August 5, 2025 • 49 mins
Tonight on The Brian Crombie Hour, Brian interviews Chris Spoke. Chris is a leading voice in Toronto’s housing debate and a passionate advocate for midrise development as a solution to the city's growing affordability crisis. As the founder of August, a firm focused on digital solutions for real estate and urban planning, he combines innovation with a deep understanding of policy and design. Chris champions midrise buildings—typically 4 to 8 storeys—as the missing middle housing Toronto desperately needs. These buildings offer a gentle density that fits seamlessly into existing neighbourhoods while increasing housing supply in walkable, transit-connected areas.
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Episode Transcript
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Speaker 1 (00:00):
The views expressed in the following program are those of
the participants and do not necessarily reflect the views of
Saga nine sixty am or its management.
Speaker 2 (00:18):
Good eating everyone, and welcome to the Brian Crombie Radio ar.
If you're a regular listener to me to my show,
you've known that I've been really interested on what's happening
with housing crisis in the greater Toronto area, frankly across
numerous different metropolitan areas in Canada, Toronto, Montreal, the Lower
Mainland and Vancouver, Victoria.
Speaker 3 (00:33):
Et cetera.
Speaker 2 (00:34):
And I saw a really interesting article by Chris Spoke,
who is with a real estate developer in Toronto called
Toronto Standard Day specialize in rental housing and mid rise
and you went through, Chris a really interesting post about
development of mid rises and why do you think it
makes a lot of sense? And I was intrigued by
it because a lot of people are commenting about all
(00:56):
the towers. We've got more towers in Toronto than anywhere else,
and you know the world and these big tall buildings,
and isn't it great that we're going to have you know,
two buildings that are you know, not one hundred stories
like over ninety stories, and so it seems that a
lot of developers are focused on maximum density, maximum height,
and you're arguing for something different.
Speaker 3 (01:16):
Why.
Speaker 4 (01:17):
Yeah, well that was certainly true for the last ten,
maybe even fifteen years, where you had this major bifurcation
in our cities where most of the cities were zoned
for no real change, no real growth, and then in
some pockets of the city they were zoned for maximum growth,
and we saw these pockets really develop these high rise
towers that you describe, and then you saw most of
these other neighborhoods just kind of stay stagnant, remaining kind
(01:39):
of how they were in the nineteen seventies and eighties,
with almost nothing in between. And this is not how
most cities grow. Most cities, even in North America, grow
through like as far as multi unit develment, goes mid
rise first because it's a cheaper form of construction. And
what we're starting to see now for a variety of reasons,
including some zoning changes in Toronto specifically, which is the
(02:00):
we operate, that are starting to make this scale a
little bit more feasible, a little bit more desirable. And
it's something that we've chosen to specialize in.
Speaker 2 (02:08):
So you lessed four. There are probably more reasons, but
let's talk about the one is entitlements. And you say
that you avoid zoning by law amendments because they're slow, political,
uncertain et cetera.
Speaker 4 (02:20):
Tell me about that.
Speaker 2 (02:21):
How slow and uncertain are those zoning by law entitlement processes.
Speaker 4 (02:25):
So I mean it's worth saying that in most cities
in the world, and even most cities in North America,
it's not the case that you have to go through
rezoning process for every development. Like a lot of cities
are zoned for growth where they have more of what
we call as of right permissions for redevelopment. Toronto and
most of Ontario actually is quite unique where most development
of any scale that matters requires what we call spot rezoning,
(02:47):
an amendment to the zoning by law. These involved, among
other things, the requirement for a bunch of studies, drawings,
and reports that have to be prepared by a consultant
team and submitted. But crucially, and this is where I
mentioned that they're political, they also involve mandatory community consultation
meetings where feedback from the community is sought and kind
of contemplated as part of a staff report, and then
(03:10):
that staff report then goes to a community council, it's
voted on by the counselors of that community, and then
ultimately goes to city council for another vote. So the
whole process is quite political. In Ontario, we do have
a recourse to the political process, which is the Ontario
Land Tribunal, but rezonings generally are very very adversarial often
and very political. So as much as possible, we try
(03:31):
to lean into where these permissions already exist so that
we could do a more kind of like technical what
we call a site plan control process with the city
and avoid the politics of rezonings.
Speaker 2 (03:41):
So I've been told some statistics like two decades ago
you had to submit four studies, today it's twenty four studies,
that it takes twice or three times as long to
actually get a project approved as it does to actually
build it. That I heard one person tell me that
in there are six different zoning designations, and in Toronto,
(04:03):
a loonan, there's one hundred and ninety. Are any of
those things true?
Speaker 5 (04:05):
Yeah, so the one hundred and nine, I don't know
the specific number. It is true that Japan zones nationally
and they have a small number of zones that apply
country wide and they're fairly kind of predictable and certain.
Speaker 4 (04:17):
There is a lot more variance in Toronto. Not only
do we have like many more zones in the zoning
by law, but then again, every site then requires its
own specific rezoning and a specific a site specific zoning
by law is issued for that site. So it ends
up being that every site effectively has its own zoning
by law.
Speaker 3 (04:34):
It is certainly a true site has its own zoning
by law.
Speaker 4 (04:38):
When you rezone a site, the output of that process
is what's called a site specific zoning by law. So
it's basically the city amending the by law for your
property to make it be able to be built, you know,
out of conformity with the rest with the rest of
the zoning by law. It is true that the number
of reports has exploded over the last ten to twenty years.
We have I think there was a study among OECD
(05:00):
we're like the second most slowest in terms of getting
through these approvals or ententitement processes to building permits. So
we have made it extremely owned er. It's extremely slow,
extremely uncertain, and extremely political, and for that reason we
as much as possible. I say as much as possible,
because many in many cases we can't avoid a zoning
vile amendment, but as much as possible we try to
(05:21):
avoid them.
Speaker 2 (05:22):
You know, you've got a fair amount of experience. You've
got a b social science, economics and public policy. You've
been a project manager, senior project manager, development manager, a
founder of a company, now a.
Speaker 3 (05:34):
Partner with Toronto Centers.
Speaker 2 (05:35):
You've got a lot of experience in the development industry
and in politics. Why why is there a benefit to
all this process that we put in place. I don't.
Speaker 4 (05:46):
I mean, I think there are very rapidly diminishing returns.
So I think, you know, you want some process so
that someone can't just build anything that doesn't properly align.
You know, for example, what city service is when they
build new housing. You do need some process because whenever
you're building in a city, you have to contemplate how
it ties into the rest of the city. I think
we've gone so far beyond kind of like a practical
(06:08):
desirable process that we're now well into the realm of
just kind of like make work job for for city departments.
And we could probably cut this down by fifty percent
without any real negative effects to how we build our cities,
And in fact, I think we'd have many positive effects
we build more housing, and we maybe would have less
of a housing crisis.
Speaker 3 (06:24):
We're in this housing crisis.
Speaker 2 (06:25):
Same as c says we need to build three point
five million extra homes, We've got lots of governments saying
we need to build extra homes. We got the federal government,
the provincial government talking about it. If you think that
we could cut it down by fifty percent and actually
get an improved situation, why hasn't that happened? Like, why
hasn't it happened?
Speaker 4 (06:42):
It's a good question. I think that at all levels
of government, the action is not matching the rhetoric. And
of course we have different parties in power at different
levels of government. I think they all share much of
this blame. Where this issue has been at least the
priority since twenty eighteen, it's kind of like risen to
the level of top three shoes provincially in the over
maybe over the last five years, has become a top
(07:03):
issue federally, but we're not seeing we're not seeing the
action needed, and kind of like the proof is in
the pudding. We're actually seeing more new housing construction coming
online this year than we did last year, and if
this kind continues, we'll have even less next year than
we're seeing this year. So I think this problem, despite
all the rhetoric, but despite everybody saying we need to
solve this, this problem is actually get much worse in
the short term.
Speaker 2 (07:24):
You comment about the cities involving major streets and avenues
policies which are helping to unlock as a rate mid
rise density, can you.
Speaker 3 (07:31):
Explain what that is?
Speaker 4 (07:33):
Absolutely so. One thing I like to say is that
John Torrey didn't do much of anything in his first
two terms. In his third term, he kind of woke up,
and maybe it was because he didn't have to worry
about getting re elected so he could do more of
what he felt was needed. He implemented something called the
Housing Action Plan, and within the Housing Action there are
a bunch of different initiatives, but two of the big
initiatives were upsoting more of Toronto's major streets and avenues
(07:56):
for mid rise development. This, unfortunately was about two weeks
before he then resigned, so some of the execution against
that plan has been quite slow, and I would say
imperfect to put it. Finally, but it is true that
more Toronto streets are being up zoned for more again
as of right, midrise development.
Speaker 2 (08:14):
And that mid rises up to what size, what height?
Speaker 4 (08:18):
Toronto defines mid rises up to eleven stories. One of
these policies, the Major Streets policy, is specifically for six
story midrise and I would say this is one of
the bigger changes to Toronto's official planning zoning by law,
where many of these major streets, and you can think
of a major street as a street that has maybe
a bus route on it will allow for six story
apartment buildings. And then the avenues policy is a little
(08:38):
bit it's kind of like a beefier version of that,
where on some more central versions of these streets you
might have midrise development eight, nine, and even up to
eleven stories.
Speaker 2 (08:48):
There's this big controversy about six plexes, and I understand
that the city of Toronto voted in favor of it,
the old City of Toronto, but the other municipalities or
former municipalities that make up of the suburbs surrounding the
old City of Toronto in current City of Toronto voted
against it.
Speaker 3 (09:06):
And it was an interest Tell me, what.
Speaker 4 (09:08):
Do you think of six pucks Is. I think we
should allow for more what we call gentle intentification in neighborhoods.
This is the way that cities have historically evolved and
grown throughout history until aggressive zoning was introduced sometime in
the seventies. I think it's a good move, and I
think it's too bad that we only had nine out
of twenty five wards opt into these permissions. And going
(09:29):
back to the point about the action not matching the rhetoric,
Olivia Choue said that housing was a priority when she
ran for the mayor election. She has strong mayor of powers.
She could have ensured that this was a city wide
up zoning and she didn't do that. So I think, again,
we're not seeing the action matching the words.
Speaker 2 (09:45):
We're going to take a break for some messages and
come back in just two minutes with our guest Chris Spoke,
who is a developer a partner with a development company
real estate developm company in Toronto called Toronto Standard.
Speaker 3 (09:55):
He specializes in.
Speaker 2 (09:57):
Mid rise rental development and he's got I had a
really interesting point of view about some of the problems
we've got and what the solutions are and his company's
focus on midrise.
Speaker 6 (10:07):
Developments stream us live at SAGA nine six am dot CA.
Speaker 2 (10:26):
Well, come back everyone to the Brian Crimey Radio or
We're talking housing and we're talking with Chris Spoke, who
is a developer with Toronto's Standard, a mid rise rental
focus development company in the Greater Toronto area. He's also
a writer. You publish a regular newsletter. Tell me about
your writing and your newsletter, sir.
Speaker 4 (10:47):
That's right, Yeah, I published a regular newsletter. I'm also
a regular contributor to The Hub, where I write almost
exclusively about housing policy. So I'm kind of the rare
developer who started in policy advocacy and ended up in development,
where as many developers end up in policy advocacy. So
this is an issue that I think is very important.
It's starting to be recognized as such, but again we're
not seeing the action to match. So as much as possible,
(11:10):
I like to add my two cents to the public record.
Speaker 2 (11:12):
Why did you get so involved in advocacy?
Speaker 4 (11:15):
You know, I worked in technology in my twenties. I
worked for software agencies for software startups and just noticed
that housing prices were rising in Toronto. Didn't really understand
how cities and housing development was regulated and how it worked,
and kind of went down this rabbit hole and realized
that you know something that is unique action to the
commonwealth and is especially true in Ontario and Toronto. We
(11:37):
constrain our housing supply to a very large degree, much
more than the rest of the world, and naturally the
outcome of strong demand and low supply is rising prices.
And I thought that was an issue that required more attention.
