rezoning, and they're framing it that the way housing prices are going to be brought to affordability is if we just apply zoning, rezoning all the way across the entire city in a blanket manner.
00:15:15.060And a lot of people don't agree with that, and they've been speaking up, but it sounds like it's going to go ahead.
00:15:19.780Anyways, I want to talk to somebody who actually builds the things, not a bunch of busybodies on city council who managed to find their ways into those seats.
00:15:39.560I mean, I've said before, I said when I first messaged you, I'm a little mixed, though.
00:15:43.260There's some areas where there could be some room to change some zoning or not.
00:15:46.720I know you might, you know, maybe people might not be happy if it's their house that's the one next to the new fourplex or things like that.
00:15:52.400But this whole mess, I mean, they're going in a blanket way, and they're talking as if it's a panacea.
00:15:59.620Would rezoning change, I guess, your ability to build a lot more homes to try and fill the need right now?
00:16:21.500It really is because, you know, they have a process in place already that, you know, with the LAP process where they can at least take a look at it area by area
00:16:31.820and designate zoning around higher traffic or, you know, public transit corridors where I think people would be perfectly fine with having that kind of density around them.
00:16:45.300But, you know, for some reason, we need to blanket rezone an entire city.
00:16:50.020And I think that just creates nothing but a mess, as we're seeing by the number of days it's taking for people to get through their panels.
00:16:58.440Well, yeah, we've never quite seen anything like this.
00:17:00.740I mean, there's always been means and accommodation for people to come into public hearings.
00:17:04.620Our own sin, I guess, as citizens, we rarely go out to anything at City Hall.
00:17:22.600Yeah, I mean, again, most people will purchase their home and they look at it as their nest egg at the end of their career, at the end of their life.
00:17:32.260And if they can't maintain that, I think that's where a lot of the largest concern comes in.
00:17:38.040But you also have concerns with, you know, with parking availability, traffic in the community and, of course, you know, short-term rentals is another bit of the topic as well.
00:17:50.540You know, so I think people just want to protect the privacy that they have, but they want to protect the fabric of their neighborhood as much as they can as well.
00:17:58.000So you're in business and, of course, the housing business.
00:18:06.320How best, I mean, just even in your own business interest, do you want to build them as fast and as plentifully, you know, and a decent quality as possible?
00:18:15.160But what do you need to be able to do that then as quickly and reasonably as possible?
00:18:29.120This has been building up for a number of years, but, you know, if I had to start at the top level with the federal government, get the hell out of the business.
00:18:39.100You know, I mean, they've created a tremendous amount of red tape over the years, but, you know, between all levels of government, you know, and it depends on what municipality you live in.
00:18:49.300I mean, roughly 30% of the cost of a new home is related to the red tape, to the government fees.
00:18:58.100So, I mean, they've got to start abating that and bringing it back in line rather than constantly going to the well.
00:19:05.460But I think you also have to freeze immigration for a year or two and reset it back to normal levels because it's unsustainable the way it is right now.
00:19:15.160But at the same time, you know, why can we not focus on bringing in skilled trades or professional services as part of our immigration plan?
00:19:24.720I think that's one of the two of the best places to start.
00:19:29.180But, you know, again, continuing on with the federal level, when we talk about infrastructure funds, which is tied back to, you know, everybody's favorite topic lately of the blanket rezoning in Calgary, stop it.
00:19:43.440Quite honestly, the federal government should just set aside maybe five, six billion a year or for infrastructure for the municipalities, you know, so they can actually build that.
00:19:54.720And no strings attached or, you know, the simpler way is leave the municipalities with one or two percent more of the taxes that they collect, because this is where the problem's coming in.
00:20:05.180The municipalities just don't have the funds to keep up with the growth at times.
00:20:10.740Yeah, I mean, it is a challenge, even well-meaning municipalities.
00:20:13.780I mean, this growth just changes every model and blows it out of the water.
00:20:22.220I've gone on about that a lot of times.
00:20:23.560You know, there's areas like Vancouver, you're pretty constrained just by being stuck in a valley with an ocean on one side or Toronto, you're already built everything that's within, you know, many, many miles of the center.
00:20:33.620But we have room to grow out, but instead we're demonizing it.
00:20:36.960And I look in the United States, you know, the most affordable areas, even though they got good economies, you're looking at Houston and Austin, even though they're quite progressive or Phoenix, because they're letting people grow outward.
00:20:47.920I mean, it's not the end of the world to build good, decent density, new neighborhoods, is it?
00:20:54.440But I mean, the areas that you described would probably fit the definition of urban sprawl, as the zealots like to claim we have here in Calgary.
00:21:02.220And I've argued that for a number of years.
00:21:04.500When you build one subdivision after another, after another, you actually don't have sprawl, especially when they're more dense than a lot of the neighborhoods within inner city Calgary.
00:21:15.160So, you know, if you could get the zealots out of the way and they could finally admit that, you know, new suburbia actually fills a void for affordability, then, yeah, you could continue to make a dent in the housing shortage that we have here in Calgary.
00:21:31.060Yeah, and I mean, that's something there's a bit of a myth, I mean, with a lot of people in Walden, for example, I mean, way down in South Calgary, for people who don't know it, but it's a new district.
