The City of Vancouver recently published this video talking about missing middle housing. For those of you who are following this trend (and reading this blog), there won't be a lot that is new in the video (although Uytae Lee is great). But I'm sharing it here, anyway, for three reasons. One, it's an example of Toronto being ahead of Vancouver, which wasn't the case with laneway housing. Vancouver started allowing these first. Two, it is further evidence that this shift toward intensifying low-rise residential neighbourhoods is really happening -- and gaining momentum -- all across North America. And three, the City of Vancouver is about to bring forward new multiplex housing policies. So now is a good time to get involved and say things.

The stated policy goal of inclusionary zoning is to to produce more affordable housing. We can debate who ultimately pays for this below-market housing, and we have many times before on the blog, but for the purposes of this post let's just focus on its stated goal.

Given this ambition, it makes sense to carefully measure the number of affordable homes produced. And that is ordinarily what is done: "We implemented this new policy on this date, and since then we have produced X amount of new affordable housing."

It is then likely that we will take X and form opinions on whether it was a successful policy or not. If X seems like a lot, then maybe we think it's a good policy. And if X doesn't seem like a lot, then maybe we think it was a bad policy, or perhaps just an ineffective one.

But what is largely impossible to measure with any real precision is the number of new market-rate homes that are now not being built as a result of a policy. Let's call this number Y. It is, of course, possible to come up with an estimate by looking broadly at rents across the city, plugging in some development costs, and seeing what pencils. But this is a rough approximation.

It does not capture the countless times that a developer has looked at a possible housing site, only to come to the conclusion that it is not feasible to build. There is no official Y figure. And any amorphous estimates of Y are going to be easy to ignore by the general public anyway. Unbuilt homes? Opportunity costs? What?

I am saying (okay repeating) all of this because I continue to feel like most people believe that development will just happen no matter what is thrown at it. There is a housing shortage, right? So developers should just do what they do best and build today. Surely they could if they were genuinely nice people and really wanted to. Hmm.

What many people seem to ignore (or not know) is that development, and in turn new housing supply, operates under this very simple decision tree:

• Find development site

• Underwrite said site

• If math works, seek capital/investors and then build

• If math does not work, do not build

• If math works, but capital doesn't like it, also do not build (most can't in this scenario)

• Repeat

Just because you aren't seeing or noticing something, it does not mean that it doesn't exist and that it's not happening behind the scenes.

Here's the thing about housing:

The delegates insisted on one hand that “housing is for living not speculation”, but on the other, emphasised the critical importance of real estate to China’s economic growth.

In other words, things are complicated. We want housing to be affordable to more people, but at the same time, we recognize that housing appreciation is kind of useful for overall economic growth. So we're a bit conflicted. And that may be why we tend to take contradictory actions.

Broadly speaking, the current playbook in Canada seems to be as follows: heavily tax new housing, force those who can afford new market-rate housing to subsidize those who can't, and then tax/ban foreign buyers.

Canada's new foreign buyer ban came into effect on January 1 of this year. And for the next 2 years, it prohibits companies and people who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada. (What is the definition of non-recreational?)

While this may sound good to some -- finally, more homes for Canadians -- we're talking about a relatively small portion of the market, which is likely why there's also little evidence that any of our foreign buyer taxes have been all that effective.

It's really hard to imagine this one working much better. But it certainly sounds like something.