It's since gotten more attention, but I still think it's
underrated in terms of its importance.
Speaker 2 (11:54):
Well, I appreciate you you writing and the comments that
you've made on LinkedIn that I've read, and I appreciate
you coming with us tonight and your advocacy. Your number
two reason why you focus on mid rice was a
little bit interesting, and I wonder if you explain it
loading space requirements type G loading spaces kick in past
the thirty unit mark.
Speaker 3 (12:15):
What the heck is that explain question? Please?
Speaker 4 (12:18):
So in the city of Toronto, and I'm gonna speak
about Toronto just because that's where we're most active, but
this is true of most cities. City garbage trucks are
very big trucks, and when you build a rental building,
certainly one that has more than thirty units. The city
requires that you fit a large loading area that's called
a type G loading area that can fit one of
these big trucks that is tall enough for it to
lift a bin above and kind of like drop the
(12:41):
garbage into its back that could turn around on your
property so that it doesn't have to reverse kind of
backwards out of your property, and it ends up taking
a very large share of your ground floors, both in
terms of the law area but also the ground floor
of the building itself for these loading areas. If you
think about older buildings that were built in Toronto, this
was not the case. We had a lot more of
this garbage handling, either on the street or on the side.
(13:03):
You had private pick up with smaller garbage trucks. But
in Toronto above the thirty unit mark, there's now some
inflexibility between thirty and sixty units, but you have to
build these really large garbage rooms. And one kind of
like side comment on this, A lot of people complain
about the loss of fine grain major street retail when
neighborhoods are redeveloped from mid rise condo and the reason
for that. One big reason for that is because so
(13:25):
much of that ground floor is now given to these
city requirements, including these ted g loading areas, that there's
no space left for as much retail as was being replaced.
Speaker 3 (13:33):
Is there a better solution?
Speaker 4 (13:35):
Yeah, I think so. I think you know one very
interesting solution. It would take kind of like a city
wide effort. You see this in a lot of European
cities and a lot of Southeast Asian cities where you
have communal garbage bins. So people who live in apartment
buildings go to city own and city operated garbage bins
along the street. And these could be nicely done so
that they're kind of like mostly below grade, but with
(13:56):
like a little hatch above grade. And basically it's functions
as a city utility like we do with water and
with electricity. So you have daily pickup of these city
owned communal garbage bins, and the garbage doesn't need to
happen on site on a building by building basis. But
it's kind of like a neighborhood thing.
Speaker 2 (14:14):
What about just backing in and backing out? Why can't
they do like a three point turn?
Speaker 4 (14:19):
You could do that. I mean, you know, what I'm
describing is probably the highest lift effort thing. Another thing
is you get you can allow more of that. You know,
there's some safety issues. I think a big thing that's
worth exploring is just smaller garbage trucks as our cities
get more dense. If you think about cities in Europe again,
in Southeast Asia, Tokyo, we talked about Japan. Fire trucks,
ambulances and garbage trucks are all much smaller and they're
(14:41):
more conducive to kind of like a fine grain urban life. Well,
we have are really suburban and even rural sized garbage
trucks that are trying to fit into tight urban fabric.
And often what it means is is these on economic requirements.
Speaker 2 (14:54):
I heard a complaint about suburban streets in Peel that
they're two because it was the fire trucks that had
to be able to do a three point turn maximum
three point turn in a suburban street. And because of that,
the suburban streets became so big they were sort of
unwelcoming to people.
Speaker 3 (15:12):
Also so wide that people you know, sped on them.
Speaker 2 (15:15):
So are some of our requirements for municipal activities actually
harming our built environment?
Speaker 4 (15:23):
I think I think they absolutely are if you think
about the sort of cities that you like to visit
on vacation that are most charming, they don't have these
like six lane streets, these major streets. I think narrow
streets just feel better. They're more conducive to urban street life,
to retail street life. And it is true, it is
these these these fire chief requirements, these garbage waste management requirements,
they all lead to, you know, everybody kind of looking
(15:45):
out for their interest, but nobody thinking about the impact
on the city as a whole. And and that's how
we kind of end up where we are.
Speaker 2 (15:52):
Also heard that some people are complaining about the need
for two fire escapes and that lots of municipalities, lots
of regions, jurisdictions around the world have gotten rid of that,
that that's an old sort of requirement.
Speaker 3 (16:04):
Tell me about that.
Speaker 4 (16:05):
Yeah, so this is very relevant at our scale where
if you're building a high rise tower, the idea of
having two means of egress, two exits stairwells is not
a big deal. On again, tight mid rise urban lots,
it is a big deal. And so in Ontario, if
you build a multi unit building that's more than two stories,
you need two means of egress. These are the most
aggressive rules in the world outside of Uganda, whereas most
(16:29):
of the.
Speaker 3 (16:29):
World alive inside of Uganda. Thank you for doing that.
Speaker 4 (16:32):
Uganda is the only country in the world that has
more aggressive egress requirements than Ontario does. So, you know,
as an example, something that's kind of like not too
far off. In New York City or Seattle, you could
build a six story building with a single means of egress.
In most of Europe you can go into the teens
in terms of stories with a single means of egress.
And when you're talking about buildings in Ontario, if you
(16:54):
build a four story or taller building, they have to
be sprinklered. These are actually very fire safe buildings. Most
fire deaths and most fires actually in real estate happen
in stick built, low rise detached housing. It's very rare
that a sprinkler building has any real fires or any
real consequence of fires. So these, again, these are rules
that have been introduced at a time when we have
(17:15):
the materials technology that we had today. We did have
sprinkler systems that we had today, And the only reason
they stay on the books as far as I can tell,
is that it's easier to just kind of maintain the
status quote than to do things differently.
Speaker 3 (17:26):
Fascinating.
Speaker 2 (17:26):
And you've talked about how entitlements are a constraint and
that you try to stay away from them, needing to
get new zoning BiLaw amendments, how loading space requirements for
garbage are critical, and we also talked about about fire
and the size of roads. The third one you talked
about is construction systems, and you say that you.
Speaker 3 (17:46):
Like stick frame up to six stories.
Speaker 2 (17:48):
I've heard a lot about about wood, about stick, about
about mass timber. Tell me about about mass timber, stick
versus concrete.
Speaker 4 (17:57):
Yeah, so when we're talking about buildings up to six
stories and us, you know, most recently it's been a
couple of four story buildings, stick stick frame is the
most cost effective way to build in Canada. We have
a lot of wood, we have a lot of trades
that are very familiar with framing in wood, and it's
and it's just the cheapest, the cheapest way to build.
Where construction gets really expensive is when you have to
do board in place, concrete, form work and that sort
(18:20):
of thing. So we try to avoid that as much
as possible. One of our you know, it's not exactly
a secret sauce. These These are kind of like well
known construction systems. But one of the ways in which
we make our development performance work is by staying away
from cast in place concrete. So we like, we like
wood frame up to six stories. If we're at seven
eight stories, we like a hybrid system combining could form steel,
(18:41):
which is kind of like a light gauge steel with
pre cast concrete floors and shafts and uh and again
just avoiding cast in place concrete and form work.
Speaker 2 (18:50):
Now I'm told that you can actually do wood far
higher than six stories, but maybe our regulations are problem
But in reality you could is that true?
Speaker 4 (18:57):
That's right, and you could go. I think the Archair
Building Code is updated to allow for mass timber up
to eighteen stories. So mass timber is a much heavier
duty version of wood. When I say stick frame, i'm
talking about you know, the two by fours and the
four by fours that everybody's familiar with. Mass timber has
a lot more structural support for a much higher structural load.
(19:18):
We're not very familiar with mass timber systems. There aren't
many mass timber suppliers. There's a big push actually from
the federal government through its Building Canada Homes Agency that's
kind of spinning up right now to push for more
mass timber construction. Our thinking, having done quite a bit
of research in this, is that we need more scale
among the suppliers to get the costs down to be
as competitive as let's say, cold form steel. But we
(19:40):
do have some friends, for example in the industry in
Toronto that are playing around and building with mass timber.
Speaker 2 (19:44):
Now, some of the comments I hear is that people
like concrete more, they pay more for it. They will
pay more rent for it because of noise, because it's
more stable, because of concerns about fire.
Speaker 4 (19:53):
What's your sense, Yeah, I think noise genuation is a
very big consideration, especially for rental where you have people
turning over let's say every two or three years, you
want to make sure that every new person does not
get turned off by noise coming through the units. So again,
on our slightly taller mid riise, we do precast concrete,
so it is a concrete floor slab. It's just bored
(20:14):
in a factory and then trucked on site. It's not
cast on site, but it still has the same noise
to tenuation properties as cast and place concrete. And then
when we're doing when we're doing wood frame buildings and
wood frame floors, typically what we do is a level
of what we call topping, which is a gyp cree.
It's a mix of gypsum board and concrete, and then
you do a couple of inches of that on top
(20:34):
of your flooring system, and you combine a few other
materials to attenuate noise as much as possible. Cast in
place concrete performs very well, it's really the cost that
kill us.
Speaker 2 (20:44):
The fourth issue you talked about was absorption risk, and
I guess this one's a little bit obvious, but you
suggested that obviously, the smaller you can absorb it tell
me why absorption is a big issue for a rental
housing development.
Speaker 4 (20:56):
Yeah, So rental housing development happens on these very long
and pt tracted timelines, and one of the big reasons
for that is the entitement process that we talked about.
And the longer this process is, the more vulnerable you
are to changes in the macro climate. So if there's
some change to immigration policy, for example, when you're halfway
through your entitlement process, that's something that you might not
have underwritten for when you were buying the site, you know,
(21:18):
a couple of years prior. So as much as possible
we try to tighten that timeline. We try to avoid rezonings,
We try to build efficiently and quickly, and we try
to do these smaller buildings that could lease up fast
there so that we have some degree of predictability on
the macro environment. I think when you're building four hundred,
five hundred and six hundred unit kind of high rise towers,
(21:38):
there's no way to reliably forecast what the immigration policy
will be, what the interest rate environment will be, and
and a lot of a lot of developers that get
very rich, they just you know, they just had lucky timing.
And a lot of developers that blow up they had
unlucky timing. And as much as possible, we try not
to leave these things up to luck. We try to
tighten the process up.
Speaker 2 (21:57):
You commented that Charles's housing market team to stagnate. New
condos can't launch, and recently completed condos are leaving owners underwater. Meanwhile,
high rise projects are rarely able to make the switch
to purpose built rental because construction costs are too high.
So what are you suggesting everyone start building what you're.
Speaker 4 (22:15):
Building, so we're what we are doing now works for
this moment in time, where development charges are what they are,
where interest rates are what they are, and where rental
financing programs are where they are. I think, I think
to get back to a world where high rise cast
and place concrete condominium projects work, I think a few
(22:37):
things are gonna have to change. I think we're gonna
have to have lower interest costs or interest rates. I
think we're gonna have lower construction costs, We're gonna have
to have lower development charges, and we might need to
do something like ending the ban on foreign buyers. We're
not condo developers. We don't sell condo But this is
kind of the feedback we got from our friends in
the condo world, where nobody's really launching a sales center
these days in the Greater Toronto area because condos it's
(22:59):
costing more to build them than you could sell them
for these days.
Speaker 2 (23:02):
So I was told that there was something like eighty
cond of medium projects that were put on hold in
the last year eighteen months.
Speaker 3 (23:10):
If you were one of those.
Speaker 2 (23:11):
Condo builders, prospective condo builders, what would you do you're
saying that it's difficult to convert to purpose build rental,
So what do you do.
Speaker 4 (23:18):
A love then we're trying to figure that out. I
think the challenges with converting these projects the purpose build
rental is their construction costs really require a higher revenue number,
which really comes from condo. They often provide more parking
than is optimal for rental projects, and there might even
be in parts of the city that are not great
for rental. And even if you can line all those
(23:39):
things up so that it does work for rental on
a high rise project, the amount of equity required for
rental project is much higher than it is for condo
and there are only so many pension plans that you
could hit up for equity funding for these projects. So
I think a lot of these developers are just gonna
be stuck for a long time. A lot of them
their companies are going to have to do continuous layoffs,
and I think a lot of them don't make it
out alive to the end of this cycle. I think
(24:01):
we're going to have a major kind of correction, you know,
to put it nicely.