00:21:42.620But boy, it's hard to find single family dwellings in there.
00:21:45.280There's a lot of townhouses, there's condos, there's duplexes, and why not?
00:21:51.140It's technically sprawl, according to the zealots.
00:21:53.300Well, yeah, but what they won't tell you is that it's about a 60-40 split in favor of single family, or in some cases, a 50-50 split when you go out to new suburbia.
00:22:06.520You know, so they're much more dense to the point where they're, on average, let's say about 10 units per acre, whereas if I went to Charles Wood in Calgary, that would be about six units per acre.
00:22:18.400So have we not resolved the problem with density targets in new suburbia yet?
00:22:26.520Part of the problem, as you said, we've got multiple levels of government, we've got multiple levels of problems.
00:22:31.240My opening monologue was actually on how we aren't training up people in the trades or, you know, just in construction in general.
00:22:38.940But that's going to be years to solve, even if we work towards it.
00:22:41.980And as you pointed out, we do have a lot of people who want to immigrate.
00:22:45.900Like, is there room for companies then, perhaps, to work with government and try to target labor coming in to fill the voids you need?
00:22:55.440Like, that's the thing is governments, they try to fill the void for their political sake.
00:22:59.100Like, you're looking more pragmatically.
00:23:01.420You want to bring in people that can help build these units.
00:23:04.280Do you think there's an appetite for that sort of dialogue?
00:23:07.380I think there's an appetite for that dialogue, and hopefully on every level.
00:23:11.400So, you know, what would really benefit us, especially in this industry, you know, a couple of things.
00:23:19.100One, if, you know, federal, provincial would invest in, you know, trade schools.
00:23:25.520And I'm not picking on what we have with SAIT or NAIT right now, but it doesn't take four to five years to give, say, accreditation to a drywall or a painter or a framer or a sider.
00:23:37.620They need a four-, five-, six-month course, and that's where a trade school can fill a tremendous void.
00:23:44.500And I think that would also resolve a problem with immigration and just giving them their equivalency based on their skill set so they're ready to go in Canada within months of arriving.
00:23:58.600I guess so I'll kind of bounce around a little.
00:24:44.580I mean, if we go back 30, 40 years, we didn't have those in place then and we were still building houses that didn't catch fire or fall to the ground.
00:24:53.980So, I think the problem is, Corey, is, you know, it's that thought or at least that attitude that, you know, it's only $1,000.
00:25:03.720Well, you keep adding on $1,000 over 40 years before you know it, you're up $40,000 on the units when you buy them.
00:25:14.100I don't think a lot of those regulations need to be as stringent or they need to be as high as they are right now because they've also contributed to where we are today.
00:25:25.820But, you know, one of the things that's contributing to the problem is the new national building code as an example.
00:25:33.380You know, it's like policymakers are trying to build a better mousetrap.
00:25:36.560And, you know, I think you can reach a plateau where, you know, it's good enough for a while and you don't have to touch it.
00:25:44.700And maybe that's just an old attitude to have or maybe it's just a better way of thinking.
00:25:49.340But, you know, when I take a look at the national energy code and it's pushing us towards net zero in new homes, from where we are today, that would be another $30,000 attached to the sale price of a home.
00:26:01.820Now, you want to amortize that over 25 years on a mortgage.
00:26:06.040That's damn near $60,000 that the Canadians are paying out of their pocket just for their home.
00:26:13.860Is it really making them much more energy efficient?
00:26:17.600Or, quite honestly, why don't we give people a, you know, a tax break?
00:26:24.280You know, give them a $30,000 tax break to renovate their homes.
00:26:28.600You know, get rid of that old mid-efficient furnace that's not that mid-efficient anymore, that old hot water tank, those old single-pane windows.
00:26:35.920Improve the attic insulation in their home.
00:26:39.940And, you know, if we're going after GHG targets in this country, you'd probably resolve that in about two to three years.
00:26:46.260You'd have a tremendous boom in the renovation industry from about $8 billion a year to $15 billion a year.
00:26:53.880I think it's a win-win on everybody's side.
00:26:56.240But I think that's how you can resolve the energy side of it.
00:26:59.260But, God, don't add in another code that adds more to the houses and really resolves nothing.
00:27:06.720Yeah, and that can help with the retrofitting.
00:27:33.080If someone wants their temperature up at 19 degrees in their home every day, it's probably going to be more efficient than somebody who has it up at 22 degrees every day.
00:27:42.140They're going to use less natural gas.
00:27:43.720The furnace isn't going to be firing as often.
00:27:45.440So, it's, you know, it's a great thought.
00:27:50.400But sometimes, you know, it almost goes too far.
00:27:52.580And we're not resolving anything at this point, in my opinion.
00:42:20.360We've got to remember the world's changing, too.
00:42:22.240Part of the problem with the Green Line, people don't work downtown like they used to.
00:42:25.300The office buildings in Calgary are still nearly empty all over the place.
00:42:28.760We've got 30% vacancy going on down here.
00:42:30.820We've got another boondoggle going on that showed with Gondek a little while ago where they were converting an old office building into residential units.
00:42:40.740And it turns out that the contractors aren't getting paid now.
00:46:07.320You're supposed to be here for small government, not building giant infrastructure, boondoggle white elephants, which is what a high-speed rail will be.