Western Standard - Reducing barriers to affordable housing.

00:00:00.000 So thanks for joining us today, Shane.

00:00:01.860 Thanks for having me, Corey.

00:00:03.780 I really appreciate it.

00:00:05.500 I can't remember exactly what the tweet was.

00:00:07.820 It was something that got you quite stirred up a little while back with housing

00:00:11.420 because, I mean, people are pointing fingers all over the place,

00:00:14.960 but they won't address the real issues of why we can't get enough housing built

00:00:18.880 to keep up with demand.

00:00:19.800 Can you kind of expand to start this off?

00:00:22.520 Well, yeah, I think what really ticked me off on the original tweet that I'd made

00:00:26.640 was just the Housing and Affordability Task Force.

00:00:30.620 And I guess why it frustrated me, Corey, is that, you know,

00:00:33.420 here we had a bunch of city experts and other experts get together,

00:00:37.320 but the only expert missing from around the table was the housing

00:00:41.460 and development industry and what we could do to support the goal.

00:00:47.960 Yeah, well, I mean, it just, well, again, looking,

00:00:51.420 we're just going to frustrate ourselves when we try to look for common sense

00:00:53.840 in the realm of government and committees and task forces.

00:00:56.580 But all the same, we should still call it out when, boy, you know,

00:00:59.540 if it was a medical thing, they would have doctors involved in it.

00:01:02.260 If it was an energy thing, presumably they would have energy producers

00:01:05.700 at least contributing.

00:01:07.360 If you're looking to build more houses,

00:01:08.980 why don't you have the developers and home builders giving some input on it?

00:01:12.580 Well, it just seemed to be common sense in my mind,

00:01:15.380 and I think in yours as well and a lot of people's.

00:01:17.700 But, you know, when I look at the task force,

00:01:19.820 I guess where the biggest frustration came in is it was really addressing the social issue

00:01:24.920 and subsidized housing more than it was, you know, affordable market housing

00:01:30.080 and trying to get through the boom that we're going through in Alberta right now,

00:01:34.220 being such a popular province to move to.

00:01:37.260 Well, that's it.

00:01:38.000 We've got a great interprovincial and immigration coming into Alberta.

00:01:42.780 I mean, there's a great future.

00:01:44.160 It's a great place to move, but we aren't keeping up with that demand.

00:01:47.400 And these task forces, as you said, they talk about subsidized housing,

00:01:50.980 things like that, but often they dodge.

00:01:52.280 The reality is we need supply.

00:01:53.840 It doesn't matter how much you subsidize.

00:01:55.560 If there are not enough houses, you've got a problem.

00:01:58.900 Yes.

00:01:59.340 Well, and that's what we're experiencing right now.

00:02:01.300 I mean, not only do we have, you know, supply chain issues,

00:02:04.080 we're still managing a bit of that.

00:02:05.900 You know, we're dealing with labor issues as well.

00:02:08.680 You know, the quick estimate off the top of my head would be that in this province,

00:02:13.000 we need about 90,000 to 100,000 homes built, and we have the capacity for about 36,000 in total.

00:02:21.260 You know, that's a far cry from where we need to be to handle the onslaught that we're dealing with.

00:02:26.400 And, you know, we're welcome that.

00:02:27.620 You know, we're obviously happy to have it, I should say,

00:02:30.340 but, you know, not at the expense of people not being able to take their homes

00:02:34.960 or not being able to afford their homes.

00:02:36.780 And that all comes down to supply.

00:02:39.820 So there's two hindrances.

00:02:41.540 You know, we've talked about that when you've been on the show before.

00:02:44.660 I'll start with the one that was regulatory.

00:02:46.900 Now, I mean, again, when you get discussions with people,

00:02:49.180 oh, well, we've got to regulate to keep homes safe and have a standard

00:02:52.620 or a certain environmental standard.

00:02:55.020 But sometimes, I mean, there's just too much.

00:02:58.360 Where can we reduce some regulations to make it easier for you guys to keep up and keep building?

00:03:02.940 Well, I mean, obviously, you know, simple economics, supply and demand.

00:03:08.380 I mean, we're quelling the supply based on an ideology that is just kind of foreign to me.