Speaker 3 (24:05):
A major correction.
Speaker 2 (24:07):
I had a gentleman on the president of Rescom, who
said that he was worried about one hundred and fifty
to two hundred thousand layoffs and one and a half
percent decline in GDP.
Speaker 3 (24:15):
What do you think of that?
Speaker 4 (24:16):
Yeah, I think housing development is a major part of
the economy. It's probably bigger than it should be, and
I think that's right. It leaves us very vulnerable to
these cycles. And aside from the impact on economic growth,
the impact on municipal revenues. So much municipal revenue comes
from development charges, comes from land transfer taxes. All these
things are going to take major hits as this industry
(24:38):
goes through a slump. I think a protracted slump. And
I think, you know, many people are kind of head
in the ground sort of thing and not really seeing
how bad this could get. I think I think that
might have been Richard Lyle. I think he's exactly right.
Speaker 3 (24:50):
Think what is that one?
Speaker 1 (24:51):
Back in two minutes, No Radio, No Problem stream is
live on SUG ninety sixty am dot c.
Speaker 2 (25:13):
Holcome back everyone to the Brian Cromby Radio or I'm
having a I'm really enjoying this conversation with Chris Folk,
who is a real estate developer in the Toronto, where
he's also an advocate.
Speaker 3 (25:23):
In a lot of policy issues.
Speaker 2 (25:25):
We've been having a good conversation about how he's focused
on mid rise rental accommodation. He talks about the condo
business being in a terrible state right now, and that
condo developers that are trying to convert to purpose built
rental are challenged by high construction costs. He talks about
the time of absorption, and he's gone through in detail
a bunch of the challenges in regards to entitlements and building,
(25:46):
the zoning regulations and building rules and regulations, building standards,
absorption in time period, et cetera. Chris, you've been pretty
explicit and pretty frank, and a lot of the challenges
that you've outlined for the housing industry right now.
Speaker 3 (26:03):
If you got to sit down with the.
Speaker 2 (26:05):
Premiere, what would you tell him, what would you recommend?
Speaker 3 (26:09):
What should he do?
Speaker 4 (26:11):
I would suggest that he deep that he reached deep
into his conservative roots and think about deregulating and cutting taxes. This,
you know, should be right up his alley. But I
don't think we've seen enough of that. So on the
taxi side of things, development charges, I think I've gotten
way too high. They maybe just barely made sense when
interest rates were zero and when the cost of capital
was zero. They certainly don't make sense now. I think
(26:32):
we need a full reset. And then on the regulation side,
you know, there are things we could do to update
our building code, including on these egress requirements, to make
it easier, cheaper and faster to build. And there's a
lot of power that the province has over munistalities to
allow for more entitled land in a faster process. I
think we've seen some baby steps in this direction, but
(26:52):
seven years into his mandate, I don't think. I don't
think he's delivering. You know, he got elected in twenty
eighteen saying that he was going to make housing more affordable.
Housing is much less affordable, and not only that, but
the whole industry is blowing up. So I think that
he has the levers available to him. I think he
has the ideological background that should be consistent with the
deregulatory agenda and a tax putting agenda. I think he
(27:13):
just needs to do it.
Speaker 2 (27:14):
You know. I think it was about two and a
half years ago that he came out with his Housing
Affordability Task Force that had something like fifty seven recommendations,
and I read it with it only like five or
six of them have actually been implemented.
Speaker 4 (27:25):
Why, you know, it's the politics of housing. Housing is
very tricky because you know, for for every person that's
priced out of the market, someone has done very well
in their home equity. For every person that can move
into a neighborhood, there's someone else in the neighborhood who
enjoys not having a new shadow cast on their property.
So you have the haves and have nots, and often
(27:45):
the haves just vote in greater numbers. They're older, the homeowners,
they're more established, and they're more reliable voters. I think
this is a big kind of problem with Western democracy
where you're having this problem kind of play out not
just in Toronto and the GTA, but actually across the
Western world and certainly across the Commonwealth. So ultimately, you know,
(28:05):
this is why I said I was a little bit
optimistic about John Tory's third term. He thought that was
going to be his last term. And you can maybe
only do what you should do when you don't have
to consider re election.
Speaker 3 (28:17):
Chris, you graduated in twenty thirteen.
Speaker 2 (28:19):
I understand I graduated just a few years earlier than you.
Speaker 3 (28:24):
I really worry that there's an.
Speaker 2 (28:25):
Issue of intergenerational inequity right now. My generation have left
your generation with unaffordable housing, a huge amount of debt,
lack of infrastructure and infrastructure deficit, climate change issues, you know,
et cetera, et cetera. Some people think that intergenerational inequity
(28:46):
could lead to civil strife because people like you, your
age group, my kids are going to get so upset,
so pissed off, that they take to the streets, they
start demanding radical change.
Speaker 3 (28:58):
What's your sense of things.
Speaker 4 (29:00):
I think that's right. I think when you kind of
price out a generation from ownership, from the ability to
grow and start a family, from the ability to kind
of see upward mobility, or at least the same upward
mobility as their parents, I think there's a lot of resentment.
I'm clearly, you know, as a real estate developer, a
committed capitalist, but I think it's no wonder that you
see a lot of younger people turning to socialism and
this kind of like anti landlord version of socialism. Mendani
(29:23):
in New York will likely be mayor, you know, a
committed socialist candidate and I think a big part of
that is you have a downwardly mobile generation that is
downwardly mobile in large part because of policy choices made
by their parents and grandparents. So I think that's exactly right,
and I think that this needs to be taken very seriously.
Speaker 3 (29:40):
Downwardly mobile.
Speaker 2 (29:41):
Okay, so if you sat down with not doug Ford
Bolivia Chow, what would you tell her?
Speaker 4 (29:47):
You know, the first thing I would tell her is
that she needs to get over her aversion to using
these strong mayor powers. I think she has an ideological,
you know, commitment to not using them. Ultimately, she was
elected by the city as a whole, and she needs
to act as a representative of the city as a
whole through these powers that were given to her by
the province. She could again have made the six plex
permissions citywide. There's a lot more she can do. She
(30:10):
selected a new chief planner. There's a lot more she
could do with the new chief planner to speed up
these processes, to entitle more land for gential intensification, to
make real estate development more feasible, and ultimately to develop
and deliver more housing. She doesn't seem to be particularly
committed to that and again, I don't know if it's
a generational thing. I don't know if it's because she
prefers some of the more ceremonial aspects of her job.
But we're not seeing the focus that the issue deserves.
Speaker 3 (30:33):
Chris.
Speaker 2 (30:33):
If people are intrigued by this conversation want to follow you,
what's the best way for them to get your newsletter
and follow?
Speaker 4 (30:39):
Yeah, so my newsletters at Chrisfolk dot substack dot com.
I'm fairly active on Twitter at Chris Folk, and our
company website is Toronto Standard do coo and I talk
about this stuff all day every day, so happy to
have people join along.
Speaker 2 (30:51):
If I or some other people want to go check
out one of your recent developments to take a look
at a nice rental property, where should we go?
Speaker 4 (30:58):
So the most recent one is a small four story
stick frame building that we just completed at Windermere and
run a Need. We've got a really cool ice cream
shop as our commercial ten on the ground floor, Good
Gang ice Cream, which might just be the best I
think ice cream in West Toronto. So that's at six
five six in Net and they could come on come
on down, Chris.
Speaker 3 (31:15):
I really appreciate you joining us tonight. Thanks so much.
Speaker 4 (31:17):
Thank you.
Speaker 2 (31:18):
That's our show for tonight, everybody. Thank you for joining.
I remind you on mine every mond you through Friday
at six o'clock on nine to sixty am. You can
stream me online at Triple W SAGA nine sixty am
dot cl My podcast and videos are on my website
Briancromby dot com. As soon as the radio show goes
to air, I put them up on YouTube, on social media,
on podcast servers.
Speaker 3 (31:34):
You know, I'm everywhere, so you can grab.
Speaker 2 (31:36):
Me because I try to, like, you know, forget about
all these regulations that limit my exposure. I think there's
got some really interesting suggestions and comments to make. I
think that his comments in regards to entitlements, you know,
the zoning rules have just gone berserk in I think
the development fees going up by one thousand percent and
over in just a decade in the Toronto area. I
(31:58):
think that this about huge layoffs coming in the building
industry or a big risk and the impact on the economy.
Speaker 3 (32:04):
I think that some of the building regulations need to
be seriously thought about.
Speaker 2 (32:07):
It in regards to garbage truck and loading and size
of width of roads and a number of egress, you.
Speaker 3 (32:14):
Know, fire escapes, et cetera.
Speaker 2 (32:16):
I think, you know, Chris's comments about generational inequity and
downward mobility are pretty scary, and we got to think
about that.
Speaker 3 (32:24):
And I think that our generation have got to.
Speaker 2 (32:25):
Give some some deep thought to the community that we're
leaving to Chris and his and his and his age group.
Speaker 3 (32:34):
So thanks Chris very much. I really appreciate it.
Speaker 4 (32:36):
Thank you for having me.
Speaker 2 (32:37):
We're going to take a final break and come back
with some concluding comments in just two minutes.
Speaker 6 (32:41):
To stay with us, everybody, stream us live at SAGA nine
six am dot C.
Speaker 3 (33:00):
Welcome back everyone to the Brian Crombie Radio Hour.
Speaker 2 (33:02):
I have just done two interviews two experts in.
Speaker 3 (33:06):
The housing industry.
Speaker 2 (33:08):
Al ed ibuwas a deputy Chief economist of AC and
Richard Lyle, the head of the Residential Construction Council of Ontario.
Both of them have talked about how this is a crisis,
and I think that we've got to really give some
detailed thought to how bad this crisis is, how a.
Speaker 3 (33:27):
Bust boom boom bust.
Speaker 2 (33:29):
Boom scenario can can destroy a lot of people's lives.
I think that we've got a situation where you know,
we have this intergenerational inequity where it's completely unaffordable for
young people to afford housing. And then at the same time,
we've got a whole bunch of people that have built
up a big net worth in housing that probably they
(33:52):
should have been investing in in other things to ensure
their retirement.
Speaker 3 (33:57):
And if we have a bust, they're gonna lose money.
Speaker 2 (34:01):
And particularly if they entered into home equity lines of
credit or mortgages or something like that to maximize the
leverage on overinflated housing, they could end up having a problem.
So it hurts people on the boom and it hurts
people on the bus, And we got to realize that
as we go through this, and it's the same as
almost any other boom bust cycle where it can harm people,
and housing should go up by GDP.
Speaker 3 (34:25):
It shouldn't be an investment.
Speaker 2 (34:26):
It should be something that is, if not a right,
damn close to a right, and should be the same
percentage of income over time or the same multiple income
over time, the same percentage from a mortgage carrying standpoint,
and the fame multiple from a total price standpoint, from
generation to generation, from year to year from decade to decade.
(34:48):
There's no justification for it to increase at dramatically higher
rates other than maybe if it's you know, on water
or uniquely positioned at Maine and Maine or Bay and
King or something like that. So yes, location does warrant
some appreciation above what average appreciation would be, but.
Speaker 3 (35:08):
General housing shouldn't.
Speaker 2 (35:10):
We should make enough of it such that it goes
up by GDP. So I've got a ten point program
that I want to propose that I think we need
to address because I think we need politicians and we
need the public to realize that we in a crisis situation.
And we really have gone from two years ago FOMO
fear of missing outsets that everyone was overbidding and prices
were booming and prices got to a high to today FOOP,
(35:33):
where it's a fear.
Speaker 3 (35:34):
Of overpain and no one is willing to.
Speaker 2 (35:37):
Pay.
Speaker 3 (35:38):
And as Richard Lyle talked about.
