Tackling Canada’s housing crisis: How the federal government can build at scale now

This webinar is part of the “Housing as essential social infrastructure” series.

Canada needs at least 4.4 million affordable homes – including three million deeply affordable homes for very low- and low-income households – to end homelessness and fulfill the right to adequate housing. Conventional market-driven approaches won’t get us there. We need a government-led approach that treats housing as essential social infrastructure.

In this CityTalk webinar, Maytree and the Canadian Urban Institute brought together a panel of experts to discuss what the federal government should consider as it launches Build Canada Homes, a new entity focused on increasing affordable housing supply and modernizing construction.

Speakers

• Graeme Hussey, Director, Affordable Housing, Windmill Development Group
• Tyler Meredith, Maytree Fellow and Partner, Meredith, Boessenkool & Phillips
• Carolyn Whitzman, Adjunct Professor and Senior Housing Researcher, University of Toronto School of Cities

Moderated by Mary W. Rowe, President and CEO, Canadian Urban Institute.

Key takeaways from the discussion

1. Housing as infrastructure
   Housing must be approached with the same ambition as past nation-building projects. It is not just a commodity; it is core social infrastructure.
2. Unlocking public land and fixing zoning
   Government-owned land and streamlined zoning processes are critical to speeding up delivery and enabling both non-profit and private developers to build at scale.
3. Modular and prefabricated construction
   Modular housing offers a path to faster, lower-cost delivery, but requires government support to de-risk investment and provide stable demand pipelines.
4. Deep affordability and preservation
   Canada loses more affordable homes each year than it builds. Acquiring and protecting existing stock, alongside building new non-market and Indigenous-led housing, is essential.
5. Federal leadership and partnerships
   Build Canada Homes must align funding, support innovation, and strengthen partnerships across governments, non-market developers, and community organizations to achieve lasting impact.

Transcript

This transcript has been edited lightly for clarity.

Mary W. Rowe: Hi everybody, it’s Mary Rowe. Welcome to CityTalk. I happen to be in Toronto, which is, we know, the traditional ancestral territory to a number of First Nations, Métis and Inuit peoples. And we often ask people to just check into the chat there, where are you coming in from and what is your relationship to the treaty holder or how you are …

I suppose a better question would be to say for all of us is – how are we attempting to live both truth and reconciliation in our work, which we know urbanism has touched in negative ways, but also, we hope, in positive ways.Toronto, it’s covered by Treaty 13, and we have history, an ancestral history with the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee and the Wendat peoples, and appreciate everyone’s continued focus on this challenge.

This podcast, it isn’t a podcast, sorry, I just noticed that we’re plugging the podcast and I just saw my photo up there with two chief librarians, Pilar from Edmonton and Asa from Halifax, a really important conversation for us to be having, I think, about what’s happening to our institutions that are in downtowns and along main streets. And so I hope you can tune into that. And also the previous CityTalk Live that we did a couple of weeks ago with the School of Cities is also, as you can see, posted. So we hope you watch these programs in your downtime, you know, for a little bit of amusement and we hope positive stimulation.

Today we’re talking about housing. And I said to the folks in the green room, you know, we could do this every week, probably, because there’s a new announcement every week about, “Oh, this is what Build Canada Homes might do. No, this is what Build Canada Homes is going to do.” And it’s obviously a work in progress. All of us watch the news.

Everybody here is very close to how the federal government is demonstrating leadership.

And a number of you have been actively involved in creating Build Canada Homes and in continuing to shape it. And Ana Bilao, who is an outgoing member of the CUI board and a frequent participant in these conversations is going over to Ottawa to head up BCH and has made it pretty clear to all of us that she’s going to need all the help she can get. So that’s part of what we’re in the business of doing.

And this session was initially conceived around the work of the Maytree organization that has been active on housing policy, the right to housing, housing justice and creating opportunities for innovative approaches, and one of the ones that they had really been out in front of is, how do we actually take the investment in defense … And I think Alan Broadbent, the chair of Maytree initiated this, I think long before the Prime Minister suggested that we would be making bigger investments in defense … I think he’s been saying for a number of years that you’ve got these public lands that are owned by the military and can we leverage them differently? Can we leverage the workforce that exists in the armed forces? And are there different ways for us to think about this quite differently? And how does that fit with this commitment to more homes, using public lands differently?

And also the other piece of it, which is in the Build Canada Homes mandate, is what’s the innovation that we’re seeing? Is there an opportunity for factory-built housing and all that kind of thing? So we had hoped that Alan would be joining us, but he’s laid up. But knowing him, he is sitting somewhere with his leg raised, watching us. So, Alan, we’re going to try to do our best.

We’ve got an able replacement in Graeme Hussey, who’s agreed to join the conversation. I’m going to ask them to come online, please, now so you can see who we’ve got. And the questions that we are going to deal with and everybody knows, put some questions in the chat, we’ll get to them.

You know, first thing, pretty fundamental thing, why we should treat housing with the same ambition that we brought to major infrastructure projects in the past. It feels like a moment in time. It feels like we … and Carolyn, I’d be interested to see if you agree with me. It feels like we’ve won the battle that infrastructure now includes housing. It’s not just roads and bridges. I think people get that. So that’s it.

Then where is the innovation agenda in that? How much can we see come from factory build on public owned lands, including military housing. Is that an option? How should the federal government be engaging with the non-market side of the system and the market side of this system? There are two sides. There’s probably seven. But you know what I mean. We’ve got the market side, which builds and finances market rate housing, and then we have the non-market side, which is still built, I think, by industry, but is funded under different circumstances, which is where Build Canada Home seems to be coming in.

Knowing you all, this is going to be a wide-ranging conversation. I’ll do my very best to see if I can pull out key things. As I say, could people in the chat please put forward particular questions and concerns you’ve got. You’ve got three folks here with very direct experience and lots and lots of policy chops and practical, which we need both to talk about this significant challenge.

