Daniel Tencer: Build new cities

We are facing a housing crisis and our current politics is unequipped to manage NIMBYism. The answer is clear: build new cities from scratch.

By: Daniel Tencer

As of last month, the average selling price of a house was about the same in London, New York ... and Toronto. In fact, at an average of $1.089 million for all housing types, Greater Toronto is slightly pricier than metropolitan New York and just slightly cheaper than London.

Or, as one Toronto woman recently discovered, you can trade in a cottage in Ontario for a giant chateau in the south of France. And it's not just Toronto. Amsterdam ($607,350) — long known as one of Europe’s more expensive capitals — is now cheaper than Ottawa ($685,426). 

Vancouver, of course, is more expensive than any of those places. 

Are Canadians getting good value for money? Do these prices make sense? Something has gone seriously wrong with our housing market. To be sure, similar things have gone wrong with other markets — much of the developed world saw house prices soar during the pandemic, as millions lost their jobs. 

We can explore the role of super-low interest rates and central money bank printing in all this some other time. The notable thing is that the situation is worse in Canada than just about anywhere in the developed world. House prices here have risen faster than elsewhere, and no wonder: A recent report from economists at Scotiabank took stock of the housing supply, and found that Canada has the fewest housing units per 1,000 people of any G7 country. If Canada wanted to have the average number of homes for a G7 country, it would need to immediately add 1.8 million housing units.

And it’s going to get worse. Prior to the pandemic, Canada's population was growing at a rate of 500,000 per year — 400,000 net new immigrants, students and refugees, and about 100,000 in natural population growth. Not only do we have the fewest housing units per capita, we also have the fastest growth rate in the G7. Toronto is projected to house more people than London or Paris by 2040. What will house prices look like then? More than any of our peer countries, Canada needs a serious plan to accelerate housing construction, and it needs one now. 

The sort of “affordable housing” plans our political parties like to toss out at election time are pitiful in the face of this problem. Our strategy to date has been to densify; to try to build our existing cities upwards, instead of outwards, as much as possible. This is a good strategy. The policy mood has turned against suburban development. We don't want to build more suburbs because we've come to understand the real financial and non-financial costs of sprawl. 

But nor can we build in existing neighbourhoods, because of NIMBYism and the nature of our politics. In urban neighbourhoods as well as suburban ones, existing property owners work to keep new property owners out, restricting the availability (and therefore raising the price) of housing in their area. On the pretext of “not disrupting the neighbourhood’s character,” they can keep new residents out of their neighbourhood, and they will often get the backing of politicians, because homeowners outnumber renters at the polls. Further, existing owners reap real financial rewards from housing scarcity; there is no financial incentive to add more neighbours. 

So without sprawl and the ability to densify existing neighbourhoods, the only housing we can build is high-rise towers on former commercial or industrial land. The future of Canadian cities is grim: Paying huge sums for small apartments, driving long distances from one high-density cluster to another, looking out at the rows and rows of increasingly unaffordable suburban tracts that occupy 80 per cent of the city’s land area….

Smells like political trouble to me. Dissatisfaction and populist anger. 

So how about let's not do that, and instead do what Canada used to do, and what much of the world continues to do to this day: Build new cities. Not commuter-centric bedroom communities on the edge of town, but real, new cities.

Seriously. Why not, exactly? Designed properly, you could build a far more sustainable community — shorter commutes, closer amenities, lower energy costs — than by building townhouses on the edge of town and high-rises in railyards.

A new city would be an opportunity to “start from scratch” — to build a city from the ground up, using the best available ideas and technologies. We could build new urban neighbourhoods Canadians would be eager to move to. Why can’t everyone afford to live near the shops of Queen Street West, or the leafy streets of Shaughnessy Heights, or in the lively Plateau Mont-Royal? Far more could, if we stopped building dull suburbs and spiky skyscrapers, and actually built neighbourhoods like that. 

The idea would be to redirect the flow of capital (and people) from overstressed Greater Toronto and Greater Vancouver, to new locations. These new cities could and should be supported as a matter of policy — tax breaks to developers who build there, or companies that open factories/offices/outlets. Governments should relocate offices to these new cities, colleges and universities should be encouraged to open new campuses. Bring in Alphabet and the other Silicon Valley giants to experiment with smart-city technologies. (Just don't let them take over and do whatever they like.)

Let's identify a location in each region of Canada — Atlantic, Central, Western — to build a “15-minute city” from scratch. This is the kind of city in which residents are no more than 15 minutes from work, school, shopping or entertainment. The city would be “nodal,” with many “mini-downtowns” rather than a single concentration of high density surrounded by low density. It would mean building the kind of mixed-use neighbourhoods everyone always used to build, but which we literally made illegal in our suburbs, with their one-use zoning structure.

And make sure the city can grow over time. You might be planning for a city of 500,000, but learn from Canada’s past and prepare for the city to be five million one day. Keep everything on the street grid, no suburban cul-de-sacs or crescents. Our mistake with suburbs has shown us the problem with this type of urbanism: It creates neighbourhoods frozen in time, which can never be redeveloped as the city grows. Residents of these types of streets love the privacy and intimacy, but the cul-de-sac and the crescent, with their public infrastructure that is useless to everyone except the people living there, are the ultimate expression of NIMBYism.

Apply the Barcelona principle: Nowhere in this new city should be more than 500 metres from a metro/subway station. Build small, high-density areas closest to the transit node (high-rises and office towers) that also have common spaces that are a local attraction, like a park or lake or plaza. Beyond them, a ring of medium density townhouses and mid-rise apartments large enough for families, with shopping and schools within easy reach. 

Another way these new cities should learn from others' mistakes is to prevent land banking. Developers and speculators should not be allowed to sit on undeveloped land that has been zoned for development. Any land zoned for urban development should be subject to a high "vacant lot tax" until shovels are in the ground. 

Lastly, experiment with new housing models. How about trying the co-op housing model that has made Vienna and Berlin among the most affordable cities in the developed world? That kind of ownership structure might not work as well, culturally, in Canada, where people want to own outright. But some people might prefer it, and any innovation will help us get closer to the goal: Affordable housing and financial stability for all urban dwellers.

Otherwise, it won’t take long for many more Canadians to realize they are better off moving to that chateau in the south of France. 

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