Speaker 2 (35:39):
He's worried that we're going to have hundreds of thousands
of layoffs leading to a one point five percent to
two percent decline in GDP. We can't risk that. We
can't risk the layoffs, we can't risk the unemployment. We
can't risk the devastation to our economy.
Speaker 3 (35:53):
We can't risk the decline to GDP. We can't risk what's.
Speaker 2 (35:56):
Going to ultimately be the result of that, which is
going to be another boom in a couple of years
because there's no housing available and our young people become
even more sentenced to a life without the Canadian dream
of owning a house. It's wrong and we need to
address it. So here's my ten point plan. First of all,
(36:18):
I think we need to change the whole attitude of
government and particularly people in city planning and city councils
and planning committees, et cetera, from the Planning department attitude
that's been we want to stop development in the past,
to more like the Economic Development department, which is we
want to attract development to our cities, and they need
(36:38):
to become customer focus. They need to become focused on
what we can do to build great cities rather than
what we can do to stop development from happening. So
I think we need to have a.
Speaker 3 (36:46):
Complete changed attitude.
Speaker 2 (36:48):
And if we believe that this crisis is happening and
it's going to cause lafts, it's going to cause devastation,
it's going to cause drop in GDP. It's going to
cause housing and affordability, and we need to have an
attention to it like we did in the pandemic, like
we are I think in regards to the threat of
Trump tariffs, then we'll take the kind of action that
we need to take. So Number one, change the whole
attitude within municipal politicians and with the missile planning departments
(37:11):
to be more like the economic development. We want to
attract building. We want to attract development rather than we
want to push it away. Number two, development fees should
go to zero right away.
Speaker 3 (37:24):
A couple of years from now.
Speaker 2 (37:25):
If you want to increase them again, we can talk
about it, but for now, in this crisis scenario, they
should go to zero.
Speaker 3 (37:31):
And I don't think there's any other choice.
Speaker 2 (37:34):
We need to take that one to one hundred and
fifty thousand dollars, which is equal to the kind of
down payment that a lot of people would pay. This
unbelievable growth pays for growth. Incorrect belief that developers pay
for the development fees, not the end consumer. This unbelievably
probably the most progressive tax. As Richard Lawlas talked about
(37:56):
a syntax comparable to cigarettes or alcohol, which is discouraging
people to consume, which.
Speaker 3 (38:03):
Is not what we should be having.
Speaker 2 (38:04):
On housing, we need to eliminate it completely right away.
Speaker 3 (38:08):
Zero.
Speaker 2 (38:09):
Do we need to come up with another way of
funding infrastructure, No question, And I think it's the way
that the United States funds it, whether the whole society
pays for it by way of municipal tax bonds, or
whether it's just funded through property taxes, or whether it's
funded by infrastructure to come from the provincial or federal government. Yes,
we need to come up with a different way. But
(38:30):
to have these development fees that have gone up by
one thousand percent over the course of the last decade,
that's creating three billion dollars worth of a surplus for
the Sea of Toronto. That is regressive that the people
that can least afford it are asked to pay for it.
We need to get rid of it, and rid of.
Speaker 3 (38:46):
It right away, zero, right away. Across the board.
Speaker 2 (38:49):
Number three GST HST on housing. You know we put
in this consumption tax. You know Brian Morrooney did back
what it forty years ago and it may have made
sense to be as broad based and across the board
as possible, but we've taken it off and oil at
different times.
Speaker 3 (39:09):
We've taken it off.
Speaker 2 (39:10):
Different items that have been deemed strategic to our economy
and important to people. We need to take it off
of housing right now. If we want people to be
building housing, if we want people to be buying housing,
we need to take it off right now. You know,
I think that taxation is one of those things that
you increase in good times and you decrease in tough
(39:32):
times Keynesian economics. This is a crisis time. The GST,
the HST, the provincial sales taxes on housing, on all
things that go into housing eliminated right now.
Speaker 3 (39:45):
We're in a crisis situation.
Speaker 2 (39:46):
Number four, provincial rules should be imposed that effectively provide
as of right housing. I'm doing development in Texas. Everyone
in Texas has talked about this new Senate build that
effectively means that you've got a zoning within a city
that's over one hundred and fifty thousand population where the
(40:10):
most beneficial density zoning applies across the board. So if
a city has decided that a certain density is appropriate,
they applied it across the board. And I think it's
a simple way of simplifying how many different zoning designations
we have. I think what we need to do is
we need to get rid of a lot of these
rules and regulations that different cities put in place, that
(40:31):
different municipalities put in place, that different wards within municipalities
put in place, and frankly, different councilors and different planning
people in different parts of different wards of different cities
end up putting in place. We need to simplify that.
We need to quicken up the process of getting approval.
It makes no sense that it takes two to three
times as long to get something improved as it does
to build it. We need as a right zoning. I
(40:53):
think that the MTSA rules that were thought about that
dramatically increase density and height around major T transit station
areas and not just down the streets, but in a
circle radius as people thought about walking to major transit.
That's the right type of change, and we need those
types of zonings around major transit station areas. We need
the main street zonings, we need the six plexes as
(41:15):
a right on regular streets. We need to dramatically decrease
the rules and regulations in regards to what you can
build and make it as the right so people can
quicken up the process of getting approvals, submitting building plans,
and getting under construction.
Speaker 3 (41:31):
Number five.
Speaker 2 (41:32):
Inclusion the inclusionary zoning, where we give more affordable development
available to people, is critically important, but it should be
done by way of an incentive, not a disincentive. By
having the inclusionary zoning, the ten percent of the homes
that you want at below market rates being paid for
by the other people in that condo building or apartment
(41:54):
building makes no sense. It's a regressive taxation on the
people that can least afford. It should be something that
is carried by all the society. The bill that was
passed in Florida, which effectively means that if a developer
builds inclusionary zoning, they get a reduction in property tax
for the next twenty years, makes ten of sense because
what that does is it means that all of society
(42:15):
shares the cost of providing inclusionary zoning, not a regressive
taxation on one part. So affordable housing is something we
need to do it, but the way that we've been
enforcing it is wrong and it needs to change.
Speaker 3 (42:30):
Number six.
Speaker 2 (42:31):
I think what we need to do is we need
to think of housing as the best social program out there.
I think that the statistics and this book called Abundance
that's been written in the United States is excellent. What
it does is it shows where we've got increase to
supply of housing home, homelessness goes down dramatically. And so
(42:51):
we've got to take a look at all these progressive people,
these left wing people that say that they want to
decrease homelessness, but come up with all these massive programs
to deal with it.
Speaker 3 (43:01):
The best program is to take them off.
Speaker 2 (43:03):
The street and give them a home, and the best
way to do that is by way of dramatically increasing
supply across the United States. It's been proven in Canada
as well that if you have an increase in housing supply,
you'll have less homeless and so we need to make
that available. Does it need to be affordable, Does it
often need to be social housing? Yes, but we need
to make sure that people have an opportunity to put
(43:27):
a roof over their head. I had one interviewee that
told me that homeless people visit on average emergency wards
one hundred times a year. I don't believe that statistic.
Maybe it's homeless people with mental health issues. I'm not
sure I want to find out, but it makes logical
sense that if you're homeless and you need some care,
if you're cold, if you're hungry, if you need some drugs, medication, etc.
(43:50):
You're going to go to emergency And that is one
of the reasons why.
Speaker 3 (43:53):
Our emergency room waits are too long.
Speaker 2 (43:56):
If we give them a home, I was told it
costs less than one hundred thousand dollars, but if they're
on the street, it costs US an excess of half
a billion half a million dollars. So it's a five
times increase for society to not give them a home.
So let's deal with our homelessness problem by making more
housing available.
Speaker 3 (44:16):
Seven.
Speaker 2 (44:16):
We need CMHC to become more aggressive. This change that
they've taken the amount of debt that they're willing to
finance from ninety five percent down to seventy five percent
and putting the risk on rents.
Speaker 3 (44:26):
On private developers. You know what, they should take some risk.
Speaker 2 (44:29):
But it's not that kind of differential in leverage, because
what's happened is purpose built rental has gone down dramatically
in that regard, and so we need to have CMHC
more aggressive in providing financing and shouldering some of that risk.
The whole idea here was that they were going to
take some risk of the housing leverage, and we need
(44:50):
to have CMTC increase the amount of funds they've got
available and increase the amount of leverage that they're willing
to provide to developers. Number eight, there's been a real
lack of productivity within housing, and I think that's caused
by this plethora of different zoning, the plethora of different
building codes, the lack of modernization of building codes, the changing,
(45:11):
constant changing of building codes, et cetera. We need to
focus on making sure that we've got some consistency and zoning,
consistency in building codes, focused on productivity, less rules and
regulation so that we can become more productive. Why do
we have far smaller housing companies in Canada that don't
(45:31):
have the economies of scale that they would elsewhere in
the world, particularly in the United States.
Speaker 3 (45:35):
We need to think through that. We need to have
the role of AI.
Speaker 2 (45:38):
The role of digital twins, the role of economies of
scale like we've got in every other industry in the
world apply to housing and figure out how we can
do that. Number nine tariffs reciprocal terraffs, tariffs in the
United States, tariffs on furniture, tariffs on HVAC, tariffs on
electrical equipment. We've got to solve this tariff for We
got to solve it for the economy in general, but
(45:59):
we got to solve it in housing particularly. And the
fact that the Americans are taxing our lumber at outrageous
amounts that's that their housing is going to become more
expensive doesn't make sense. And the fact that we then
put on reciprocal tariffs on aluminum, steel, mechanical equipment, electrical
equipment that is coming into Canada that we need for
housing makes no sense. We need to solve that problem.
(46:19):
And Number ten, we need more people in the housing industry.
We need more skilled laborers.
Speaker 3 (46:26):
We need to do training, we need to do apprenticeship.
We need to think about immigration.
Speaker 2 (46:30):
That attracts people that have got those skills such that
we can bring them to Canada to work. I'm really
worried about what Richard Loles talked about about mass layoffs
and then what do those people do. They move into
other industries, they move into other geographies, and we can
never get them back.
Speaker 3 (46:43):
We need to be thinking.
Speaker 2 (46:44):
About having the right kind of employment in housing given
this crisis scenario, that we would have for doctors, that
we would have, for nurses, that we would have for
people with stem experience, that people would have for quantum computing,
you know areas of industry that are important. We need
to have a labor market strategy. We need to have
a labor market strategy for housing. So crisis situation we
(47:07):
need to acknowledge and admit and put an all government
and all business industry effort into solving. We need to
have an economic development attitude. We need to have an
elimination of development fees. We need to have an elimination of.
Speaker 3 (47:20):
The GST on housing. We need to think.
Speaker 2 (47:22):
About provincial rules rather than a plethora of rules in
all municipalities. We need to think about market housing affordable
housing from all of society standpoint rather than the inclusionary
zoning that.
Speaker 3 (47:35):
We've had in the past. We need to get.
Speaker 2 (47:37):
Rid of homelessness by providing or housing and make housing
or right. We need to have CMAC and government support
housing with more financing and higher leverage.
Speaker 3 (47:44):
We need to have.
Speaker 2 (47:45):
Productivity orientation to housing and thinking about economies of scale.
We need to eliminate tear us on the inputs to housing,
and we need to have a labor market strategy for
our housing. That's my ten point plan to solve the
housing crisis. But the most important thing, so the old
thing about draining the swamp, is understanding you're in one.
We've got to understand where we are in a housing crisis.
(48:07):
We've had a boom, We're having a bus. We're going
to end up having another boom. That's not the way
to manage an industry or let alone something that's so
and critically important to our economy and critically important to
all of us, making sure that we don't have this
intergenerational inequity such that people my age have huge net
worth in their homes and people my kids age can
never afford a home.
Speaker 3 (48:27):
It's just not fair, it's just not right. We need
to address it right now.
Speaker 2 (48:32):
We need to take attention to this crisis that is
at our doorstep and address it.
Speaker 3 (48:36):
Thanks for joining, Thank you for listening. I'm Brian Cromby.
