I like to think of real estate as a downstream industry. What I mean by this is that the demand for space — whether it be housing or office space — happens downstream from other underlying economic activities.

For example, if someone creates a successful business and then hires a bunch of new employees, at least two things happen. The company now needs to consume more office space, and the employees of this successful company will likely demand more housing. Maybe they're relocating for this new job, or maybe they just got a pay increase and now want to consume more housing.

Whatever the exact case, real estate is the tail of the dog, and the new and successful company is the dog itself. Sometimes real estate gets mistaken for the dog itself. Rising real estate values become a substitute (albeit a poor one) for genuine economic growth.

But this does nothing to help overall productivity and innovation. And eventually you'll need to find some bonafide dogs. That's why I think this recent op-ed (which was presented in partnership with Shopify) is an important one:

But nation-building isn’t only cranes and concrete. It’s also the builders who start companies and create new industries. If we want a prosperous future, Canada can’t just be a place that builds big things; it has to be a place that builds new things. A Founder Nation.

Our growth challenge isn’t just shovels in the ground. It’s whether new businesses are forming, whether founders have the tools and freedom to scale, and whether our economy is dynamic enough to let tomorrow’s builders outcompete yesterday’s incumbents.

I couldn't agree more. We need to build — in every sense of the word. Over-indexing on real estate alone is not sustainable long term. And I say this as a real estate developer who makes a living from monetizing space.

Here is a chart from Residential Club showing home price changes in America's 50 largest metro areas.

The month-over-month figure is between August and September 2025. The year-over-year figure is between September 2024 and September 2025. And the "shift since 2022 peak" is the change in home prices since each market's respective 2022 peak (not always the same date apparently).

A number of things stand out.

The month-over-month figures do not look encouraging. The vast majority of markets have gone negative. Of course, one month does not make a trend. The year-over-year column (which is how this table is sorted) looks more balanced, but the national average is still at 0%.

The most prominent outliers in the negative direction are New Orleans (which has been uniquely flat since the start of the pandemic in March 2020), San Francisco and Phoenix (which have both seen a double digit percentage drop since the peak), and Austin (which is down over 25% since the peak).

Austin is a prime example of what happens when you bring a lot of new housing supply to a market — prices come down. Earlier this year we spoke about apartment rents being down 22% from their August 2023 peak. These effects are also being heightened by increased outmigration from the city (previously the fastest growing US metro area).

Back to the office, I guess.

Even with the declines since 2022, most markets remain up significantly, with many smaller markets like Buffalo and Hartford continuing to show strong year-over-year gains. It is interesting to me that over 5 years later, we are still working through the market distortions brought about by the pandemic. The market is searching for a new equilibrium.

As many of you know, the Ontario Building Code requires multi-residential buildings over two storeys in height above grade to have more than one means of exiting the building. This typically means two exit stairs.

If you'd like to build something more ambitious than this, you generally have two options. One, you could design your second-floor homes to be multi-storey. I'm not a building code expert, but I've seen architects like Craig Race (and others) do this without triggering the requirement for a second exit.

Your second option is to apply for what's called an "alternative solution." This is basically a way of saying to the building department, "Hey, my design deviates from the standard prescriptive method, but it still achieves an equal or greater level of safety, performance, and functionality, so you should approve it anyway."

Last year, the City of Toronto sent a message that it was going to be more open to single-egress alternative solutions. It commissioned a report that looked at the feasibility of relaxing egress requirements for buildings up to four storeys and published a guide to help builders prepare these proposals. The goal was and is to encourage more missing middle housing.

So has it worked?

This past week, Pamela Blais shared her experiences on Twitter. She is trying to build a three-storey sixplex (Part 9 of the Ontario Building Code) with a single stair, so she submitted an ASP. It included:

• Fully sprinklered building

• Widened exit stair (1200mm vs. 900mm)

• Expanded landings (1650mm)

• Stairwell skylight for smoke exhaust

• Improved fire ratings (structure, suite separation, exits, and balconies)

• Balcony in every home for refuge or direct exit

And the city's response was: "Nope. This does not meet the required performance levels."

I can also share that we have had meetings with code consultants regarding the feasibility of doing a single stair in a six-storey building and the guidance we received was that there's no way an ASP would be approved. We would be wasting our time and money. All of this should make it clear that we're not there yet.

Thank you, Pamela, for sharing your experience. As one commenter on Twitter said: "A noble quest you are on."