So, Tyler, first to you, I think this is your first CityTalk. Tell us where you’re coming in from, it’s always helpful for us to know where people are coming in from, and then just give us top of line … What you see is the sort of priorities going forward. So welcome to CityTalk. Great to have you.

Tyler Meredith: Oh, thanks for having me. And I’ve always been a fan of the Canadian Urban Institute. So it’s great to actually participate in this. I’m coming in from Ottawa on the, you know, unceded territory of the Algonquin peoples and the Algonquin Nation. So great to be with you all.

I just want to say a couple of things about the genesis of Build Canada Homes and why I think this is a really exciting time. This is an idea that has been in the works for several years. And you rightly noted there, Mary, about how it started off originally under the guise of public lands. And there was, you know, a number of thoughts from Justin Trudeau and the government at that time about how to leverage public lands and I think slowly over time, an appreciation or realization that, you know, if we leverage our public lands of which, as you mentioned, Alan’s interest in the military.

We have a lot of excess land on former naval reserves and so forth in Toronto and Ottawa and places like that that can be used for housing. We can take out potentially 30 to 40 percent of the actual costs of how to build. And so once you start to think about that and then you start to think about the opportunity of putting it on your own balance sheet and what that means in terms of at least the federal government’s context of minimizing its fiscal cost. You start to really realize, oh, my God, we can actually scale this really big.

And this is actually in some ways, as Carolyn keeps reminding me, this is not a new idea. It’s actually going back to an old idea that has worked. She is a historian. She does a great job of reminding us of that. But what’s neat is that all of that work that took years to do, I think is now about to hit a really important inflection point because we now have a Prime Minister who, in addition to embracing that idea, has also said we need to make some changes to how we build, which is the importance of modular and that has the ability to scale and help grow the inventory of housing faster, but also to take advantage of that financial innovation that I just mentioned and to leverage it in a context where we’re also going to be making changes to how we think about operating and capital spending.

And when you put all those three things together – the modular, the changes on the federal balance sheet, the ability to scale and have the federal government lead in building it itself – there is an opportunity there to build a lot of stuff very quickly. And if we can realize and take advantage of this opportunity, it can be quite transformative for housing in this country.

Mary W. Rowe: Well, good for you. I mean, I’m appreciative that in these dark days, hearing something hopeful and positive is welcome. So thank you, Tyler, for your optimism.

Can I just also acknowledge people in the chat … We’ve got people coming in from the U.S, welcome, and from Europe, welcome. And we know that this is not a problem confined to Canada. So I think it’s important that we look at best practice and wouldn’t it be great if Canada could get out in front of these issues and start to talk to the world about how we’re solving them.

And I love the balance sheet piece, you’re going to explain that to me when we get into the bigger conversation, because it’s often used for why things can’t be done. And so I think we’ve got to move our lovely characteristic reticence of it can’t be done to somehow, oh, yes, it can.

So, Carolyn, you’re the next one. How can it be done? What’s your perspective? You’re a frequent visitor here on CityTalk, and I know you’re immersed in these issues. And I loved it that Tyler just called you a historian. Do you like that?

Carolyn Whitzman: Oh, so much, and not inaccurate. I mean, if you read Home Truths: Fixing the Housing Crisis, it does have a strong historical component and [Mary: I just happen to have it right here], there you go. Thank you so much. Anyhow, I heartily agree with Tyler. I think that really for the first time since the 80s, we’re talking about the right tools. We’re talking about land, which is an important component if you look at the postwar building boom that the Canadian government supported. And if you look at the 70s and 80s, when non-market housing was an average of 14 per cent of completions, as opposed to three per cent of completions now.

Mary W. Rowe: When was that?

Carolyn Whitzman: In the 1970s and well into the 1980s? 14 per cent. There were a couple of years where it was over 20 per cent of completion. Those were the years, by the way, when housing completions were highest in ’70 and ’72. They haven’t been as high since then. But anyhow, so land was an important component …

Financing and particularly the notion of patient capital, long-term, low-rate financing was incredibly important, and construction innovation in the immediate postwar period. Sorry to sound like a bit of a historical pedant. There were sort of basic pre-approved designs. We aren’t working and we shouldn’t be working with the same designs today. Now we’re talking about ‘plexes and hopefully about enabling small apartment buildings with large apartments … The way that it works in many parts of the world, not just Europe, but also Asia and South America.

So those three elements we’ve got right. We don’t have the scale right yet, but I am hoping that if the initial investment in Build Canada Homes works out, then we can scale up new builds. We can scale up acquisitions, which have been an important part of scaling up non-market and affordable housing, and we can scale up renovations to be more climate efficient, to be more accessible, but also renovating other uses, such as commercial and office to residential.

I do want to take issue with one thing, Mary. Whether you’re a market developer or a non-market developer and Graeme’s about to speak on behalf of a fairly substantial non- market, or at least arm of a, developer. You have the same balance sheets. You have the same pro forma. There’s no magic solution. However, when you look at, again, the past of Canada, the present of countries like the Netherlands or France or Austria, where there is a lot more non-market housing being built, you have strong non-market developers, whether they’re public housing authorities, whether they’re co-op or co-housing providers, whether they are supportive housing providers.

Some of my colleagues are in Finland right now, meeting with a provider that has 17,000 homes in a country of 5.5 million people, the Y-Foundation. There can be really great social purpose-led development. There’s no magic to the formula. It takes a little bit off for expectation of profit. Land is a big component of cost, but they still have the same pro formas to deal with.

Mary W. Rowe: I hear you. We’re trying to run a bunch of proforma’s to see what are the impacts. We’re working with a diverse group of folks to see if we can show the options – if you do this, the pro forma is affected that way … If you did that, I hear you and it’s not that different, whether it’s for market or not. I hear you.