Speaker 2 (48:39):
Brian Cromby Radio Hour on every night six o'clock nine
to sixty am. You can stream you online at Triple
WAGA nine sixty dot You can get on my podcast
videos on my website Briancromby dot com, on YouTube channel,
on social media, on podcasts.
Speaker 1 (48:50):
Thanks goodding, No Radio, No Problem. Stream is live on
Sagay nine c a M dot c A
The views expressed in the following program are those of
the participants and do not necessarily reflect the views of
Saga nine sixty am or its management.
Speaker 2 (00:18):
Good eating everyone, and welcome to the Brian Crombie Radio ar.
If you're a regular listener to me to my show,
you've known that I've been really interested on what's happening
with housing crisis in the greater Toronto area, frankly across
numerous different metropolitan areas in Canada, Toronto, Montreal, the Lower
Mainland and Vancouver, Victoria.
Speaker 3 (00:33):
Et cetera.
Speaker 2 (00:34):
And I saw a really interesting article by Chris Spoke,
who is with a real estate developer in Toronto called
Toronto Standard Day specialize in rental housing and mid rise
and you went through, Chris a really interesting post about
development of mid rises and why do you think it
makes a lot of sense? And I was intrigued by
it because a lot of people are commenting about all
(00:56):
the towers. We've got more towers in Toronto than anywhere else,
and you know the world and these big tall buildings,
and isn't it great that we're going to have you know,
two buildings that are you know, not one hundred stories
like over ninety stories, and so it seems that a
lot of developers are focused on maximum density, maximum height,
and you're arguing for something different.
Speaker 3 (01:16):
Why.
Speaker 4 (01:17):
Yeah, well that was certainly true for the last ten,
maybe even fifteen years, where you had this major bifurcation
in our cities where most of the cities were zoned
for no real change, no real growth, and then in
some pockets of the city they were zoned for maximum growth,
and we saw these pockets really develop these high rise
towers that you describe, and then you saw most of
these other neighborhoods just kind of stay stagnant, remaining kind
(01:39):
of how they were in the nineteen seventies and eighties,
with almost nothing in between. And this is not how
most cities grow. Most cities, even in North America, grow
through like as far as multi unit develment, goes mid
rise first because it's a cheaper form of construction. And
what we're starting to see now for a variety of reasons,
including some zoning changes in Toronto specifically, which is the
(02:00):
we operate, that are starting to make this scale a
little bit more feasible, a little bit more desirable. And
it's something that we've chosen to specialize in.
Speaker 2 (02:08):
So you lessed four. There are probably more reasons, but
let's talk about the one is entitlements. And you say
that you avoid zoning by law amendments because they're slow, political,
uncertain et cetera.
Speaker 4 (02:20):
Tell me about that.
Speaker 2 (02:21):
How slow and uncertain are those zoning by law entitlement processes.
Speaker 4 (02:25):
So I mean it's worth saying that in most cities
in the world, and even most cities in North America,
it's not the case that you have to go through
rezoning process for every development. Like a lot of cities
are zoned for growth where they have more of what
we call as of right permissions for redevelopment. Toronto and
most of Ontario actually is quite unique where most development
of any scale that matters requires what we call spot rezoning,
(02:47):
an amendment to the zoning by law. These involved, among
other things, the requirement for a bunch of studies, drawings,
and reports that have to be prepared by a consultant
team and submitted. But crucially, and this is where I
mentioned that they're political, they also involve mandatory community consultation
meetings where feedback from the community is sought and kind
of contemplated as part of a staff report, and then
(03:10):
that staff report then goes to a community council, it's
voted on by the counselors of that community, and then
ultimately goes to city council for another vote. So the
whole process is quite political. In Ontario, we do have
a recourse to the political process, which is the Ontario
Land Tribunal, but rezonings generally are very very adversarial often
and very political. So as much as possible, we try
(03:31):
to lean into where these permissions already exist so that
we could do a more kind of like technical what
we call a site plan control process with the city
and avoid the politics of rezonings.
Speaker 2 (03:41):
So I've been told some statistics like two decades ago
you had to submit four studies, today it's twenty four studies,
that it takes twice or three times as long to
actually get a project approved as it does to actually
build it. That I heard one person tell me that
in there are six different zoning designations, and in Toronto,
(04:03):
a loonan, there's one hundred and ninety. Are any of
those things true?
Speaker 5 (04:05):
Yeah, so the one hundred and nine, I don't know
the specific number. It is true that Japan zones nationally
and they have a small number of zones that apply
country wide and they're fairly kind of predictable and certain.
Speaker 4 (04:17):
There is a lot more variance in Toronto. Not only
do we have like many more zones in the zoning
by law, but then again, every site then requires its
own specific rezoning and a specific a site specific zoning
by law is issued for that site. So it ends
up being that every site effectively has its own zoning
by law.
Speaker 3 (04:34):
It is certainly a true site has its own zoning
by law.
Speaker 4 (04:38):
When you rezone a site, the output of that process
is what's called a site specific zoning by law. So
it's basically the city amending the by law for your
property to make it be able to be built, you know,
out of conformity with the rest with the rest of
the zoning by law. It is true that the number
of reports has exploded over the last ten to twenty years.
We have I think there was a study among OECD
(05:00):
we're like the second most slowest in terms of getting
through these approvals or ententitement processes to building permits. So
we have made it extremely owned er. It's extremely slow,
extremely uncertain, and extremely political, and for that reason we
as much as possible. I say as much as possible,
because many in many cases we can't avoid a zoning
vile amendment, but as much as possible we try to
(05:21):
avoid them.
Speaker 2 (05:22):
You know, you've got a fair amount of experience. You've
got a b social science, economics and public policy. You've
been a project manager, senior project manager, development manager, a
founder of a company, now a.
Speaker 3 (05:34):
Partner with Toronto Centers.
Speaker 2 (05:35):
You've got a lot of experience in the development industry
and in politics. Why why is there a benefit to
all this process that we put in place. I don't.
Speaker 4 (05:46):
I mean, I think there are very rapidly diminishing returns.
So I think, you know, you want some process so
that someone can't just build anything that doesn't properly align.
You know, for example, what city service is when they
build new housing. You do need some process because whenever
you're building in a city, you have to contemplate how
it ties into the rest of the city. I think
we've gone so far beyond kind of like a practical
(06:08):
desirable process that we're now well into the realm of
just kind of like make work job for for city departments.
And we could probably cut this down by fifty percent
without any real negative effects to how we build our cities,
And in fact, I think we'd have many positive effects
we build more housing, and we maybe would have less
of a housing crisis.
Speaker 3 (06:24):
We're in this housing crisis.
Speaker 2 (06:25):
Same as c says we need to build three point
five million extra homes, We've got lots of governments saying
we need to build extra homes. We got the federal government,
the provincial government talking about it. If you think that
we could cut it down by fifty percent and actually
get an improved situation, why hasn't that happened? Like, why
hasn't it happened?
Speaker 4 (06:42):
It's a good question. I think that at all levels
of government, the action is not matching the rhetoric. And
of course we have different parties in power at different
levels of government. I think they all share much of
this blame. Where this issue has been at least the
priority since twenty eighteen, it's kind of like risen to
the level of top three shoes provincially in the over
maybe over the last five years, has become a top
(07:03):
issue federally, but we're not seeing we're not seeing the
action needed, and kind of like the proof is in
the pudding. We're actually seeing more new housing construction coming
online this year than we did last year, and if
this kind continues, we'll have even less next year than
we're seeing this year. So I think this problem, despite
all the rhetoric, but despite everybody saying we need to
solve this, this problem is actually get much worse in
the short term.
Speaker 2 (07:24):
You comment about the cities involving major streets and avenues
policies which are helping to unlock as a rate mid
rise density, can you.
Speaker 3 (07:31):
Explain what that is?
Speaker 4 (07:33):
Absolutely so. One thing I like to say is that
John Torrey didn't do much of anything in his first
two terms. In his third term, he kind of woke up,
and maybe it was because he didn't have to worry
about getting re elected so he could do more of
what he felt was needed. He implemented something called the
Housing Action Plan, and within the Housing Action there are
a bunch of different initiatives, but two of the big
initiatives were upsoting more of Toronto's major streets and avenues
(07:56):
for mid rise development. This, unfortunately was about two weeks
before he then resigned, so some of the execution against
that plan has been quite slow, and I would say
imperfect to put it. Finally, but it is true that
more Toronto streets are being up zoned for more again
as of right, midrise development.
Speaker 2 (08:14):
And that mid rises up to what size, what height?
Speaker 4 (08:18):
Toronto defines mid rises up to eleven stories. One of
these policies, the Major Streets policy, is specifically for six
story midrise and I would say this is one of
the bigger changes to Toronto's official planning zoning by law,
where many of these major streets, and you can think
of a major street as a street that has maybe
a bus route on it will allow for six story
apartment buildings. And then the avenues policy is a little
(08:38):
bit it's kind of like a beefier version of that,
where on some more central versions of these streets you
might have midrise development eight, nine, and even up to
eleven stories.
Speaker 2 (08:48):
There's this big controversy about six plexes, and I understand
that the city of Toronto voted in favor of it,
the old City of Toronto, but the other municipalities or
former municipalities that make up of the suburbs surrounding the
old City of Toronto in current City of Toronto voted
against it.
Speaker 3 (09:06):
And it was an interest Tell me, what.
Speaker 4 (09:08):
Do you think of six pucks Is. I think we
should allow for more what we call gentle intentification in neighborhoods.
This is the way that cities have historically evolved and
grown throughout history until aggressive zoning was introduced sometime in
the seventies. I think it's a good move, and I
think it's too bad that we only had nine out
of twenty five wards opt into these permissions. And going
(09:29):
back to the point about the action not matching the rhetoric,
Olivia Choue said that housing was a priority when she
ran for the mayor election. She has strong mayor of powers.
She could have ensured that this was a city wide
up zoning and she didn't do that. So I think, again,
we're not seeing the action matching the words.
Speaker 2 (09:45):
We're going to take a break for some messages and
come back in just two minutes with our guest Chris Spoke,
who is a developer a partner with a development company
real estate developm company in Toronto called Toronto Standard.
Speaker 3 (09:55):
He specializes in.
Speaker 2 (09:57):
Mid rise rental development and he's got I had a
really interesting point of view about some of the problems
we've got and what the solutions are and his company's
focus on midrise.
Speaker 6 (10:07):
Developments stream us live at SAGA nine six am dot CA.
Speaker 2 (10:26):
Well, come back everyone to the Brian Crimey Radio or
We're talking housing and we're talking with Chris Spoke, who
is a developer with Toronto's Standard, a mid rise rental
focus development company in the Greater Toronto area. He's also
a writer. You publish a regular newsletter. Tell me about
your writing and your newsletter, sir.
Speaker 4 (10:47):
That's right, Yeah, I published a regular newsletter. I'm also
a regular contributor to The Hub, where I write almost
exclusively about housing policy. So I'm kind of the rare
developer who started in policy advocacy and ended up in development,
where as many developers end up in policy advocacy. So
this is an issue that I think is very important.
It's starting to be recognized as such, but again we're
not seeing the action to match. So as much as possible,
(11:10):
I like to add my two cents to the public record.
Speaker 2 (11:12):
Why did you get so involved in advocacy?
Speaker 4 (11:15):
You know, I worked in technology in my twenties. I
worked for software agencies for software startups and just noticed
that housing prices were rising in Toronto. Didn't really understand
how cities and housing development was regulated and how it worked,
and kind of went down this rabbit hole and realized
that you know something that is unique action to the
commonwealth and is especially true in Ontario and Toronto. We
(11:37):
constrain our housing supply to a very large degree, much
more than the rest of the world, and naturally the
outcome of strong demand and low supply is rising prices.
And I thought that was an issue that required more attention.
It's since gotten more attention, but I still think it's
underrated in terms of its importance.
Speaker 2 (11:54):
Well, I appreciate you you writing and the comments that
you've made on LinkedIn that I've read, and I appreciate
you coming with us tonight and your advocacy. Your number
two reason why you focus on mid rice was a
little bit interesting, and I wonder if you explain it
loading space requirements type G loading spaces kick in past
the thirty unit mark.