00:03:15.340 And, you know, to drop that red tape associated with that ideology would be the first best place to start.

00:03:22.580 You know, we've taken what I like to say is a relatively simple concept of building a house

00:03:27.520 and building an energy-efficient home, and we've turned it into something just completely complex

00:03:32.960 to the point where it takes anywhere, you know, depending on the company.

00:03:37.780 I mean, it could take anywhere from 60 to 150 days longer just to build.

00:03:43.460 I mean, that just seems ridiculous for, you know, when you're trying to supply housing to people

00:03:47.900 and in an affordable fashion.

00:03:50.460 Well, yeah, and that was something we talked about before.

00:03:52.300 I think it was something along the lines of seven years from concept to construction,

00:03:56.160 assuming every hoop has been jumped through, every license has been found,

00:04:00.700 and every application has been approved.

00:04:02.620 Anywhere along the way, that could get shut down.

00:04:05.120 I mean, there's millions and millions of dollars spent before you're even seeing a foundation

00:04:08.820 starting to be poured, and that all comes down to the cost of the house in the end.

00:04:13.120 Well, sure it does, and, you know, it's the end user that bears the cost.

00:04:17.040 You know, there's this perception that it's the developer, the builder, that's absorbing it.

00:04:21.520 Well, you can't absorb it at the end of the day when you're used to, you know, purchasing land

00:04:26.060 and you're in the ground within a couple of years.

00:04:28.860 Seven years is a tremendously long time, and that just seems to be the norm,

00:04:32.580 and it's getting longer, it seems, every day.

00:04:35.980 You know, so everybody's trying their hardest, and, you know, you just kind of long for the days

00:04:39.820 when you had a strong partnership with planning and the City of Calgary,

00:04:44.260 and that just seems to have imploded over the last 12 years.

00:04:48.460 So I see one of the commenters saying when we say homes doing apartments or houses or both,

00:04:54.280 I mean, I imagine when I say home, I mean both.

00:04:56.660 I mean, it's all somewhere where somebody can be housed, and then there's demand for each.

00:05:01.720 Are condos facing the same sort of hindrances in trying to get zoned and built as houses are?

00:05:07.960 Sure they are.

00:05:08.920 You know, and I think that's, you know, it's one of the many challenges because, of course,

00:05:12.080 it takes longer to build, but you can put a tremendous amount of units out there

00:05:16.360 when you look at some of the high-rises in downtown Calgary,

00:05:19.320 but when you look at a lot of the four- and five-storey apartment buildings out in New Suburbia.

00:05:25.860 You know, it takes at least a couple of years just to get the approvals in place,

00:05:30.580 and by then you may have missed the market, but in this case you could probably build it now,

00:05:35.020 when people will just generally come, but, you know, why such a holdup when, you know,

00:05:40.500 you've taken care of everything that's written in black and white, you know,

00:05:45.060 why are we dealing with, you know, a file manager who wants to put their own personal touch on it?

00:05:49.540 I'm just kind of baffled by all of that.

00:05:52.260 Yeah, well, so that was an interesting comment, and then Don Sharp was a commenter as well,

00:05:56.400 saying, you know, what's the best way to streamline some of these issues with the paperwork,

00:05:59.380 inspection, and regulation, you know, delays?

00:06:02.320 So you're saying sometimes it is a person just kind of wants to make their own little unique footprint,

00:06:07.480 I guess, on a project?

00:06:09.020 You know, in some cases, Corey, that's what's happening.

00:06:11.600 In some cases, you need parks to agree with roads, to agree with the fire department on certain things,

00:06:17.740 and you can understand that they, you know, they want to dot their I's and cross their T's, rather.

00:06:23.360 But, you know, I mean, ultimately what we're trying to do is we're trying to provide housing,

00:06:27.980 and the longer it takes, the more expensive it gets,

00:06:30.560 because every day costs you more and more and more.

00:06:34.940 That's it.

00:06:35.500 I mean, we could just, you know, flick a switch and bring more labor in overnight, 0.87

00:06:38.600 or there's a lot of challenges.

00:06:40.080 We still have a lot of long game.

