In this episode, Cory talks to Shane Wenzel, the Head of Shayne Homes, about the current housing shortage in Canada and how we can fix it. He talks about what's going on, why it's happening and what we should do about it.
00:04:10.920We'd still be left with a massive housing backlog to catch up on.
00:04:14.660So the next question is going to be, who's going to build all these houses?
00:04:17.960Well, in 2023 in Calgary, there were 30,500 job vacancies.
00:04:22.240That's a lot of jobs, you know, vacant.
00:04:24.600And nearly 7,600 of them were in construction.
00:04:27.360And this trend is the same in every jurisdiction experiencing population growth.
00:04:31.480While activists and politicians ramble about raising minimum wages and finding ways to offer relief to baristas trying to pay off student loans,
00:04:38.800they don't speak up much on the bidding wars that are happening in the construction market for labor right now.
00:04:44.340Young people should be directed where the work is,1.00
00:04:46.820rather than trying to create markets where they don't exist.
00:04:49.600We don't need more liberal arts graduates.
00:14:45.700All right, let's get on to more serious talk,
00:14:47.580and it's something that's been dragging on
00:14:49.020going on in Canada, but in Calgary particularly lately. And that's why I wanted to reach out to
00:14:54.200Shane Wenzel from Shane Holmes, because of course we're talking now in Calgary, it's been a big
00:14:58.800deal for people who are watching from out of province or out of the city. It's been a week
00:15:02.800and some of hearings over blanket rezoning. And they're framing it that the way housing prices
00:15:08.440are going to be brought to affordability is if we just apply zoning, rezoning all the way across
00:15:13.240the entire city in a blanket manner. And a lot of people don't agree with that. And they've been
00:15:17.580speaking up, but it sounds like it's going to go ahead. Anyways, I want to talk to somebody who
00:15:21.260actually builds the things, not a bunch of busybodies on city council who managed to find
00:15:27.760their ways into those seats. I'm not sure how. So welcome back to the show, Shane. I really
00:15:31.920appreciate you coming on to talk to us today. Well, thanks for having me, Corey.
00:15:36.540So I want to start with this zoning. I mean, I've said before, I said when I first messaged you,
00:15:42.360I'm a little mixed though. There's some areas where there could be some room to change some
00:15:45.760rezoning or not. I know you might, you know, maybe people might not be happy if it's their
00:15:49.000house. That's the one next to the new fourplex or things like that. But this whole mess, I mean,
00:15:54.980it's, they're going in a blanket way and they're talking as if it's a panacea.
00:15:59.500Would rezoning change, I guess, your ability to build a lot more homes to try and fill the need
00:16:03.980right now? No, it wouldn't. It wouldn't fill a gap anywhere, Corey. The unfortunate part is,
00:16:10.400Yeah, I'm of your opinion as well as that, you know, the funds have already been accepted by city council.
00:16:16.260So this is just pandering to the to the masses at this point.
00:16:20.680And it's sad. It really is because, you know, they have a process in place already that, you know,
00:16:27.060but the LAP process where they can at least take a look at it area by area and designate zoning around higher traffic or,
00:16:35.260public transit corridors where I think people would be perfectly fine with having that kind
00:16:43.480of density around them. But for some reason, we need to blanket rezone an entire city. And I think
00:16:50.420that just creates nothing but a mess as we're seeing by the number of days it's taking for
00:16:55.720people to get through their panels. Well, yeah, we've never quite seen anything like this. I mean,
00:17:00.820there's always been means and accommodation for people to come into public hearings.
00:17:04.540Our own sin, I guess, as citizens, we rarely go out to anything at City Hall. We don't pay much
00:17:09.340attention to them, but something happened this time. I mean, 800 and some people signed up to
00:17:14.540speak out. I don't think it's all just selfish homeowners, is it?
00:17:19.980No, it isn't selfish homeowners. I mean, again, most people will purchase their home and they
00:17:27.960look at it as their nest egg at the at the end of their career at the end of their life
00:17:32.200and if they can't maintain that I think that's where the large a lot of the largest concern comes
00:17:37.720in but you also have concerns with you know with parking availability traffic in the community and
00:17:44.460and and of course you know short-term rentals is is another bit of the topic as well you know so
00:17:50.840I think people just want to protect the privacy that they have but they want to protect the
00:17:54.440fabric of their neighborhood as much as they can as well. So you're in business and of course the
00:18:00.900housing business, we need more homes. That's something almost everybody agrees on. We need
00:18:05.140more. Sure. How best, I mean, just even in your own business interest, do you want to build them
00:18:10.820as fast and as plentifully, you know, and in a decent quality as possible, but what do you need
00:18:16.460to be able to do that then as quickly and reasonably as possible? Like what's a real
00:18:20.140solution. I know there's no overnight one, but how can we move towards that?