Carolyn Whitzman: And the Maytree report, I’m just going to say one more thing that we’re talking about. One of the Maytree products we’re talking about today involves Graeme’s Group, Windmill, and three other large non-market developers playing with pro formas, which is really important.

Mary W. Rowe: Yeah, there’s the new parlour game, everybody. Let’s play with proformas.

Can I just … a couple of things on the chat, a couple of newcomers on the chat who perhaps are used to being on the other side of the screen and don’t know that when you post to the chat you need to toggle to everyone. Otherwise only hosts and panelists see them. So a few of you have gone to host and panelists. We’re happy to see you, but everybody else is going to want to see you too.

And similarly, folks, let’s try to not use too many acronyms in your comments. We always joke the CityTalk chat is the most … I don’t want to say it’s not the most valuable thing. The conversation is valuable, but the chat is really valuable too. And people look at it and then we take takeaways from it. We do transcripts when we post them. So if you can avoid putting an acronym in there and just spell it out, that would be helpful. Then everybody will understand.

OK, thanks, Carolyn. Over to you, Graeme. You just had a nice pitch from Carolyn and then I’m going to bring them all back and we’ll have a group chat. I think this is your first CityTalk, Graeme, am I right?

Graeme Hussey: That’s right.

Mary W. Rowe: Well, welcome. Welcome. Give us your perspective and then we’ll have an all-call with everybody.

Graeme Hussey: Yeah, so I mean, my background is primarily developing non-profit mixed-income, affordable housing. Right now I’m working with a group called Windmill Developments, which is a private developer, but we have a number of projects where we work in partnership with community housing organizations, building non-market housing, just to use that kind of broad term.

What I’ll just add to what Tyler and Carolyn have said is, another kind of important element of the moment right now is … It’s in some ways never been harder to get a project in the ground and built, even though we in some ways have identified a lot of really great tools and levers to contribute to it …

Some of the pinch points and problems, I think all levels of government are, you know, for the most part, working towards the same thing. Nobody’s kind of fighting that. It’s just the economics of development, which is a really nuanced, multifaceted supply/demand, macro/micro thing.

And in particularly the big cities like Toronto and Vancouver, it’s just hard to do projects – condo or rental. And what’s happened over the last couple of years is much of the private condo market has really ground to a halt. Some of that has switched over to rental. And whether you’re a non-profit developer or a market developer, almost everyone is accessing some CMHC program or another. It could be the ones designed, particularly like the Affordable Housing Fund, for the non-profits and co-ops, or it could be MLI Select, which is designed for market developers to develop rental housing.

And then what’s happened in the last six months is many of those CMHC program budgets have been exhausted. So the projects that were kind of in the pipeline and even moving forward in the hard times have basically ground to a halt. Just this past Friday, CMHC did announce that they topped up the budget just for the Affordable Housing Fund. There’s some real deficits in some of those other programs in particularly big key cities. And so that’s kind of really put a stutter into all this.

And then I think maybe what I’ll finish with is – you know, my worry in a couple of these things is with the transition of all this, we’re going to further exacerbate the slowness of that and, you know, projects that are in the queue at CMHC might get deflected to Build Canada Homes and have to start with a new application process. The other thing I might want to add, Tyler, I’d love to hear your thoughts on this, is I think absolutely we want to leverage all the federal land and the other levels of government land, but that’s only part of it. So how do we create a Build Canada Homes that does that, but also allows us to develop all the other land that maybe non-profits or private developers have in the pipeline and, you know, put that in with the full picture.

Mary W. Rowe: Yes. Well, you are the perfect temperament to be on CityTalk because we always acknowledge that everyone needs to run to the dictionary and look up Gordian Knot because almost every topic we tackle here is a Gordian Knot and housing is no exception. Many, many layers of this and many, many solutions.

Can I get Carolyn and Tyler on the screen? Let’s have all four of us here and let’s have a kind of collective conversation if we can, because I’ve got to tell you that one of the things that I struggle with, gang, is quick wins. What can be done quickly? Versus the longer runway investments. And I don’t quite know how to modulate that in my own head because it seems to me as if, and I heard Graeme just flag it, you know, we’re creating a new entity or it’s at least a new set of an organizational entity at the moment, still within Infrastructure Canada, but who knows? And is it going to slow us or is it going to accelerate us?

So Tyler, you were in the belly of the beast. Open up your mics, everybody, because nobody has a barking dog … don’t worry about muting and why don’t you start, Tyler, do we need to do some prioritization and is that one of our encouragements to BCH and all of us? Should we be prioritizing and what would that be?

Tyler Meredith: Yeah, so I think you actually saw the government kind of do a version of that with its announcement at the beginning of Build Canada Homes a couple of weeks ago, right? What they announced wasn’t just – the entity is created and Ana Bailao is appointed. It was – the entity is created, it’s capitalized, it’s going to have these missions, here is the first six or eight projects that we’re going to do.

And interestingly, I think, you know, those eight projects or whatever that they’ve selected on public lands, those are projects that have been in development, in the pipeline, again, thanks to all the effort that had gone into the public lands work over the last two years that we’re now at the stage that could be scooped to run. And although it’s, you know, those projects aren’t going to be in effect, you know, wins that BCH delivered, although they will be the first things that BCH does, it will be the proof of concept that the model can work.

And if we can do that, we can scale, I think, actually relatively quickly. And just interestingly, to the point that Graeme was making earlier about like, you know, how do we make sure that we’re not losing sight of other opportunities outside of that inventory? I think the way I see Build Canada Homes is … and how I differentiate it from some of the work that CMHC had been doing in the past is this is now the agency who’s got the clear mandate to do non-market affordable housing. Right?

There is still a role for how the government can support that gentle development of modest market, purpose-built rental. And there’s going to be still a bunch of financial incentives to support those developers – that will probably continue to live mostly on the CMHC side, because CMHC knows that that industry really, really well.