00:06:41.220 But some of these regulatory things, we should be able to, if the will was there,

00:06:44.940 be able to change those pretty quickly.

00:06:47.120 But you mentioned ideology as well, and it's not unique to Calgary.

00:06:50.760 There seems to be a lot of municipal governments that have a fixation on urban density

00:06:55.400 and fighting outward growth of the cities, and that, you know, makes things problematic as well.

00:07:01.400 I mean, inner city infills are beautiful, but they aren't cheap,

00:07:04.060 and we need stuff a little faster and a little wider if we're really going to meet that need.

00:07:09.500 Well, and that's really it, Corey.

00:07:11.240 That's the challenge with the ideology is that, you know, it maybe works in theory,

00:07:15.920 but, you know, this isn't Europe.

00:07:18.540 You know, we're not building up as much as we are building out.

00:07:22.480 And when you take a look at a lot of the new suburban subdivisions, quite honestly,

00:07:26.880 they're more dense than even some of the inner city neighborhoods.

00:07:31.580 So, I mean, you've seen a tremendous shift over the last short while driven by the consumer.

00:07:37.240 And, I mean, really, isn't that what we're doing it for?

00:07:39.740 We're trying to build homes for people, and we're trying to allow them the choice

00:07:43.760 rather than pigeonholing them inside an ideology.

00:07:47.360 Because if they don't build here in Calgary, if, you know, a smaller center like Airdrie or Okotoks or Chestermere

00:07:53.920 are prepared to accept that, then they go there.

00:07:57.760 Which actually leads to less density and all those things that they were ideologically opposed to in the first place.

00:08:03.260 I mean, they're trying to save the world and reduce emissions.

00:08:05.260 Well, we have people commuting a longer distance to get to work

00:08:08.000 because they've been ironically driven out of the city environment for affordability reasons.

00:08:12.620 Sure, they do.

00:08:14.280 And that's ultimately what you're going to start to see happen, I think, is, you know,

00:08:18.420 if the city of Calgary is going to be more of a challenge, you know,

00:08:22.560 a lot of these smaller centers are prepared to take that tax base,

00:08:25.600 and they'll still be working in Calgary.

00:08:27.900 And you're not going to see the taxes from them.

00:08:30.220 Well, we're seeing that in Calgary, for example, with the industrial, for sure.

00:08:33.500 If you go north of the city into the Rocky View, holy cow, are they putting up warehouses

00:08:37.180 and light manufacturing and all sorts of things?

00:08:39.600 And it's no coincidence that it's just north of the city line.

00:08:43.860 The city's not winning when they're trying these battles.

00:08:46.740 No, they're not.

00:08:47.560 And they're losing out on about another 1,000 acres of that, too.

00:08:51.620 So, I mean, again, it gets back to the solutions.

00:08:53.960 As you said, I mean, we've got multiple levels of government.

00:08:56.060 That's part of the problem, too.

00:08:57.240 And they aren't necessarily getting along.

00:08:59.220 I think the federal government, I saw some signaling.

00:09:01.440 I mean, they're trying the carrot approach with some of the municipal governments saying

00:09:04.580 they'd have transfers if municipal governments could come up with ways to expand their housing

00:09:08.920 supply.

00:09:09.660 But if you aren't directing that money directly, it could, of course, just fall into that

00:09:13.700 municipal pot, and they still could hinder outward growth of housing, I guess.

00:09:18.440 Well, that's exactly what you're seeing happening, Corey.

00:09:21.100 And I think that's, again, kind of circling back to the housing affordability task force.

00:09:26.780 Rather, you know, the focus has been on, you know, social or subsidized housing, because

00:09:33.060 now we've created a problem.

00:09:35.300 We've created, you know, a pricing problem and an affordability problem.

00:09:39.880 You know, and that seems to be where a lot of that's getting directed.

00:09:43.080 And, you know, good on them for taking on that issue.

00:09:46.000 But, you know, the biggest challenge past that is, you know, we're already constrained

00:09:50.060 with labor.

00:09:50.660 So how are you going to build it?

00:09:52.040 You've come up with this great plan, but how are you going to build it more importantly?