00:18:26.060And that's the unfortunate part, Corey. This is not a short-term fix. This has been building up
00:18:31.000for a number of years, but if I had to start at the top level with the federal government,
00:18:36.860get the hell out of the business. I mean, they've created a tremendous amount of red tape over the
00:18:42.680years, but between all levels of government, and it depends on what municipality you live in,
00:18:49.260I mean, roughly 30% of the cost of a new home is related to the red tape, to the government fees.
00:18:58.660So, I mean, they've got to start abating that and bringing it back in line rather than constantly going to the well.
00:19:05.420But 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.
00:19:14.980But 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?
00:19:25.820I think that's one of the two of the best places to start.
00:19:29.140But, 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.
00:19:42.940Quite honestly, the federal government should just set aside maybe five, six billion a year or for for infrastructure for the municipalities, you know, so they can actually build that and no strings attached.
00:19:56.220Or, 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.
00:20:05.140The municipalities just don't have the funds to keep up with the growth at times.
00:20:09.600yeah i mean it is a challenge even well-meaning municipalities i mean this growth is just changes
00:20:15.600every model and blows it out of the water we've got an advantage in calgary i mean i i've looked
00:20:21.800at that i've gone on about that a lot of times you know there's areas like vancouver you're pretty
00:20:24.880constrained just by being stuck in a valley with an ocean on one side or toronto you're already
00:20:29.600built everything that's within you know uh many many miles of the center but we have room to grow
00:20:34.740out, but instead we're demonizing it. And I look in the United States, you know, the most affordable
00:20:40.140areas, even though they got good economies, you're looking at Houston and Austin, even though they're
00:20:43.540quite progressive or Phoenix, because they're letting people grow outward. I mean, it's not
00:20:49.280the end of the world to build good, decent density, new neighborhoods, is it? No, it's not. But I mean,
00:20:54.780the areas that you described would probably fit the definition of urban sprawl as the zealots like
00:21:00.200to a claim we have here in Calgary, and I've argued that for a number of years. When you build
00:21:05.020one subdivision after another after another, you actually don't have sprawl, especially when
00:21:09.800they're more dense than a lot of the neighborhoods within inner city Calgary. So, you know, if you
00:21:17.280could get the zealots out of the way and they could finally admit that new suburbia actually
00:21:21.800fills a void for affordability, then yeah, you could continue to make a dent in the housing
00:21:29.340shortage that we have here in calgary yeah and i mean that's something there's a bit of a myth i
00:21:35.580mean with a lot of people in uh walden for example i mean way down in south calgary for people who
00:21:41.180don't know it but it's a new district but boy it's hard to find single family dwellings in there
00:21:45.200there's a lot of townhouses there's condos there's duplexes and uh why not but it's a new area it's
00:21:51.440technically sprawl according to the zealots well yeah but uh what what they won't tell you is that
00:21:57.160uh it's uh it's about a 60 60 40 split in favor of single family or in some cases a 50 50 split
00:22:04.420when you go out to new suburbia you know so they're much more dense uh to the point where
00:22:09.040they're on average let's say about 10 units per acre whereas if i went to charleswood in calgary
00:22:15.100that would be about six units per acre so have we not resolved the problem with density targets
00:22:21.700in new savouria yet yeah so let's see though part of the problem as you said we got multiple levels
00:22:28.380of government we got multiple levels of problems uh my opening monologue was actually on how we
00:22:33.220aren't training up people in the trades or or uh you know in just in construction in general
00:22:38.120and uh but that's going to be years to solve even if we work towards it and as you pointed out
00:22:42.660we do have a lot of people who want to immigrate is there room for companies then perhaps to
00:22:49.380work with government and try to target labor coming in to fill the voids you need. That's
00:22:55.820the thing is governments, they try to fill the void for their political sake. You're looking
00:23:00.020more pragmatically. You want to bring in people that can help build these units. Do you think
00:23:04.800there's an appetite for that sort of dialogue? I think there's an appetite for that dialogue
00:23:09.500and hopefully on every level. What would really benefit us, especially in this industry,
00:23:16.380you know a couple of things one if you know federal provincial would would invest in you0.65
00:23:24.000know trade schools and I'm not picking on what we have with with Sate or Nate right now but
00:23:29.120it doesn't take four to five years to to give say accreditation to a drywall or a painter a framer
00:23:36.180or a cider they they need a four or five six month course and that's where a trade school
00:23:41.660can fill that fill a tremendous void and uh and i think that would uh also resolve a problem uh
00:23:47.580with uh with immigration and just giving them their equivalency based on their skill set so
00:23:52.700they're ready to go in canada within months of uh of arriving um i i guess so uh i'll kind of
00:24:00.540bounce around a little you spoke on regulation in vancouver i saw somebody put out a breakdown of a
00:24:05.340condo in vancouver to build it from ground to finish it was just insane i i think it was like
00:24:09.900An $800,000 condo, but it would have like $350,000 in just junk is the way I'm going to put it, junk.