But I think it’s true. We can be honest with ourselves. And I saw certainly a version of this in government that, you know, when you have too many different things that you’re trying to do, it can sometimes result in mandate confusion at CMHC about like, well, how am I trying to really build deep affordable units for particularly that vulnerable population that’s coming out of homelessness.

And it’s interesting that the Prime Minister talked about homelessness as much as he did in connecting it to the mandate of BCH originally in the announcement. And I think that speaks to how this is meant to be the agency of record for any partner either in a crown entity or in a non-crown, non-governmental entity that wants to help build non-market affordable housing. And that just, I think … We couldn’t get there fast enough with CMHC.

Mary W. Rowe: You know, I think that this notion of lanes, pick your lanes. Because as you said, Carolyn, this is a Gordian Knot … This is a whole bunch of things that have to happen and they have to be incrementally advanced. And I think one of the anxieties has been, before BCH, before the details were sort of spelled out, I think there was a concern that somehow government was going to get into the building business in some way. And some of the development sector had, you know, a lot of hand wringing about that. But this idea that – what I see is they have a mission around build, how they’re going to catalyze building, what their intervention is on finance, and then how do they catalyze innovation in the non-market side? Am I right? That’s them. That’s their lane. Yeah. What am I missing?

Carolyn Whitzman: Well, there’s three big opportunities, Mary. The first opportunity and it is an opportunity with Build Canada Homes, and I want to talk for a moment about the opportunity and acquisitions. Now is a perfect time to be buying some of the aging stock of apartment buildings, a million units, certainly over 500,000 in the Golden Horseshoe, that is the area around Toronto that are at risk of losing affordability. And could be a great start in building up the equity of a lot of non-market providers. REITs want to sell. They’re looking for deals to sell. The BC Rental Protection Fund bought half of the apartments that were for sale in BC last year. The Canadian Rental Protection Fund, which was announced in the 2024 budget and then a whole bunch of chaos happened between 2024 and now, is ready to roll under Build Canada Homes. So you want short term wins, you do acquisitions.

Absolutely. There’s a runway of two, three years at best to build new homes.

Mary W. Rowe: Can I stop you before you go further on that? So on the acquisitions piece, you have a stat, which I’ve heard you say before about what we lose every year. Like we lose … What is it? Some staggering number …

Carolyn Whitzman: My colleague, Steve Pomeroy, has a stat of 15 to one. And in Ottawa, it’s actually 30 to one. So for every one home, non-market and/or affordable home built from 2011 to 2021 – it’s a census year thing, and we don’t have the 26th census yet – 15 were lost across Canada at the price point that low-income people can afford. That’s my wonky … Well, actually, it’s Steve’s wonky stat to be clear. Pomeroy’s wonky stat.

Mary W. Rowe: And Steve’s probably in the audience. Steve, correct us if we’re wrong. Steve’s probably there. But I think everybody needs to understand that … that we actually have an inventory that’s being eaten away and eaten away and eaten away. And so as you say, one of the quick wins is stem that hemorrhaging. Stop that.

Carolyn Whitzman: You can’t fill up a bathtub when the plug is open. So let’s do some plugging. [Got it]. Absolutely. Second opportunity, and I want to speak directly because I see there’s a lot of chat about this in the chat … Supportive housing. It was treated as a unilateral thing with the federal government, sometimes working with municipal governments, but the provinces and territories are so important because it’s only them that can provide the health and social supports that really make supportive housing work and a lot of people who are homeless have disabilities, not everyone. Some homeless people just need cheap housing, but some homeless people need cheap housing with supports.

This is an opportunity for new federal/provincial agreements, many of which run out under the National Housing Strategy in 2027, anyhow. Certainly the one with Ontario does. But this is new money, so this is an opportunity for a new deal.

And I would strongly suggest, and this is going to sound pretty radical, that if provinces are unwilling to provide the necessary supports for supportive housing, then the federal government should release money directly to municipalities that are willing to provide those social supports and in some cases rent subsidies and claw it back from health and social transfers. That’s only in the case where provinces don’t want to play ball. That’s a second opportunity.

Mary W. Rowe: Fighting words, fighting words. Fighting words from Carolyn Whitzman, and there are people on this chat who know about those negotiations and know about how that might or might not be possible or be politically possible in terms of reality.

Carolyn Whitzman: I know Maytree is looking at some of those issues and I look forward to what they come up with. And there’s some wonderful legal eagles out there like Alex Flynn, shout out to Alex Flynn. She’s on there too. There you go. Hey, Alex. OK, so that’s number two …

Mary W. Rowe: Well, can you hang on … Will you remember number three if I go to Tyler, if I go quickly …

Carolyn Whitzman: You betcha because, you know, I can talk all hour.

Mary W. Rowe: Don’t forget your number three.

Tyler, can we talk a little bit about that around this? And then Graeme, I won’t forget you, but I’ve got two policy wonks in the room, so it’s hard to resist.

You know this has been a jurisdictional football. We know that nobody took responsibility for it. We see it on downtowns now. You know, it’s everybody’s problem and nobody’s problem. How do you see the future in terms of the federal government’s much more robust presence in the sector, and they’re needing to now leverage their provincial colleagues. Thoughts on that, how you see that playing out? And then I want to talk … I don’t want to forget about defense, but go ahead.

Tyler Meredith: Sorry, do you want me to answer that? … sorry, sorry …

Mary W. Rowe: Yes! You’re the policy wonk …

Tyler Meredith: So look, I think Carolyn is absolutely right that there is an opportunity to … Because of the timing of the renewal of those agreements and all of this other stuff happening – there’s an opportunity for a two-for-one kind of win here.

I have a slightly different view, though, of tactically how to do it in the sense that I don’t know that the federal government can, under its new fiscal framework around operating and capital spending, be able to supplement enough on the supportive housing investments to make that work, although Carolyn has an interesting proposal about culling it back potentially from CHD and CST, although that would be, as you would know, Mary, from your time in government, that would be a pretty big thing to do.