00:09:56.780 Yeah, I mean, subsidized, socialized housing, and then when you pour money into that, when

00:10:01.840 you have the labor crunch, well, then you're actually just going to put the prices of things

00:10:05.620 up even higher because you're pulling the labor and supplies into another area.

00:10:09.960 It turns into a self-feeding monster.

00:10:12.540 Another issue we've got, and it's not just the people at the level of needing subsidized

00:10:16.580 or socialized housing, but people are in, if they've recently bought into an existing

00:10:20.660 home and they came in tightly on the financing, the interest rates have been going up.

00:10:26.480 And suddenly they're finding themselves very, very crunched right now and making that mortgage

00:10:29.720 payment.

00:10:30.680 And that's the new challenge that we have.

00:10:34.120 And we faced that last month where we had 10 homeowners who couldn't take their homes

00:10:38.140 because they no longer qualified with the increase in the rates.

00:10:42.780 And, of course, now they're re-qualifying under the CMHC stress test, rather.

00:10:48.660 And that just adds another two and a half, two and three quarter points onto what they

00:10:53.840 have to qualify for.

00:10:55.000 So they no longer qualify for a home.

00:10:56.940 So they were that close to achieving their dream.

00:11:00.420 And now that's gone for now.

00:11:03.220 And it's got to be heartbreaking.

00:11:04.700 I mean, we know now it is so hard to get into the housing market and getting going, saving

00:11:09.560 that money, getting the good credit, tightening the belts.

00:11:12.400 And then, as you said, getting that close and suddenly, and I'm sorry, it might take

00:11:16.820 you a couple more years, if ever, because the cost has just shot up yet again.

00:11:21.180 Yes.

00:11:21.700 Yes.

00:11:22.040 So, I mean, you know, eliminating that stress test would be the first best thing.

00:11:25.500 And I know that I have a number of people who would argue with me on that.

00:11:29.000 But I just don't think that's a qualification that really needs to be in place anymore.

00:11:32.900 I think, you know, if the federal government follows through on their promise that they're

00:11:36.920 not going to continually jack up rates, which they seem to have failed at to this point,

00:11:41.800 you know, then we wouldn't have these same issues.

00:11:44.900 You know, it also works both ways.

00:11:46.760 When you continually increase rates, I mean, that just puts fear in people, fear that they're

00:11:51.420 never going to be able to get in.

00:11:52.540 They're never going to be able to achieve that dream.

00:11:54.280 And that's creating, you know, that mass rush as well.

00:11:57.820 Well, yeah, you might reevaluate your decision as well.

00:12:00.280 I mean, oh, wow, I'm qualified now, but we're here.

00:12:02.540 We're one paycheck away from bankruptcy.

00:12:04.200 If we go, if we dive in right now, maybe we'll wait and they'll hold back.

00:12:08.600 But I mean, it doesn't get easier for waiting, unfortunately.

00:12:12.440 So have you, has your industry or India's industry associations at least been reaching out to

00:12:18.220 the government saying, hey, hey, you know, talk to us, we can work on this.

00:12:21.740 Like, has there been an effort to try and at least get them to realize that they're missing

00:12:25.380 out on an important perspective?

00:12:26.540 There are literally daily and weekly conversations with every level of government possible.

00:12:34.160 You know, the HBAs, the home building associations rather, across the entire country, even at

00:12:38.800 the federal level, have spent a lot of time with their counterparts in government having

00:12:43.460 these discussions on how to make things more affordable.

00:12:46.420 Now, whether or not they take the recommendations, I mean, that's totally up to the minister and

00:12:51.620 their departments.

00:12:52.220 Well, if they didn't invite your input in the first place, it doesn't sound like they're

00:12:57.060 eager to hear it, unfortunately.

00:12:59.600 I think they're eager to hear it.

00:13:01.680 But I guess where the challenge comes in, Corey, is that it should have been right up

00:13:05.920 front with the strategy.

00:13:07.200 It shouldn't be, you know, here, we've come with a strategy.

00:13:10.100 Now you guys figure out how to make it work.

00:13:12.380 Yeah.

00:13:12.600 And that's where I really get frustrated is we should have been involved right up front.

00:13:16.200 And it's disappointing that we weren't.