Speaker 3 (12:15):
What the heck is that explain question? Please?
Speaker 4 (12:18):
So in the city of Toronto, and I'm gonna speak
about Toronto just because that's where we're most active, but
this is true of most cities. City garbage trucks are
very big trucks, and when you build a rental building,
certainly one that has more than thirty units. The city
requires that you fit a large loading area that's called
a type G loading area that can fit one of
these big trucks that is tall enough for it to
lift a bin above and kind of like drop the
(12:41):
garbage into its back that could turn around on your
property so that it doesn't have to reverse kind of
backwards out of your property, and it ends up taking
a very large share of your ground floors, both in
terms of the law area but also the ground floor
of the building itself for these loading areas. If you
think about older buildings that were built in Toronto, this
was not the case. We had a lot more of
this garbage handling, either on the street or on the side.
(13:03):
You had private pick up with smaller garbage trucks. But
in Toronto above the thirty unit mark, there's now some
inflexibility between thirty and sixty units, but you have to
build these really large garbage rooms. And one kind of
like side comment on this, A lot of people complain
about the loss of fine grain major street retail when
neighborhoods are redeveloped from mid rise condo and the reason
for that. One big reason for that is because so
(13:25):
much of that ground floor is now given to these
city requirements, including these ted g loading areas, that there's
no space left for as much retail as was being replaced.
Speaker 3 (13:33):
Is there a better solution?
Speaker 4 (13:35):
Yeah, I think so. I think you know one very
interesting solution. It would take kind of like a city
wide effort. You see this in a lot of European
cities and a lot of Southeast Asian cities where you
have communal garbage bins. So people who live in apartment
buildings go to city own and city operated garbage bins
along the street. And these could be nicely done so
that they're kind of like mostly below grade, but with
(13:56):
like a little hatch above grade. And basically it's functions
as a city utility like we do with water and
with electricity. So you have daily pickup of these city
owned communal garbage bins, and the garbage doesn't need to
happen on site on a building by building basis. But
it's kind of like a neighborhood thing.
Speaker 2 (14:14):
What about just backing in and backing out? Why can't
they do like a three point turn?
Speaker 4 (14:19):
You could do that. I mean, you know, what I'm
describing is probably the highest lift effort thing. Another thing
is you get you can allow more of that. You know,
there's some safety issues. I think a big thing that's
worth exploring is just smaller garbage trucks as our cities
get more dense. If you think about cities in Europe again,
in Southeast Asia, Tokyo, we talked about Japan. Fire trucks,
ambulances and garbage trucks are all much smaller and they're
(14:41):
more conducive to kind of like a fine grain urban life. Well,
we have are really suburban and even rural sized garbage
trucks that are trying to fit into tight urban fabric.
And often what it means is is these on economic requirements.
Speaker 2 (14:54):
I heard a complaint about suburban streets in Peel that
they're two because it was the fire trucks that had
to be able to do a three point turn maximum
three point turn in a suburban street. And because of that,
the suburban streets became so big they were sort of
unwelcoming to people.
Speaker 3 (15:12):
Also so wide that people you know, sped on them.
Speaker 2 (15:15):
So are some of our requirements for municipal activities actually
harming our built environment?
Speaker 4 (15:23):
I think I think they absolutely are if you think
about the sort of cities that you like to visit
on vacation that are most charming, they don't have these
like six lane streets, these major streets. I think narrow
streets just feel better. They're more conducive to urban street life,
to retail street life. And it is true, it is
these these these fire chief requirements, these garbage waste management requirements,
they all lead to, you know, everybody kind of looking
(15:45):
out for their interest, but nobody thinking about the impact
on the city as a whole. And and that's how
we kind of end up where we are.
Speaker 2 (15:52):
Also heard that some people are complaining about the need
for two fire escapes and that lots of municipalities, lots
of regions, jurisdictions around the world have gotten rid of that,
that that's an old sort of requirement.
Speaker 3 (16:04):
Tell me about that.
Speaker 4 (16:05):
Yeah, so this is very relevant at our scale where
if you're building a high rise tower, the idea of
having two means of egress, two exits stairwells is not
a big deal. On again, tight mid rise urban lots,
it is a big deal. And so in Ontario, if
you build a multi unit building that's more than two stories,
you need two means of egress. These are the most
aggressive rules in the world outside of Uganda, whereas most
(16:29):
of the.
Speaker 3 (16:29):
World alive inside of Uganda. Thank you for doing that.
Speaker 4 (16:32):
Uganda is the only country in the world that has
more aggressive egress requirements than Ontario does. So, you know,
as an example, something that's kind of like not too
far off. In New York City or Seattle, you could
build a six story building with a single means of egress.
In most of Europe you can go into the teens
in terms of stories with a single means of egress.
And when you're talking about buildings in Ontario, if you
(16:54):
build a four story or taller building, they have to
be sprinklered. These are actually very fire safe buildings. Most
fire deaths and most fires actually in real estate happen
in stick built, low rise detached housing. It's very rare
that a sprinkler building has any real fires or any
real consequence of fires. So these, again, these are rules
that have been introduced at a time when we have
(17:15):
the materials technology that we had today. We did have
sprinkler systems that we had today, And the only reason
they stay on the books as far as I can tell,
is that it's easier to just kind of maintain the
status quote than to do things differently.
Speaker 3 (17:26):
Fascinating.
Speaker 2 (17:26):
And you've talked about how entitlements are a constraint and
that you try to stay away from them, needing to
get new zoning BiLaw amendments, how loading space requirements for
garbage are critical, and we also talked about about fire
and the size of roads. The third one you talked
about is construction systems, and you say that you.
Speaker 3 (17:46):
Like stick frame up to six stories.
Speaker 2 (17:48):
I've heard a lot about about wood, about stick, about
about mass timber. Tell me about about mass timber, stick
versus concrete.
Speaker 4 (17:57):
Yeah, so when we're talking about buildings up to six
stories and us, you know, most recently it's been a
couple of four story buildings, stick stick frame is the
most cost effective way to build in Canada. We have
a lot of wood, we have a lot of trades
that are very familiar with framing in wood, and it's
and it's just the cheapest, the cheapest way to build.
Where construction gets really expensive is when you have to
do board in place, concrete, form work and that sort
(18:20):
of thing. So we try to avoid that as much
as possible. One of our you know, it's not exactly
a secret sauce. These These are kind of like well
known construction systems. But one of the ways in which
we make our development performance work is by staying away
from cast in place concrete. So we like, we like
wood frame up to six stories. If we're at seven
eight stories, we like a hybrid system combining could form steel,
(18:41):
which is kind of like a light gauge steel with
pre cast concrete floors and shafts and uh and again
just avoiding cast in place concrete and form work.
Speaker 2 (18:50):
Now I'm told that you can actually do wood far
higher than six stories, but maybe our regulations are problem
But in reality you could is that true?
Speaker 4 (18:57):
That's right, and you could go. I think the Archair
Building Code is updated to allow for mass timber up
to eighteen stories. So mass timber is a much heavier
duty version of wood. When I say stick frame, i'm
talking about you know, the two by fours and the
four by fours that everybody's familiar with. Mass timber has
a lot more structural support for a much higher structural load.
(19:18):
We're not very familiar with mass timber systems. There aren't
many mass timber suppliers. There's a big push actually from
the federal government through its Building Canada Homes Agency that's
kind of spinning up right now to push for more
mass timber construction. Our thinking, having done quite a bit
of research in this, is that we need more scale
among the suppliers to get the costs down to be
as competitive as let's say, cold form steel. But we
(19:40):
do have some friends, for example in the industry in
Toronto that are playing around and building with mass timber.
Speaker 2 (19:44):
Now, some of the comments I hear is that people
like concrete more, they pay more for it. They will
pay more rent for it because of noise, because it's
more stable, because of concerns about fire.
Speaker 4 (19:53):
What's your sense, Yeah, I think noise genuation is a
very big consideration, especially for rental where you have people
turning over let's say every two or three years, you
want to make sure that every new person does not
get turned off by noise coming through the units. So again,
on our slightly taller mid riise, we do precast concrete,
so it is a concrete floor slab. It's just bored
(20:14):
in a factory and then trucked on site. It's not
cast on site, but it still has the same noise
to tenuation properties as cast and place concrete. And then
when we're doing when we're doing wood frame buildings and
wood frame floors, typically what we do is a level
of what we call topping, which is a gyp cree.
It's a mix of gypsum board and concrete, and then
you do a couple of inches of that on top
(20:34):
of your flooring system, and you combine a few other
materials to attenuate noise as much as possible. Cast in
place concrete performs very well, it's really the cost that
kill us.
Speaker 2 (20:44):
The fourth issue you talked about was absorption risk, and
I guess this one's a little bit obvious, but you
suggested that obviously, the smaller you can absorb it tell
me why absorption is a big issue for a rental
housing development.
Speaker 4 (20:56):
Yeah, So rental housing development happens on these very long
and pt tracted timelines, and one of the big reasons
for that is the entitement process that we talked about.
And the longer this process is, the more vulnerable you
are to changes in the macro climate. So if there's
some change to immigration policy, for example, when you're halfway
through your entitlement process, that's something that you might not
have underwritten for when you were buying the site, you know,
(21:18):
a couple of years prior. So as much as possible
we try to tighten that timeline. We try to avoid rezonings,
We try to build efficiently and quickly, and we try
to do these smaller buildings that could lease up fast
there so that we have some degree of predictability on
the macro environment. I think when you're building four hundred,
five hundred and six hundred unit kind of high rise towers,
(21:38):
there's no way to reliably forecast what the immigration policy
will be, what the interest rate environment will be, and
and a lot of a lot of developers that get
very rich, they just you know, they just had lucky timing.
And a lot of developers that blow up they had
unlucky timing. And as much as possible, we try not
to leave these things up to luck. We try to
tighten the process up.
Speaker 2 (21:57):
You commented that Charles's housing market team to stagnate. New
condos can't launch, and recently completed condos are leaving owners underwater. Meanwhile,
high rise projects are rarely able to make the switch
to purpose built rental because construction costs are too high.
So what are you suggesting everyone start building what you're.
Speaker 4 (22:15):
Building, so we're what we are doing now works for
this moment in time, where development charges are what they are,
where interest rates are what they are, and where rental
financing programs are where they are. I think, I think
to get back to a world where high rise cast
and place concrete condominium projects work, I think a few
(22:37):
things are gonna have to change. I think we're gonna
have to have lower interest costs or interest rates. I
think we're gonna have lower construction costs, We're gonna have
to have lower development charges, and we might need to
do something like ending the ban on foreign buyers. We're
not condo developers. We don't sell condo But this is
kind of the feedback we got from our friends in
the condo world, where nobody's really launching a sales center
these days in the Greater Toronto area because condos it's
(22:59):
costing more to build them than you could sell them
for these days.
Speaker 2 (23:02):
So I was told that there was something like eighty
cond of medium projects that were put on hold in
the last year eighteen months.
Speaker 3 (23:10):
If you were one of those.
Speaker 2 (23:11):
Condo builders, prospective condo builders, what would you do you're
saying that it's difficult to convert to purpose build rental,
So what do you do.
Speaker 4 (23:18):
A love then we're trying to figure that out. I
think the challenges with converting these projects the purpose build
rental is their construction costs really require a higher revenue number,
which really comes from condo. They often provide more parking
than is optimal for rental projects, and there might even
be in parts of the city that are not great
for rental. And even if you can line all those
(23:39):
things up so that it does work for rental on
a high rise project, the amount of equity required for
rental project is much higher than it is for condo
and there are only so many pension plans that you
could hit up for equity funding for these projects. So
I think a lot of these developers are just gonna
be stuck for a long time. A lot of them
their companies are going to have to do continuous layoffs,
and I think a lot of them don't make it
out alive to the end of this cycle. I think
(24:01):
we're going to have a major kind of correction, you know,
to put it nicely.
Speaker 3 (24:05):
A major correction.