Mary W. Rowe: That’s why I was asking.

Tyler Meredith: Yeah, actually I think the way you do this is by leveraging the other pots of money that are going to go into provinces through the government’s commitment to reduce development charges, because that is money that is going to, you know, could be if you’re Ontario, for example, they could solve the development charge commitment with the stroke of a pen in changes to the Planning Act and Municipal Act, right?

And if they do that, there’s a world in which they could keep the federal money. Well, if they’re going to keep federal money, federal government should ask for something additional in return. And the additional thing that they could ask for in return as part of those agreements would be to say, give us complementary investments in supportive housing because we don’t have the ability to finance it on our balance sheet under this new capital framework because we’ve got to focus on capital.

But let’s get the provinces and municipalities to focus on operating. That’s the differentiation of roles that eventually we need to get to. It would be a smarter way I think for both levels of government to focus on what they’re good at and, frankly, the federal government just doesn’t know this space as well as municipalities or provinces who are much closer to the public health and social service investments that need to be made.

Mary W. Rowe: And we did see in the previous government, we did some experiments with providing resources through a competitive process directly to municipal governments. And you can see in the chat, nobody is objecting. But I don’t know how strong the provincial representation is in a CityTalk, but provinces show yourselves come on our chat and tell us why it’s a good idea or a bad idea.

All right, Graeme, let’s go to you in terms of a practical kind of perspective. You heard from both of these folks. I think there’s a large consensus that we want government resources to be made and government process to be available to stimulate the non-profit development sector. And it is stronger in some parts of the country than in other parts.

Are there particular things that you’re imagining the BCH is going to allow you to do? And are there other things that government should be doing to strengthen the sector in which you’re so active?

Graeme Hussey: Yeah, I mean, absolutely. Part of it is really just what I’ll describe as the volume. So it’s a matter of, you know, how much money are they going to invest in this, whether it’s grants or low-interest financing. What level of land will they put into it? There was a comment in the chat. There is there is other comparable provincial and territorial organizations like Build Canada Homes or sorry, not Build Canada, like Canada Lands Company that have provincial municipal in Toronto … CreateTO as an example. So all of that is important. But a couple of things that will really help within this is because we, you know, to get easy wins, we need to move fast. And so …

Mary W. Rowe: Tell me, how can we move fast?

Graeme Hussey: I’m going to pull all this together. One is we need to have better zoning. We need to have sites that are appropriately zoned. Really, half of the time that a developer takes to do a project is to go through that zoning process. And if you’re a private or a non-profit developer, often you’re investing a lot of financial money during that time. That’s way before the governments ever come in and support it. So we need to have pre-zoned sites so that we can build quickly, get approvals fast, we need to switch, as people have mentioned  …. Go ahead. Yep.

Mary W. Rowe: I want you to stop because I want to just mine that one. So on the chat, you’re hearing Graeme say … You called it better. We need simpler zoning, don’t we? We need more permissive zoning. Is that what you’re getting at?

Graeme Hussey: It needs to be such that for each of these projects where you’re building at scale, you’re not having to rezone the sites or do official plan amendments to do a project.

Mary W. Rowe: OK, so there’s going to be pushback on this, and I’m really interested for the chat to talk to us about it. You know, this is a larger narrative critique of North America generally that we got ourselves into a place where it was really easy to say no, no, no, no, and we’ve got … What I think you’re saying, Graeme, is we need to find a way to get … see what I mean, the chat is blowing up. We need to get to a place where we can say yes. So zoning needs to be more flexible. OK, what’s your second point? Yeah. And then I’m going to come to your third point, Carolyn, I haven’t forgotten you’re hanging on to it. Go ahead, Graeme.

Graeme Hussey: So we need to build faster. We’ve talked about that’s modular and prefabricated construction. Windmill is doing a project right now in Toronto, South Etobicoke, at 230 Royal York, which is a nine-story mass timber building built with a system by Intelligent City. That’s an example of that, but we’re few and far between. There’s only a handful of those types of projects really in the country.

Mary W. Rowe: Tell me why. What are the obstacles? Because everybody wants quicker, faster, cheaper. I get it. So you’re saying modular is a way, but there’s … and you’ve got one … we could probably count on, I don’t know, two hands. How many there are, right? Tell me what do we have to do? What have been the obstacles to getting more of those to happen? And what do we have to do to juice that?

Graeme Hussey: So there’s not enough factories and technologies. We need to invest in the factories and the technology. The few that exist might be in, you know, a particular province. How can they go across the country? You need to have them kind of more locally. The challenge with that is that they need to have predictable sales [demand] … They can’t build a housing factory based on one customer. You would never build a car factory to build one car.

Mary W. Rowe: So is this the idea that BCH would do this? Isn’t that part of their aspiration, Tyler, that BCH Is going to provide a demand, a pipeline for Graeme to frantically keep up with? Is this a realistic … both of you can duke it out here, but is this a realistic aspiration?

Tyler Meredith: Well, I think what’s critical and Graeme, I don’t want to put words in your mouth, but … Is that it isn’t just … The critical success factor of BCH isn’t going to be the ability simply to build on public land. It’s the combination of build on public land, take advantage of simplified zoning through all of the pre-work that the Government of Canada has done on the Housing Accelerator Fund to make changes around the structure of how we build, to make it simple and easy. And potentially in the case of government as a builder, to use Crown prerogative to bypass potential barriers that exist to up- zoning and to also get reductions in development charges. And, finally, to potentially create that factory line production for modular housing, which is part of the industrial strategy objective of Build Canada Homes.

This Prime Minister is very, you know, ambitious, I will say, having spent time with him on this issue. He’s very ambitious about the ability to condense time in production and potentially save cost, but really condense time in production by developing a guaranteed factory line production system that we can then put into some of these projects that will guarantee demand for those manufacturers and then will also allow us to put supply into the market faster. And so the secret sauce at BCH isn’t any one of those specific things. It’s how you stack and integrate those three or four things into every project. That’s the transformational opportunity here.