00:25:14.060I 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.
00:25:25.600But, you know, one of the things that's contributing to the problem is the new National Building Code as an example.
00:25:33.340You know, it's like we're policymakers are trying to build a better mousetrap.
00:25:37.380And, 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.
00:25:44.600And maybe that's just an old attitude to have, or maybe it's just a better way of thinking.
00:25:49.300But, 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.
00:26:01.700Now, you want to amortize that over 25 years on a mortgage.
00:26:05.980That's damn near $60,000 that the Canadians are paying out of their pocket just for their home.
00:26:13.720Is it really making them much more energy efficient?
00:26:17.540Or quite honestly, why don't we give people a tax break?
00:26:24.400Give them a $30,000 tax break to renovate their homes.
00:26:27.940You 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, improve the attic insulation in their home.
00:26:39.820And, you know, if we're going after GHG targets in this country, you'd probably resolve that in about two to three years.
00:26:46.380You'd have a tremendous boom in the renovation industry from about $8 billion a year to $15 billion a year.
00:26:53.740I think it's a win-win on everybody's side, but I think that's how you can resolve the energy side of it.
00:26:59.280But God, don't add in another code that adds more to the houses and really resolves nothing.
00:27:06.440Yeah, and that can help with the retrofitting.
00:27:08.480And I mean, some of it on your end, I mean, you're in a competitive industry.
00:27:11.840There's other builders trying to sell homes too.
00:27:13.960And a good selling point to people on a new home is, hey, your electric bill is going to come down by this much or your heating bill.
00:27:20.420I mean, if if builders can build in more efficient or cost effective ways to to have the house, they're going to do it.
00:27:29.940We're already there, Corey. It all comes down to how people live.
00:27:33.240If 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.
00:27:41.920They're going to use less natural gas. The furnace isn't going to be firing as often.
00:27:45.400So it's, you know, it's a great thought, but sometimes, you know, it almost goes too far and we're not resolving anything at this point, in my opinion.
00:41:01.880For one, there's a whole bunch of mountains you're going to have to blast once you get into the Canmore-Ekshaw region to get that track in there.
00:41:08.460The other part is you're going through the Stony Reserve.
00:41:11.600Yes, a great big First Nation you have to get through.1.00
00:41:14.600And it's their land, and they have every right to negotiate the best deal they can.
00:41:18.600And again, if you're familiar with Calgary, we had a ring road that went through the Sutina
00:41:21.860Reserve. It took 40 years to negotiate that. 40 years. It cost billions. And that's just a chunk
00:41:29.440of ring road. How much do you think the Stoney is going to want to have a railroad track doubled
00:41:34.980through their reserve? It ain't going to come cheap. Look, we don't want to rule out other
00:41:39.980areas of transportation. We could talk about extending the LRT in Calgary. It's not a real
00:41:44.600long shot anymore from the northeast to get it to the airport perhaps and people have talked about
00:41:49.900well what about to Cochrane well again it's already moving up that way up Crowchild keep creeping it
00:41:54.480up that way if you've got the demand and eventually you will have train transit going those ways but
00:41:58.660look in Calgary as well we got the green line they're talking about the green line we've been
00:42:02.700talking about for years and they've been ripping up downtown Calgary doing utility working crap on
00:42:07.240it for years and it keeps you know they won't make the budget bigger which is five and some billion
00:42:11.400But what they keep doing is making the Green Line smaller.
00:42:14.340So, I mean, eventually this thing's only going to be one station at the rate they're going.