Speaker 2 (24:07):
I had a gentleman on the president of Rescom, who
said that he was worried about one hundred and fifty
to two hundred thousand layoffs and one and a half
percent decline in GDP.
Speaker 3 (24:15):
What do you think of that?
Speaker 4 (24:16):
Yeah, I think housing development is a major part of
the economy. It's probably bigger than it should be, and
I think that's right. It leaves us very vulnerable to
these cycles. And aside from the impact on economic growth,
the impact on municipal revenues. So much municipal revenue comes
from development charges, comes from land transfer taxes. All these
things are going to take major hits as this industry
(24:38):
goes through a slump. I think a protracted slump. And
I think, you know, many people are kind of head
in the ground sort of thing and not really seeing
how bad this could get. I think I think that
might have been Richard Lyle. I think he's exactly right.
Speaker 3 (24:50):
Think what is that one?
Speaker 1 (24:51):
Back in two minutes, No Radio, No Problem stream is
live on SUG ninety sixty am dot c.
Speaker 2 (25:13):
Holcome back everyone to the Brian Cromby Radio or I'm
having a I'm really enjoying this conversation with Chris Folk,
who is a real estate developer in the Toronto, where
he's also an advocate.
Speaker 3 (25:23):
In a lot of policy issues.
Speaker 2 (25:25):
We've been having a good conversation about how he's focused
on mid rise rental accommodation. He talks about the condo
business being in a terrible state right now, and that
condo developers that are trying to convert to purpose built
rental are challenged by high construction costs. He talks about
the time of absorption, and he's gone through in detail
a bunch of the challenges in regards to entitlements and building,
(25:46):
the zoning regulations and building rules and regulations, building standards,
absorption in time period, et cetera. Chris, you've been pretty
explicit and pretty frank, and a lot of the challenges
that you've outlined for the housing industry right now.
Speaker 3 (26:03):
If you got to sit down with the.
Speaker 2 (26:05):
Premiere, what would you tell him, what would you recommend?
Speaker 3 (26:09):
What should he do?
Speaker 4 (26:11):
I would suggest that he deep that he reached deep
into his conservative roots and think about deregulating and cutting taxes. This,
you know, should be right up his alley. But I
don't think we've seen enough of that. So on the
taxi side of things, development charges, I think I've gotten
way too high. They maybe just barely made sense when
interest rates were zero and when the cost of capital
was zero. They certainly don't make sense now. I think
(26:32):
we need a full reset. And then on the regulation side,
you know, there are things we could do to update
our building code, including on these egress requirements, to make
it easier, cheaper and faster to build. And there's a
lot of power that the province has over munistalities to
allow for more entitled land in a faster process. I
think we've seen some baby steps in this direction, but
(26:52):
seven years into his mandate, I don't think. I don't
think he's delivering. You know, he got elected in twenty
eighteen saying that he was going to make housing more affordable.
Housing is much less affordable, and not only that, but
the whole industry is blowing up. So I think that
he has the levers available to him. I think he
has the ideological background that should be consistent with the
deregulatory agenda and a tax putting agenda. I think he
(27:13):
just needs to do it.
Speaker 2 (27:14):
You know. I think it was about two and a
half years ago that he came out with his Housing
Affordability Task Force that had something like fifty seven recommendations,
and I read it with it only like five or
six of them have actually been implemented.
Speaker 4 (27:25):
Why, you know, it's the politics of housing. Housing is
very tricky because you know, for for every person that's
priced out of the market, someone has done very well
in their home equity. For every person that can move
into a neighborhood, there's someone else in the neighborhood who
enjoys not having a new shadow cast on their property.
So you have the haves and have nots, and often
(27:45):
the haves just vote in greater numbers. They're older, the homeowners,
they're more established, and they're more reliable voters. I think
this is a big kind of problem with Western democracy
where you're having this problem kind of play out not
just in Toronto and the GTA, but actually across the
Western world and certainly across the Commonwealth. So ultimately, you know,
(28:05):
this is why I said I was a little bit
optimistic about John Tory's third term. He thought that was
going to be his last term. And you can maybe
only do what you should do when you don't have
to consider re election.
Speaker 3 (28:17):
Chris, you graduated in twenty thirteen.
Speaker 2 (28:19):
I understand I graduated just a few years earlier than you.
Speaker 3 (28:24):
I really worry that there's an.
Speaker 2 (28:25):
Issue of intergenerational inequity right now. My generation have left
your generation with unaffordable housing, a huge amount of debt,
lack of infrastructure and infrastructure deficit, climate change issues, you know,
et cetera, et cetera. Some people think that intergenerational inequity
(28:46):
could lead to civil strife because people like you, your
age group, my kids are going to get so upset,
so pissed off, that they take to the streets, they
start demanding radical change.
Speaker 3 (28:58):
What's your sense of things.
Speaker 4 (29:00):
I think that's right. I think when you kind of
price out a generation from ownership, from the ability to
grow and start a family, from the ability to kind
of see upward mobility, or at least the same upward
mobility as their parents, I think there's a lot of resentment.
I'm clearly, you know, as a real estate developer, a
committed capitalist, but I think it's no wonder that you
see a lot of younger people turning to socialism and
this kind of like anti landlord version of socialism. Mendani
(29:23):
in New York will likely be mayor, you know, a
committed socialist candidate and I think a big part of
that is you have a downwardly mobile generation that is
downwardly mobile in large part because of policy choices made
by their parents and grandparents. So I think that's exactly right,
and I think that this needs to be taken very seriously.
Speaker 3 (29:40):
Downwardly mobile.
Speaker 2 (29:41):
Okay, so if you sat down with not doug Ford
Bolivia Chow, what would you tell her?
Speaker 4 (29:47):
You know, the first thing I would tell her is
that she needs to get over her aversion to using
these strong mayor powers. I think she has an ideological,
you know, commitment to not using them. Ultimately, she was
elected by the city as a whole, and she needs
to act as a representative of the city as a
whole through these powers that were given to her by
the province. She could again have made the six plex
permissions citywide. There's a lot more she can do. She
(30:10):
selected a new chief planner. There's a lot more she
could do with the new chief planner to speed up
these processes, to entitle more land for gential intensification, to
make real estate development more feasible, and ultimately to develop
and deliver more housing. She doesn't seem to be particularly
committed to that and again, I don't know if it's
a generational thing. I don't know if it's because she
prefers some of the more ceremonial aspects of her job.
But we're not seeing the focus that the issue deserves.
Speaker 3 (30:33):
Chris.
Speaker 2 (30:33):
If people are intrigued by this conversation want to follow you,
what's the best way for them to get your newsletter
and follow?
Speaker 4 (30:39):
Yeah, so my newsletters at Chrisfolk dot substack dot com.
I'm fairly active on Twitter at Chris Folk, and our
company website is Toronto Standard do coo and I talk
about this stuff all day every day, so happy to
have people join along.
Speaker 2 (30:51):
If I or some other people want to go check
out one of your recent developments to take a look
at a nice rental property, where should we go?
Speaker 4 (30:58):
So the most recent one is a small four story
stick frame building that we just completed at Windermere and
run a Need. We've got a really cool ice cream
shop as our commercial ten on the ground floor, Good
Gang ice Cream, which might just be the best I
think ice cream in West Toronto. So that's at six
five six in Net and they could come on come
on down, Chris.
Speaker 3 (31:15):
I really appreciate you joining us tonight. Thanks so much.
Speaker 4 (31:17):
Thank you.
Speaker 2 (31:18):
That's our show for tonight, everybody. Thank you for joining.
I remind you on mine every mond you through Friday
at six o'clock on nine to sixty am. You can
stream me online at Triple W SAGA nine sixty am
dot cl My podcast and videos are on my website
Briancromby dot com. As soon as the radio show goes
to air, I put them up on YouTube, on social media,
on podcast servers.
Speaker 3 (31:34):
You know, I'm everywhere, so you can grab.
Speaker 2 (31:36):
Me because I try to, like, you know, forget about
all these regulations that limit my exposure. I think there's
got some really interesting suggestions and comments to make. I
think that his comments in regards to entitlements, you know,
the zoning rules have just gone berserk in I think
the development fees going up by one thousand percent and
over in just a decade in the Toronto area. I
(31:58):
think that this about huge layoffs coming in the building
industry or a big risk and the impact on the economy.
Speaker 3 (32:04):
I think that some of the building regulations need to
be seriously thought about.
Speaker 2 (32:07):
It in regards to garbage truck and loading and size
of width of roads and a number of egress, you.
Speaker 3 (32:14):
Know, fire escapes, et cetera.
Speaker 2 (32:16):
I think, you know, Chris's comments about generational inequity and
downward mobility are pretty scary, and we got to think
about that.
Speaker 3 (32:24):
And I think that our generation have got to.
Speaker 2 (32:25):
Give some some deep thought to the community that we're
leaving to Chris and his and his and his age group.
Speaker 3 (32:34):
So thanks Chris very much. I really appreciate it.
Speaker 4 (32:36):
Thank you for having me.
Speaker 2 (32:37):
We're going to take a final break and come back
with some concluding comments in just two minutes.
Speaker 6 (32:41):
To stay with us, everybody, stream us live at SAGA nine
six am dot C.
Speaker 3 (33:00):
Welcome back everyone to the Brian Crombie Radio Hour.
Speaker 2 (33:02):
I have just done two interviews two experts in.
Speaker 3 (33:06):
The housing industry.
Speaker 2 (33:08):
Al ed ibuwas a deputy Chief economist of AC and
Richard Lyle, the head of the Residential Construction Council of Ontario.
Both of them have talked about how this is a crisis,
and I think that we've got to really give some
detailed thought to how bad this crisis is, how a.
Speaker 3 (33:27):
Bust boom boom bust.
Speaker 2 (33:29):
Boom scenario can can destroy a lot of people's lives.
I think that we've got a situation where you know,
we have this intergenerational inequity where it's completely unaffordable for
young people to afford housing. And then at the same time,
we've got a whole bunch of people that have built
up a big net worth in housing that probably they
(33:52):
should have been investing in in other things to ensure
their retirement.
Speaker 3 (33:57):
And if we have a bust, they're gonna lose money.
Speaker 2 (34:01):
And particularly if they entered into home equity lines of
credit or mortgages or something like that to maximize the
leverage on overinflated housing, they could end up having a problem.
So it hurts people on the boom and it hurts
people on the bus, And we got to realize that
as we go through this, and it's the same as
almost any other boom bust cycle where it can harm people,
and housing should go up by GDP.
Speaker 3 (34:25):
It shouldn't be an investment.
Speaker 2 (34:26):
It should be something that is, if not a right,
damn close to a right, and should be the same
percentage of income over time or the same multiple income
over time, the same percentage from a mortgage carrying standpoint,
and the fame multiple from a total price standpoint, from
generation to generation, from year to year from decade to decade.
(34:48):
There's no justification for it to increase at dramatically higher
rates other than maybe if it's you know, on water
or uniquely positioned at Maine and Maine or Bay and
King or something like that. So yes, location does warrant
some appreciation above what average appreciation would be, but.
Speaker 3 (35:08):
General housing shouldn't.
Speaker 2 (35:10):
We should make enough of it such that it goes
up by GDP. So I've got a ten point program
that I want to propose that I think we need
to address because I think we need politicians and we
need the public to realize that we in a crisis situation.
And we really have gone from two years ago FOMO
fear of missing outsets that everyone was overbidding and prices
were booming and prices got to a high to today FOOP,
(35:33):
where it's a fear.
Speaker 3 (35:34):
Of overpain and no one is willing to.
Speaker 2 (35:37):
Pay.
Speaker 3 (35:38):
And as Richard Lyle talked about.
Speaker 2 (35:39):
He's worried that we're going to have hundreds of thousands
of layoffs leading to a one point five percent to
two percent decline in GDP. We can't risk that. We
can't risk the layoffs, we can't risk the unemployment. We
can't risk the devastation to our economy.
Speaker 3 (35:53):
We can't risk the decline to GDP. We can't risk what's.