Mary W. Rowe: As much as all of it … Go ahead, Graeme.

Graeme Hussey: Just to add to that, and I think it kind of links to some of the work that Carolyn’s done. The other thing that you need to layer on that is the financing approval piece and, you know, one of the downfalls of the CMHC process for different programs is to get approval you basically have to be at construction start and who’s going to get to construction start if you don’t know how you’re going to finance your project, and you’re applying for every single building each time over.

So with Build Canada Homes, what we need to be able to do is when groups, private or non-profit, come in to get a project financed, we need to be able to approve it earlier in their process. We need to be able to prove it at more of a portfolio level so that groups aren’t coming in for every single building. You can approve that at a portfolio level.

And then ultimately, it’s the amount of money that’s in the budget. You know, we topped up the Affordable Housing Fund by $1.5-billion. That’s probably not even enough for all the applications that are already in the queue. We’ve talked about $13-billion in Canada Homes. But if you’re talking about 500,000 units of housing, not saying it’s all going to get financed by Build Canada Homes, but even a big percentage of that $13-billion doesn’t go very far. So I think we need to find a way to approve the financing faster and scale that financing up.

Mary W. Rowe: So public land, access to capital, and it sounds to me like access to capital faster, zoning, whatever that looks like, reducing development charges, that’s part of making the cost of delivery cheaper. And then what I just heard from the two of you is we have to create the capacity to do factory build. And then we have to create the demand to … once you got a factory, you want to have the factory producing something that goes somewhere. So these are, I think that’s six things. That all have to happen at the same time. Carolyn’s kind of … not so much. Go ahead.

Carolyn Whitzman: I can put them in categories. I mean, land policy includes use of government land, but it also includes some basic … A lot more certainty about zoning and approvals in my mind. And we do need – like whether you are a non-market or a market developer, there needs to be much more certainty about approvals in order to get financing. If you’re actually going to work towards a steady pipeline, which is absolutely necessary for industrial construction, you’re not going to build a factory. You’re not going to hire people for secure long-term employment, which is much more attractive than the sort of short-term way that a lot of construction is done and thus still get a more diverse workforce. But that’s a whole other issue.

Mary W. Rowe: But it is … the labour is an important piece …

Carolyn Whitzman: I mean, we’ve gone from, “Oh, my God, oh, my God there’s not enough construction labour to billions and millions.” Actually, I’m exaggerating … “thousands of construction workers are going to be laid off.” And, you know, let me introduce you to the work of John Maynard Keynes, and this is a perfect time for counter cyclical investment. So …

Mary W. Rowe: You heard it here first.

Carolyn Whitzman: Yay. Build Canada Homes. No, you’ve heard it through John Maynard Keynes.

Tyler Meredith: Modern Keynesianism.

Carolyn Whitzman: I’m a big Keynesian. Anyhow, that’s neither here nor there. So the third piece I was going to talk about and Graeme has already talked about and Tyler has already talked about, is a new round of housing accelerator fund and agreements with provinces absolutely, and agreements with municipalities and regions. Absolutely. And again, I’m going to throw a little grenade in. I think that there should be three to four stories as of right in any residential or mixed-use zone. Definitely ten to 12 stories near any transit and absolute as-of-right in large cities where there’s large, well-located housing deficits, 20 to 30 as-of-right near transit station areas. And then you can start to plan for a steady pipeline of homes that are going to meet needs.

And I like the fact, and I think that Tyler’s mentioned this, that Build Canada Homes is working towards a portfolio approach. I think that it’s really important when you’re … when you talk about finance, and this is kind of an irony, you need to talk big numbers. It just doesn’t work if you’re not talking big numbers, like even Housing Partnerships Canada offers to non-market developers packages that are like $10- to 20-million. So that … and absolutely working with $10-, $20-million, working with $80-million for large pieces of land or combinations, it could be 20 municipalities in New Brunswick. You know, you need to start talking about that scale if you’re going to be talking about the economies of scaling of, you know, how you can save money through scale. And frankly, non-market developers and some of the more innovative market developers need to start thinking about that.

I’m going to throw in one more grenade before I stop. I hate unit limits. We lost tens of thousands of rooming houses, which were the only form of affordable housing, market housing, for very low-income people … We need more student housing, more seniors housing, more co-housing. All of which don’t work well with unit limits. So let’s focus less on unit limits, let’s focus more, as a couple of people have been saying in the chat, on building code reform that reflects the 21st century, not the 20th century.

That means things like single stair, it means things like smaller elevators. It means a whole generation of accessible, range of apartment sizes that we simply aren’t achieving right now. And that’s what we need from both the market and the non-markets development sector.

Mary W. Rowe: I think it’s interesting this analysis you keep drawing, Carolyn, that the challenges have … sit on both sides of the ledger and then whether we’re creating a market or non-market, we have a lot of similar challenges.

I want to ask you about risk. How do we de-risk? Seems to me we have to de-risk across a whole bunch of these domains. Alison Story from Chatham’s got a horror story about a modular gone bad in that region. We know that there are issues around financing and whether or not governments are willing to absorb risk. We know that the real estate sector right now, the condo sector is completely shut down. And the question is, how do we actually create … How do we de-risk to get investment back into that? Tyler, have you done thinking about this? How do we de-risk?

Tyler Meredith: Yeah, I have. And in some ways, this is why … don’t take this as a partisan comment. This is actually why I think Mark Carney is perfect for this moment, because in some ways, the way you de-risk, especially when you’re facing situations of market stress, right? I would argue what we’re seeing in the housing market on the market side is a slow moving version of the great financial crisis, where there are a lot of builders who are … they’ve got projects that are effectively bankrupt and cannot move.

