Why is it so hard to accelerate housing supply?
Access to affordable housing is a critical issue in Canada. The path to building significantly more housing and making it economically sustainable is far from straightforward. There are enormous macroeconomic and societal forces to overcome; and countless opinions from various industry perspectives about what needs to be done. At Ratio.City, we have a unique view of the early, pre-development processes and the current challenges that city builders face.
I’ve always been fascinated by cities. Through my formal architectural education and practical experience, I’ve observed that city building is a complex process that involves numerous players and decision makers. Various levels of government create policies to govern what can be built and where. Construction is expensive, and capital is required to bring economically feasible projects into reality. The actual built form is determined by the vision of architects, as well as the construction technologies and local labour available.
The flow of information and collaboration between all of these players is what ultimately drives successful city building. Optimizing the exchange of information is going to be critical to accelerating our housing supply.
In our ongoing conversations with government agencies, municipalities, real estate developers, non-profit housing providers, architects and urban planners - we hear the same 4 challenges repeated:
All the easy sites are gone
Finding sites that are both approvable and economically feasible for affordable housing development is a challenge. Real estate developers and non-profits all have their own definition of what makes a site interesting and feasible. Some are partial to specific neighborhoods, others have a mandate for proximity to transit, or walkability; mid-rise builders may focus on defined Avenues, while high rise developers focus on Regeneration Areas. Right now, everyone agrees that the obvious empty parking lot sites have already been developed and finding under-utilized sites requires new strategies and creative deal making.
Uncertainty is expensive
Housing developers find it difficult to predict the time it takes to receive approval from the municipality. There are many Planning policies that impact the built form potential of a site. These policies can range in scale and scope from Provincial, to Regional, to Municipal to the neighbourhood level. Changes to policies sometimes result in inconsistencies which can greatly increase the timeline for municipal entitlements. This leaves housing developers carrying the costs for the land while construction costs continue to rise. This can result in millions of dollars in losses for developers due to approval delays.
Transparency and collaboration isn’t the default
There are various groups of land use professionals involved from both the municipality side and the developer/applicant side. The applicant’s consultant team needs to prepare reports, studies and drawings for submission to the various departments at the municipality responsible for commenting and review.
By the nature of the application requirements, submissions need to be fully designed and resolved which involves significant investment of time and effort. The consultant team uses their professional judgment and best practises based on past experience. But every project is unique and inevitably surprises are uncovered during the process.
The municipal Community Planner is usually at the center of this process and responsible for distributing information to various City departments in a ‘hub and spoke’ model. This process is typically linear and sequential. For complex sites or ambitious projects - issues can get bogged down between conflicting priorities. In a showdown between required street trees and existing underground utilities - who wins?
There is an opportunity to engage with the applicant’s team earlier in the process to identify issues and align high level objectives. Compromise and creative problem solving are easier when there is less investment made. Earlier that issues are identified, the earlier the design can be modified
You can’t change what you don’t measure
There is no easy to access, centralized source of information about the current housing supply pipeline. A housing project needs to go through various processes before final occupancy; from initial entitlements submission, to site specific zoning approvals or appeals, to building permit and through construction and occupancy. Each stage involves different departments and tracking. Progress is reported in annual reports and in aggregate totals but is not connected across the life of an individual project. The resulting lack of transparency about both affordable and market rate housing units makes it hard to evaluate specific policy initiatives and track progress towards the long term goals set out by various levels of government.
Conclusion
Complex problems require innovation and creativity to solve. By understanding the challenges at the earliest stages of pre-development, from finding approvable and economically feasible sites to documenting actual housing outcomes, we are building data and collaboration solutions that accelerate and optimize housing supply.
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