Speaker 2 (35:56):
Going to ultimately be the result of that, which is
going to be another boom in a couple of years
because there's no housing available and our young people become
even more sentenced to a life without the Canadian dream
of owning a house. It's wrong and we need to
address it. So here's my ten point plan. First of all,
(36:18):
I think we need to change the whole attitude of
government and particularly people in city planning and city councils
and planning committees, et cetera, from the Planning department attitude
that's been we want to stop development in the past,
to more like the Economic Development department, which is we
want to attract development to our cities, and they need
(36:38):
to become customer focus. They need to become focused on
what we can do to build great cities rather than
what we can do to stop development from happening. So
I think we need to have a.
Speaker 3 (36:46):
Complete changed attitude.
Speaker 2 (36:48):
And if we believe that this crisis is happening and
it's going to cause lafts, it's going to cause devastation,
it's going to cause drop in GDP. It's going to
cause housing and affordability, and we need to have an
attention to it like we did in the pandemic, like
we are I think in regards to the threat of
Trump tariffs, then we'll take the kind of action that
we need to take. So Number one, change the whole
attitude within municipal politicians and with the missile planning departments
(37:11):
to be more like the economic development. We want to
attract building. We want to attract development rather than we
want to push it away. Number two, development fees should
go to zero right away.
Speaker 3 (37:24):
A couple of years from now.
Speaker 2 (37:25):
If you want to increase them again, we can talk
about it, but for now, in this crisis scenario, they
should go to zero.
Speaker 3 (37:31):
And I don't think there's any other choice.
Speaker 2 (37:34):
We need to take that one to one hundred and
fifty thousand dollars, which is equal to the kind of
down payment that a lot of people would pay. This
unbelievable growth pays for growth. Incorrect belief that developers pay
for the development fees, not the end consumer. This unbelievably
probably the most progressive tax. As Richard Lawlas talked about
(37:56):
a syntax comparable to cigarettes or alcohol, which is discouraging
people to consume, which.
Speaker 3 (38:03):
Is not what we should be having.
Speaker 2 (38:04):
On housing, we need to eliminate it completely right away.
Speaker 3 (38:08):
Zero.
Speaker 2 (38:09):
Do we need to come up with another way of
funding infrastructure, No question, And I think it's the way
that the United States funds it, whether the whole society
pays for it by way of municipal tax bonds, or
whether it's just funded through property taxes, or whether it's
funded by infrastructure to come from the provincial or federal government. Yes,
we need to come up with a different way. But
(38:30):
to have these development fees that have gone up by
one thousand percent over the course of the last decade,
that's creating three billion dollars worth of a surplus for
the Sea of Toronto. That is regressive that the people
that can least afford it are asked to pay for it.
We need to get rid of it, and rid of.
Speaker 3 (38:46):
It right away, zero, right away. Across the board.
Speaker 2 (38:49):
Number three GST HST on housing. You know we put
in this consumption tax. You know Brian Morrooney did back
what it forty years ago and it may have made
sense to be as broad based and across the board
as possible, but we've taken it off and oil at
different times.
Speaker 3 (39:09):
We've taken it off.
Speaker 2 (39:10):
Different items that have been deemed strategic to our economy
and important to people. We need to take it off
of housing right now. If we want people to be
building housing, if we want people to be buying housing,
we need to take it off right now. You know,
I think that taxation is one of those things that
you increase in good times and you decrease in tough
(39:32):
times Keynesian economics. This is a crisis time. The GST,
the HST, the provincial sales taxes on housing, on all
things that go into housing eliminated right now.
Speaker 3 (39:45):
We're in a crisis situation.
Speaker 2 (39:46):
Number four, provincial rules should be imposed that effectively provide
as of right housing. I'm doing development in Texas. Everyone
in Texas has talked about this new Senate build that
effectively means that you've got a zoning within a city
that's over one hundred and fifty thousand population where the
(40:10):
most beneficial density zoning applies across the board. So if
a city has decided that a certain density is appropriate,
they applied it across the board. And I think it's
a simple way of simplifying how many different zoning designations
we have. I think what we need to do is
we need to get rid of a lot of these
rules and regulations that different cities put in place, that
(40:31):
different municipalities put in place, that different wards within municipalities
put in place, and frankly, different councilors and different planning
people in different parts of different wards of different cities
end up putting in place. We need to simplify that.
We need to quicken up the process of getting approval.
It makes no sense that it takes two to three
times as long to get something improved as it does
to build it. We need as a right zoning. I
(40:53):
think that the MTSA rules that were thought about that
dramatically increase density and height around major T transit station
areas and not just down the streets, but in a
circle radius as people thought about walking to major transit.
That's the right type of change, and we need those
types of zonings around major transit station areas. We need
the main street zonings, we need the six plexes as
(41:15):
a right on regular streets. We need to dramatically decrease
the rules and regulations in regards to what you can
build and make it as the right so people can
quicken up the process of getting approvals, submitting building plans,
and getting under construction.
Speaker 3 (41:31):
Number five.
Speaker 2 (41:32):
Inclusion the inclusionary zoning, where we give more affordable development
available to people, is critically important, but it should be
done by way of an incentive, not a disincentive. By
having the inclusionary zoning, the ten percent of the homes
that you want at below market rates being paid for
by the other people in that condo building or apartment
(41:54):
building makes no sense. It's a regressive taxation on the
people that can least afford. It should be something that
is carried by all the society. The bill that was
passed in Florida, which effectively means that if a developer
builds inclusionary zoning, they get a reduction in property tax
for the next twenty years, makes ten of sense because
what that does is it means that all of society
(42:15):
shares the cost of providing inclusionary zoning, not a regressive
taxation on one part. So affordable housing is something we
need to do it, but the way that we've been
enforcing it is wrong and it needs to change.
Speaker 3 (42:30):
Number six.
Speaker 2 (42:31):
I think what we need to do is we need
to think of housing as the best social program out there.
I think that the statistics and this book called Abundance
that's been written in the United States is excellent. What
it does is it shows where we've got increase to
supply of housing home, homelessness goes down dramatically. And so
(42:51):
we've got to take a look at all these progressive people,
these left wing people that say that they want to
decrease homelessness, but come up with all these massive programs
to deal with it.
Speaker 3 (43:01):
The best program is to take them off.
Speaker 2 (43:03):
The street and give them a home, and the best
way to do that is by way of dramatically increasing
supply across the United States. It's been proven in Canada
as well that if you have an increase in housing supply,
you'll have less homeless and so we need to make
that available. Does it need to be affordable, Does it
often need to be social housing? Yes, but we need
to make sure that people have an opportunity to put
(43:27):
a roof over their head. I had one interviewee that
told me that homeless people visit on average emergency wards
one hundred times a year. I don't believe that statistic.
Maybe it's homeless people with mental health issues. I'm not
sure I want to find out, but it makes logical
sense that if you're homeless and you need some care,
if you're cold, if you're hungry, if you need some drugs, medication, etc.
(43:50):
You're going to go to emergency And that is one
of the reasons why.
Speaker 3 (43:53):
Our emergency room waits are too long.
Speaker 2 (43:56):
If we give them a home, I was told it
costs less than one hundred thousand dollars, but if they're
on the street, it costs US an excess of half
a billion half a million dollars. So it's a five
times increase for society to not give them a home.
So let's deal with our homelessness problem by making more
housing available.
Speaker 3 (44:16):
Seven.
Speaker 2 (44:16):
We need CMHC to become more aggressive. This change that
they've taken the amount of debt that they're willing to
finance from ninety five percent down to seventy five percent
and putting the risk on rents.
Speaker 3 (44:26):
On private developers. You know what, they should take some risk.
Speaker 2 (44:29):
But it's not that kind of differential in leverage, because
what's happened is purpose built rental has gone down dramatically
in that regard, and so we need to have CMHC
more aggressive in providing financing and shouldering some of that risk.
The whole idea here was that they were going to
take some risk of the housing leverage, and we need
(44:50):
to have CMTC increase the amount of funds they've got
available and increase the amount of leverage that they're willing
to provide to developers. Number eight, there's been a real
lack of productivity within housing, and I think that's caused
by this plethora of different zoning, the plethora of different
building codes, the lack of modernization of building codes, the changing,
(45:11):
constant changing of building codes, et cetera. We need to
focus on making sure that we've got some consistency and zoning,
consistency in building codes, focused on productivity, less rules and
regulation so that we can become more productive. Why do
we have far smaller housing companies in Canada that don't
(45:31):
have the economies of scale that they would elsewhere in
the world, particularly in the United States.
Speaker 3 (45:35):
We need to think through that. We need to have
the role of AI.
Speaker 2 (45:38):
The role of digital twins, the role of economies of
scale like we've got in every other industry in the
world apply to housing and figure out how we can
do that. Number nine tariffs reciprocal terraffs, tariffs in the
United States, tariffs on furniture, tariffs on HVAC, tariffs on
electrical equipment. We've got to solve this tariff for We
got to solve it for the economy in general, but
(45:59):
we got to solve it in housing particularly. And the
fact that the Americans are taxing our lumber at outrageous
amounts that's that their housing is going to become more
expensive doesn't make sense. And the fact that we then
put on reciprocal tariffs on aluminum, steel, mechanical equipment, electrical
equipment that is coming into Canada that we need for
housing makes no sense. We need to solve that problem.
(46:19):
And Number ten, we need more people in the housing industry.
We need more skilled laborers.
Speaker 3 (46:26):
We need to do training, we need to do apprenticeship.
We need to think about immigration.
Speaker 2 (46:30):
That attracts people that have got those skills such that
we can bring them to Canada to work. I'm really
worried about what Richard Loles talked about about mass layoffs
and then what do those people do. They move into
other industries, they move into other geographies, and we can
never get them back.
Speaker 3 (46:43):
We need to be thinking.
Speaker 2 (46:44):
About having the right kind of employment in housing given
this crisis scenario, that we would have for doctors, that
we would have, for nurses, that we would have for
people with stem experience, that people would have for quantum computing,
you know areas of industry that are important. We need
to have a labor market strategy. We need to have
a labor market strategy for housing. So crisis situation we
(47:07):
need to acknowledge and admit and put an all government
and all business industry effort into solving. We need to
have an economic development attitude. We need to have an
elimination of development fees. We need to have an elimination of.
Speaker 3 (47:20):
The GST on housing. We need to think.
Speaker 2 (47:22):
About provincial rules rather than a plethora of rules in
all municipalities. We need to think about market housing affordable
housing from all of society standpoint rather than the inclusionary
zoning that.
Speaker 3 (47:35):
We've had in the past. We need to get.
Speaker 2 (47:37):
Rid of homelessness by providing or housing and make housing
or right. We need to have CMAC and government support
housing with more financing and higher leverage.
Speaker 3 (47:44):
We need to have.
Speaker 2 (47:45):
Productivity orientation to housing and thinking about economies of scale.
We need to eliminate tear us on the inputs to housing,
and we need to have a labor market strategy for
our housing. That's my ten point plan to solve the
housing crisis. But the most important thing, so the old
thing about draining the swamp, is understanding you're in one.
We've got to understand where we are in a housing crisis.
(48:07):
We've had a boom, We're having a bus. We're going
to end up having another boom. That's not the way
to manage an industry or let alone something that's so
and critically important to our economy and critically important to
all of us, making sure that we don't have this
intergenerational inequity such that people my age have huge net
worth in their homes and people my kids age can
never afford a home.
Speaker 3 (48:27):
It's just not fair, it's just not right. We need
to address it right now.
Speaker 2 (48:32):
We need to take attention to this crisis that is
at our doorstep and address it.
Speaker 3 (48:36):
Thanks for joining, Thank you for listening. I'm Brian Cromby.
Speaker 2 (48:39):
Brian Cromby Radio Hour on every night six o'clock nine
to sixty am. You can stream you online at Triple
WAGA nine sixty dot You can get on my podcast
videos on my website Briancromby dot com, on YouTube channel,
on social media, on podcasts.
Speaker 1 (48:50):
Thanks goodding, No Radio, No Problem. Stream is live on
Sagay nine c a M dot c A
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