And we need to actually do a financial restructuring of the industry. And I say that because I think the industry has not wanted to talk in those terms, but that’s kind of what we’re facing. But the reason I mention this is because government in crises, moments like this is the way you de-risk things, right? It is government that can step in to be able to say we are going to partner as an equity investor in some of these initiatives in order to help take down the risk of how we potentially restructure those projects so that, you know, other non-condo investors can come in and buy those things who actually want to buy stuff that people want to live in, as opposed to 450 square foot shoe boxes in the sky, right?

Or whether it’s on the non-market side, right, in terms of how do you build the … how do you integrate the modular into some of those projects? Well, you get government into the market as a market maker to help create the factory line production for modular so that you can actually have the supply available to integrate into those projects. So government is the key lever here to de-risking in a lot of places in the market.

Mary W. Rowe: So can we just riff on that for a second? I mean, rumour has it that the government is looking at MURBs. There’s a question in the chat from Margie Seidler asking Carolyn, the progress we made in the 70s and 80s, how much of that could be drawn directly from MURBs? Here I am doing an acronym. Maybe Tyler or Carolyn could talk about what is the prospect for MURBs 3.0 in 2026?

Tyler Meredith: Well, look, I mean, I think it’s high potential for MURB, partly because we put it in the platform. That means you’re going to do it. So I think there’s a decent chance that it will happen. I mean the thing about MURBs that should be attractive is if you believe that you are concerned that there’s been too much of a certain kind of speculative investment in parts of the housing market, although let’s admit to ourselves we need more capital into housing, right?

The question then is, how can we find sources of capital that may be less speculative or less risky. And what’s I think fascinating about the MURB example is that it in effect democratized how you developed an early retail investor for smaller projects that actually allowed you to build gentle density in communities, the density that communities kind of like that has done an amazing job of building a scale in places like Montreal and Toronto.

I think there’s a question of whether or not that same kind of retail investor will come back in this context. But if you put on the table this really attractive financial incentive, which let’s admit is just aggressive tax planning for doctors and lawyers and other retail investors, it can be channeled in the right way as patient capital to help with some of this mid-market modest affordable housing.

Mary W. Rowe: There may be other ideas out there. Put them in the chat. If it’s not MURB 3.0, what is it? Go ahead, Carolyn.

Carolyn Whitzman: Well, an important thing when we’re talking about multi-unit residential investment is that in the 70s when … and the 80s when MURBs were really popular, the rent, the average rent was affordable to a moderate-income person in large cities and a low-income household in smaller cities.

There was also the affordable rental program. There were programs, whether explicitly or implicitly, that were aimed at certain income categories. So, when we’re talking about demand – the market has fallen down in $800,000 condos that are, you know, essentially investments, there for small households. The market ain’t going to fall out of housing that’s affordable to low- and moderate-income people, particularly in good locations. So, I would love to see more directed investment that is not unrelated to income categories.

And when I’m talking about income categories, I’m definitely talking about low-income people because that’s all of the homelessness, the majority of the housing need. I’m talking about moderate income young professionals forced to leave large cities at this point because they can’t see a future there. I’m also talking about median income people at this point, middle income people.

The problem is that we keep on talking about something that’s entirely … I won’t say fictitious, but is not relevant to meeting housing needs, which is market rate. Market rate is something very different now than it was even a decade ago. [Right, right.] So how can we make sure that investments meet the need of absolutely the fastest growing group, which are single people, as well as families, as well as poor people, as well middle-income people. That’s the groups whose needs we need to meet and where there is virtually inexhaustible demand, I have to say.

Mary W. Rowe: But there is capital over there. There is capital and expertise over there on the market side. So how do we harness them? And I had heard …

Carolyn Whitzman: There isn’t the market size, Mary. There’s 97 per cent of the development, which is market sector. And within that market [right, right] there are fabulous multiplex developers. There are lots and lots of market developers who see a niche in the sort of moderate income, – I won’t say low income. [Yeah, yeah, yeah] I don’t think they can do low income without major subsidy – but, you know. Let ’em rip.

And there is absolutely, you know, gorillas in the room who are used to doing subdivisions in Aurora. And there are other gorillas in the rooms who are used to doing Harbourfront condos kind of thing. But they aren’t the universe of developers. There is a huge range of really interesting developers who absolutely need conditional financing, but need financing. I’m the most non-market person in the world, but it can’t be just the non-market.

Mary W. Rowe: No, and there are a lot of people … Graeme, it’s not that you’re not exceptional, you are. But there are lots and lots of people like you, and we’re seeing them in the chat and we want more of them.

So with the time that’s remaining, can we talk a little bit about the catalyzing innovation piece? What should our expectation be of what modular will or won’t be able to do? Are there key ways that, you know, where would you put that in your priority list? We’ve got land, we’ve got all those things that you gave us. Where would you put the idea of housing innovation?

And also just to say in the chat, we’ve got a lot of people who are anxious that there will be an overcorrection and that we will suddenly be “building baby building” and we will forget about all the other things that you need to make a community. You need infrastructure investment. You need public spaces. You need all the other things. And so how do we make sure that we don’t forget the bathwater when we’re focusing on the baby? Graeme, you first.

Graeme Hussey: Well, I think definitely with the government lands, whether it’s federal or municipal or provincial, you … when you see them disposed of or when the leases come out, they have a number of criteria, so they aren’t just focused on affordability. There’s other community benefit, sustainability, energy efficiency, design. So they’ve certainly incorporated that into their scoring. And for the most part they’re devaluing the price that they’ll fill the land for and overvaluing, trying to do the other things.

I think with modular housing, you know, one of the things to appreciate is that to do a project that is prefab or modular, you have to decide that at the beginning. And so the challenge right now where we don’t have a lot of scale in modular, a lot groups doing it both on the developer side or a lot of builders is you have to make a very, very risky decision. Do I want to make this modular or do I want to build this conventionally right at the beginning?

