This Twitter thread by Richard Wittstock of Domus Homes (developer out in Vancouver) is a timely follow-on to yesterday's post about housing supply, land-use regulations, and specific policies such as inclusionary zoning. What Richard clearly describes in his thread is the economic impact of a Community Amenity Contribution (CAC) that requires developers to provide 20% social housing.
This Twitter thread by Richard Wittstock of Domus Homes (developer out in Vancouver) is a timely follow-on to yesterday's post about housing supply, land-use regulations, and specific policies such as inclusionary zoning. What Richard clearly describes in his thread is the economic impact of a Community Amenity Contribution (CAC) that requires developers to provide 20% social housing.
" affordable housing. Even if you believe it is the right public policy approach, there is still a cost. Social housing doesn't just appear out of thin air.
In Richard's thread, the remaining market rate condominiums end up needing to be sold for $1,750 psf in order for the entire project to pencil. This is a significant number. But in this case, it is a result of these homes needing to shoulder the cost of the social housing. It is basically saying "housing is too expensive, so let's make it more expensive so that we can use some of the incremental proceeds to finance less expensive housing."
If the math doesn't work, developers will not build new housing.
P.S. Thank you Volodya Gusak for pointing out Richard's thread to me.
The Canada Mortgage and Housing Corporation (CMHC) just published its latest housing supply report for Canada’s 6 largest city regions (downloadable over here).
One figure that stands out is the increase in housing starts in the Calgary CMA — it was up almost 63% last year compared to 2020. This is a positive indicator for that market.
It’s also worth mentioning that Calgary’s supply is more evenly split between low-rise and apartment housing. This is in contrast to markets like Toronto, where 3/4 of all new housing is now “apartment”, and in Montreal, where the percentage is even higher.
" affordable housing. Even if you believe it is the right public policy approach, there is still a cost. Social housing doesn't just appear out of thin air.
In Richard's thread, the remaining market rate condominiums end up needing to be sold for $1,750 psf in order for the entire project to pencil. This is a significant number. But in this case, it is a result of these homes needing to shoulder the cost of the social housing. It is basically saying "housing is too expensive, so let's make it more expensive so that we can use some of the incremental proceeds to finance less expensive housing."
If the math doesn't work, developers will not build new housing.
P.S. Thank you Volodya Gusak for pointing out Richard's thread to me.
The Canada Mortgage and Housing Corporation (CMHC) just published its latest housing supply report for Canada’s 6 largest city regions (downloadable over here).
One figure that stands out is the increase in housing starts in the Calgary CMA — it was up almost 63% last year compared to 2020. This is a positive indicator for that market.
It’s also worth mentioning that Calgary’s supply is more evenly split between low-rise and apartment housing. This is in contrast to markets like Toronto, where 3/4 of all new housing is now “apartment”, and in Montreal, where the percentage is even higher.
We've talked about this before. If you live in New York City, you're probably about a third as likely to die from a transportation-related accident as compared to the average American. And if you live in Paris, you're probably about a third as likely to die from a transportation-related accident as compared to the average New Yorker.
These stats might feel a bit intuitive to you. Both New York and Paris are big and dense metros with high public transit ridership. And that usually translates into less car accidents. As for the divide between these two cities, Paris is in Europe. It's old. Most of its streets were built before the car had been invented. And all of these things are generally good for pedestrians. Makes sense.
But David Zipper asked a good question today: So what's going on with Canada? Canada is not in Europe (though some might argue that it sits culturally somewhere between the US and Europe). It's not that old. And it generally has a car-oriented landscape just like the US. So why is it that in 2020, Americans were 2.5x more likely than Canadians to die in a car crash? The trend lines are also diverging between these two countries. Between 2010 to 2020, US road deaths increased 19% on a per capita basis, whereas Canada's rate declined by about the same rate, according to David.
Ultimately, we are probably going to need Malcolm Gladwell to write a book about this so that we can really figure out what's going on. But in the interim, David does propose a few possible explanations ranging from Canadians buying slightly smaller vehicles to Canadians being slightly more law-abiding than Americans and so less likely to run people over. But one of the most persuasive explanations for me is that maybe our urban landscapes aren't actually the same.
More than a third of Canadians live in our three biggest cities: Toronto, Montreal, and Vancouver. And this number would be even higher if you looked at the full urban catchment areas of each. Either way, this is a significantly higher concentration than in the US, where about 13% of Americans live in the metro areas of New York City, Los Angeles, and Chicago.
Part of this difference is because the US has almost 9x more people and has many more big cities to choose from. But it doesn't change the fact that, despite our reputed love for things like forests and beavers, Canadians are actually quite urban. And as we have discovered, that's a good thing for pedestrians.
My view is that it’s time to get more granular with our reporting of higher density housing. In the above example, we are showing 3 categories for grade-related housing and only 1 for anything outside of that.
This is our national bias toward low-rise housing coming through.
We've talked about this before. If you live in New York City, you're probably about a third as likely to die from a transportation-related accident as compared to the average American. And if you live in Paris, you're probably about a third as likely to die from a transportation-related accident as compared to the average New Yorker.
These stats might feel a bit intuitive to you. Both New York and Paris are big and dense metros with high public transit ridership. And that usually translates into less car accidents. As for the divide between these two cities, Paris is in Europe. It's old. Most of its streets were built before the car had been invented. And all of these things are generally good for pedestrians. Makes sense.
But David Zipper asked a good question today: So what's going on with Canada? Canada is not in Europe (though some might argue that it sits culturally somewhere between the US and Europe). It's not that old. And it generally has a car-oriented landscape just like the US. So why is it that in 2020, Americans were 2.5x more likely than Canadians to die in a car crash? The trend lines are also diverging between these two countries. Between 2010 to 2020, US road deaths increased 19% on a per capita basis, whereas Canada's rate declined by about the same rate, according to David.
Ultimately, we are probably going to need Malcolm Gladwell to write a book about this so that we can really figure out what's going on. But in the interim, David does propose a few possible explanations ranging from Canadians buying slightly smaller vehicles to Canadians being slightly more law-abiding than Americans and so less likely to run people over. But one of the most persuasive explanations for me is that maybe our urban landscapes aren't actually the same.
More than a third of Canadians live in our three biggest cities: Toronto, Montreal, and Vancouver. And this number would be even higher if you looked at the full urban catchment areas of each. Either way, this is a significantly higher concentration than in the US, where about 13% of Americans live in the metro areas of New York City, Los Angeles, and Chicago.
Part of this difference is because the US has almost 9x more people and has many more big cities to choose from. But it doesn't change the fact that, despite our reputed love for things like forests and beavers, Canadians are actually quite urban. And as we have discovered, that's a good thing for pedestrians.
My view is that it’s time to get more granular with our reporting of higher density housing. In the above example, we are showing 3 categories for grade-related housing and only 1 for anything outside of that.
This is our national bias toward low-rise housing coming through.