00:13:17.660 So just to kind of finish up, I mean, one of the big hindrances, and I don't know if

00:13:22.240 you have an answer for it, is our labor shortage, though.

00:13:24.620 I mean, if we streamline things, we get them faster.

00:13:26.860 We got some new areas zoned for it.

00:13:28.880 Fantastic.

00:13:29.680 Ready to go.

00:13:30.940 What can we do, though, to get more boots on the ground to help build these?

00:13:34.700 I mean, that's a real bottleneck, no matter what the regulations are.

00:13:37.520 Well, that's really going to come down to your immigration policies and the kind of

00:13:42.120 people that you're bringing in and the skill set that they have.

00:13:44.980 I mean, we know where we have the gaps, you know, when our industry is prepared to share

00:13:49.000 that information, and they have with their provincial and federal counterparts.

00:13:52.980 But, you know, it's getting the attention of the immigration ministers and ensuring that,

00:14:00.240 you know, we are working towards bringing this skill set into Canada and across the country.

00:14:05.600 Yeah, which is a much bigger and complicated, you know, discussion.

00:14:11.060 But, I mean, targeting skilled immigrants, whether from carpenters to even just labor.

00:14:17.900 But, I mean, it's important.

00:14:19.240 I mean, that's one of the things where we can fulfill one of the things.

00:14:21.040 We're bringing the immigrants in, and they're helping build the homes that they're going to

00:14:23.420 need when they get here.

00:14:24.820 Exactly.

00:14:25.380 And, I mean, that's an immediate solution.

00:14:27.360 And a long-term solution is you do have to get young kids and what have you in the trades.

00:14:32.640 What you're seeing or what you're experiencing now is you are experiencing retirements.

00:14:38.320 You know, you've got trades that are longer in the tooth, and they're 65, 70 years old,

00:14:43.500 and they're saying, that's enough.

00:14:44.800 I'm calling it a day.

00:14:45.700 It's time to enjoy my golden years.

00:14:48.120 So, you do need kids in the trades.

00:14:50.380 And, to be honest, I couldn't think of any generation that has a greater opportunity for

00:14:56.920 a career than they do now in the trades.

00:14:59.520 Oh, very good point.

00:15:01.640 I mean, it would take a couple to a few years to get those kids through those programs.

00:15:05.220 But, boy, it would pay off for them and us when we get that big influx of trained people

00:15:09.620 in the market.

00:15:10.860 You bet.

00:15:11.140 Well, we'll just have to keep reaching out, keep pressuring government.

00:15:15.800 I mean, there's been a recent cabinet shuffle.

00:15:17.200 Maybe they're receptive to some new ideas in there and listening.

00:15:22.080 Because, I mean, it's as frustrated as we get with the Liberal government.

00:15:25.160 I'm sure they would love, though, to have this housing problem off their back.

00:15:29.280 So, I mean, they've got to be somewhat receptive to some good thoughts now and then.

00:15:33.200 With any luck, a hope and a prayer.

00:15:35.260 Hope and a prayer.

00:15:36.160 Well, we'll keep the discussions going.

00:15:37.680 Thanks for calling them out online and coming on the show to discuss that with us, though.

00:15:41.760 Because, you know, a lot of people kind of scratch their heads.

00:15:43.920 Well, we need them.

00:15:44.680 Why aren't we getting the houses?

00:15:45.900 Well, you know, there's a lot of reasons.

00:15:47.960 And there's some solutions if the government would start considering them.

00:15:51.420 So, I appreciate that.

00:15:52.960 Where can people see you online and where you're speaking and such, Shane?

00:15:57.260 Oh, pretty simple.

00:15:58.380 Just at Shane Wenzel.

00:15:59.500 Just go on any platform.

00:16:00.720 You're going to find me there.

00:16:02.540 All right.

00:16:03.140 Well, thanks again for coming on, Shane.

00:16:05.220 It's always a good conversation when you come on.

00:16:08.160 And one of these days, we'll get it all solved.

00:16:10.700 I can only hope, Corey.

00:16:13.100 Thanks again.

00:16:14.100 And take care.

00:16:14.740 You can become a Western Standard member for just $10 a month.

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Western Standard - July 28, 2023

Reducing barriers to affordable housing.

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