And with a very immature sector, that’s a very difficult decision to make. You’re only going to have a certain amount of businesses do that. And so that’s, as Tyler said, we need the government to find a way to de-risk that such that the factories can scale up and the developers can make that very difficult, risky decision right at the beginning of the project.

Mary W. Rowe: I think we … I think de-risk is a really important takeaway because I think a lot of us can figure this out. You know, how … What are the other ways to de-risk? Just as what Carolyn … I really glommed on the retention idea. Let’s look at the assets we’ve got. How do we keep them in play?

Tyler, when you look at the sort of dynamic that we’re dealing with here, rapidly changing access to capital being the dominant piece, but a rapidly changing public policy environment and a lot of urgency. Do you have a sense of where you would really zero in on for the next … Let’s say I mean, maybe you can tell us, what are we going to hear on November the 4th?

Tyler Meredith: Well, I think November the 4th will be about just putting in place all of the pillars of the overall kind of housing agenda, some of which were already started with BCH. But there are other pieces like some of the tax stuff that we talked about.

I think, though, from an innovation standpoint where I come at it and I, you know, as an economist, is fundamentally this is, you know … Housing policy is also a macroeconomic issue in the sense that it’s affordability piece, but it’s also a huge drag on productivity.

Mary W. Rowe: It’s jobs …

Tyler Meredith: It’s jobs … but it’s a huge drag on our standard of living and a huge drag on our productivity as a country. The reason we have a productivity crisis, one of the reasons why we have productivity crisis in Canada is because construction and real estate are a larger share of our economy than in a lot of other G7 countries. And we have a very unproductive construction sector. We’ve got great construction companies.

There’s a lot of small companies that are in some cases too small and they don’t have the form of mechanized production and capital intensity that they need in order to be able to build stuff fast. That’s where the opportunity of modular is important, because in one sense, it will allow us to do projects faster if we get it at the right scale. But it will also be a huge competitive incentive into the rest of the construction market to look at how they can change the way we actually build. The way we build stuff today is still very similar and very labour-intensive to the way we built stuff in the 50s and 60s.

And that … you can’t find a lot of other industries that have resisted technological change the way construction has resisted technological change. So that is a productivity problem we have to solve. And it is core, actually, to the government’s other agenda on economic growth that we have to get this right. And so if I were to say where do we need to spend more time? It’s on the technological innovation side of construction.

Mary W. Rowe: You know, this is a sort of hot button for lots of people because it’s kind of code for jobs go, tech comes in. I’m interested where we think labour is on this and how can the industry develop and evolve, as you’re suggesting, it become more productive … but also create more jobs …

Tyler Meredith: It’s not either/or. It’s not either/or. I hear this a lot. It’s not either/or because there’s going to be so much money sloshing around in new project developments, whether it’s major project infrastructure projects, Build Canada Homes, et cetera. There’s going to be huge opportunities for labour. We just have to give them the tools to be successful.

Mary W. Rowe: I like the lots of money sloshing around. That’s right up there with de-risking and retaining existing affordability. Carolyn, your last thoughts as we round up here.

Carolyn Whitzman: I’m fascinated by all the water metaphors and the chat has been amazing.

Mary W. Rowe: The chat has been amazing. Thank you, CityTalk chatters. You’re fabulous. Go ahead, Carolyn.

Carolyn Whitzman: When you invest in non-market ownership of housing, including government ownership of housing, you’re investing in long-term affordability. One of my great frustrations is $55 billion going into apartment construction loan, for instance, for affordability periods of 10 or 20 years. By the time you’re finished, the place is finished being built, you’ve basically lost your affordability, that’s an exaggeration … Like it’s very, very short term.

So I do and again, I don’t want to sound like a Carney shill, but I like the idea of investing more and spending less. That is a really, really great principle around which to build policy, as is using evidence.

There’s one more thing I want to mention that hasn’t been mentioned yet, which is that some of the most innovative development in Canada right now is being led by Indigenous developers. If you’re looking at Sen̓áḵw, if you’re looking at Jericho Lands or Heather Lands, you’re looking at some folks who are thinking outside the box, it’s part of the work of reconciliation. It’s something that we can’t forget when it comes to Build Canada Homes or indeed any housing policy that … I was in Regina last week, talking to Namerind, another Indigenous developer. There are so many great ideas out there. And Regina, until recently, 80 per cent of the people they were homeless, 10 per cent of the population. Again, bang for your buck. Invest in Indigenous innovation.

Mary W. Rowe: You know that term in complexity science where you look for the positive deviance – where is something happening that is positive that’s in the system that you haven’t necessarily noticed that you should. That’s what you’re doing. You’re saying point to the things that are working.

Graeme, last word to you in the trench. Just a quick comment from you. I’m saying you’re in the trench because you’re actually building projects. Go.

Graeme Hussey: Yeah, I mean, I know we’re talking about the future and what will come with Build Canada Homes, but I do just want to reiterate for all the groups that are creating projects … What’s more important is what comes before, which is right now, and I think we just need to make sure that we get the government in the budget to continue to invest in the affordable housing that’s needed in the next 12 months.

Mary W. Rowe: Thank you. Listen, thanks, everybody. Carolyn, always great to have you on a CityTalk and welcome to Graeme and Tyler for joining us. And as usual, the chat never disappoints, lots of folks in the chat and we appreciate that. This is not a topic that’s going to go away. It’s getting more news, “News at 11.” There’ll be lots and lots of sessions on this as we go.

Please register for CUI’s State of Canada Cities in December. The links on the thing there. We just launched a big dashboard program for local economies. Main Street Metrics. It’s also in the link. And I know lots of you are following that.

And we want to thank Maytree for its leadership over a number of years on this file and particularly for the papers that it’s been publishing that Alan was involved with Carolyn and Tyler. So thanks for joining us, everybody, on CityTalk. And we look forward … We’ve got lots of things still to talk about, including the military lands. So next time, we’re going to get on that one. Thanks, everybody. Thanks for joining us.