2 Federal Ministers Discuss Canada’s New Housing Plan

[00:00:00] Welcome to the Canadian Real Estate Investor, where hosts Daniel Foch and Nick Hill navigate the market and provide the tools and insights to build your real estate portfolio.

[00:00:13] Welcome back to the Canadian Real Estate Investor podcast. My name is Daniel Foch and I am joined here by the lovely Nick Hill.

[00:00:20] Lovely. Thank you so much, Dan. What a lovely introduction.

[00:00:24] Dan, you had a busy weekend, didn't you? I mean, you know what I did over the weekend?

[00:00:30] I went up north and helped Johnny open his cottage on the French River, which was a ton of fun. I got in the water, but we spoke that day and you were doing something quite different.

[00:00:41] Tell me and our audience here what you did over the weekend.

[00:00:44] Yeah, while you were playing hooky, I was working. So as our listeners know, I'm sure any good Canadian should know that Canada's housing plan came out on Friday.

[00:00:55] Twitter was like a fun place on Friday. Real Estate Twitter was just lit up about this housing plan and there's just a lot of stuff shared about it.

[00:01:06] So I was doing stuff related to that, Nick.

[00:01:08] Yeah, and I think we're going to do a full episode on that because I know we both went over, even though I was off having fun.

[00:01:18] I didn't have time to go over it and I think we're also going to do a full webinar on it, Dan, because it does deserve to be unpacked like that, I believe.

[00:01:27] Yeah, I figured this document was significant enough that we had to make it the topic for our first free webinar of the year.

[00:01:33] I was planning on doing something maybe on power of sales or vendor take back mortgages as the first webinar, but then this came out.

[00:01:40] So we'll push those to a later date, but we're basically going to do a free webinar walking through the plan in detail and providing insight on investment opportunities that are presented by it

[00:01:51] and how to capitalize on sort of the changes that we could see in the housing world and policy world.

[00:01:56] And you know that we've been focused on this stuff for a while.

[00:01:59] We've seen a lot of these things coming and seen a lot of the opportunities that would come with it.

[00:02:03] We want to be on the forefront of this stuff.

[00:02:05] So if you want to get on that, click the link in our show notes or I think it should be realist.ca slash webinar head over to that.

[00:02:12] That'll be the same link in our show notes.

[00:02:14] It's going to be on either a sorry May 8th or 9th.

[00:02:18] We're just locking in a date, but it'll be one of those two days and you'll be able to join our free school community to become to be part of that.

[00:02:26] And it'll be a live webinar where we're going to go through every major policy on this that will impact real estate investment.

[00:02:31] Yeah, exactly. And we're going to start to do these free webinars monthly on different topics by the way.

[00:02:37] So you know the VTB's power of sales I think are huge.

[00:02:41] But this one is just so timely that we thought it would be fitting for this to be the first one.

[00:02:47] It'll be linked in the show notes.

[00:02:49] It'll be on school.

[00:02:51] It'll be links in our Instagram.

[00:02:53] So lots of good ways to find it.

[00:02:55] But what are we here to talk about?

[00:02:57] Enough is enough.

[00:02:59] Can you tell me what you did this weekend, Dan?

[00:03:01] This weekend I spoke with two members of the Canadian government.

[00:03:05] And who were they?

[00:03:07] So the first one was Minister Sean Frazier, who is the Minister of Housing, Infrastructure and Communities of Canada.

[00:03:14] I thought we said we weren't going to do politics on this show.

[00:03:18] Yeah, so that's the funny part.

[00:03:20] We did say that.

[00:03:22] And I posted that I was going to be doing this interview on Twitter and I got a lot of flack for it.

[00:03:25] You know people saying, oh, we can't become shills or we can't become a mouthpiece for the government, etc., etc.

[00:03:31] Yeah, for sure.

[00:03:33] And you know we have always wanted to make sure that we are balanced here on the show, right?

[00:03:41] I think that's the thing that people enjoy about us.

[00:03:44] And even I was a bit concerned about losing what we originally connected with the current government when we initially connected with them.

[00:03:52] So how did you do, what did you do to balance this out?

[00:03:56] Yeah, so I thought it would only be appropriate to balance the scales by also having a member of the Shadow Cabinet on the show.

[00:04:06] Shadow Cabinet? Why does Shadow Cabinet sound like an office themed Jason Bourne film or something like that?

[00:04:15] Shadow Cabinet.

[00:04:17] The final boss of the corporate world.

[00:04:19] Either that or it's like a heavy metal or horror movie or something.

[00:04:23] Okay, so anyways for the politically ignorant such as myself, what the heck is a Shadow Cabinet or a Shadow Minister?

[00:04:35] So the official opposition Shadow Cabinet in Canada is composed of members of the main opposition party which is the Conservative Party of Canada right now.

[00:04:44] His Majesty's loyal opposition, which is so funny to say his Majesty right now but and is responsible for holding the government to account.

[00:04:53] And for developing and disseminating the political party's policy position.

[00:04:59] So keeping the party that's in power accountable.

[00:05:03] All in the good name of his Majesty.

[00:05:07] Exactly.

[00:05:09] Yeah, so members of the official opposition are generally referred to as opposition critics but the term Shadow Minister which is generally using other Westminster systems.

[00:05:21] So I guess systems that come back from you know old old England is also used.

[00:05:28] Yeah, so to balance things out we also got Scott Acheson Shadow Minister for housing to do an interview so that nobody can claim that we have a political bias.

[00:05:40] Because we don't.

[00:05:42] You know I will say though that Shadow Minister is a very very cool title.

[00:05:46] We like to look at things from both sides from all angles on the show if you've been listening to us for a long time you know that and if this is your first time tuning into the show to hear these amazing interviews that Dan conducted.

[00:06:03] You know know that it is important for us to analyze things and look at them from all perspectives to best serve our audience.

[00:06:13] Yeah, yeah that too.

[00:06:15] So people were quick to jump on me for political involvement on this one when they saw my interview when I announced that I was doing the interview with Fraser and the truth is from my perspective that this document that came out on Friday is incredibly important.

[00:06:28] This this housing plan.

[00:06:29] I think people want to think that me doing an interview with the government is us serving the government when the truth is it's us serving our audience and any further clarification that we can get on a housing plan that is going to have meaningful impact on real estate investment on the housing market for at least the next 18 months that this government is in power is a really good opportunity.

[00:06:52] And that's not an opportunity that I wanted to pass up.

[00:06:57] And honestly, I feel like we did get a lot of good information from both discussions.

[00:07:03] Yeah, exactly.

[00:07:05] So buckle up everybody we've got two interviews with two politicians in here.

[00:07:10] So this is going to be a bit of a longer episode.

[00:07:14] But before we jump into the interviews Dan are there any major takeaways that you want to discuss?

[00:07:20] Yeah, so I guess like I just to clarify from the politics perspective I'm kind of of the opinion that the economy actually runs everything and that people vote with their dollars more than they actually do with like voting.

[00:07:33] And politicians kind of just facilitate facilitate that like they're just the mechanism for for that sort of system so it's almost like a libertarian but but more like just purely economic perspective on politics and that's why a lot of this stuff like this is why I can detach from this a lot.

[00:07:49] And I think that's probably been relatively critical of certain things lately but it's easy for me to not be partisan because I really just think that the economy runs everything.

[00:07:59] Yeah, I mean not exactly a takeaway from the interview but really great insights and something that you know you and I discussed on the show for the last few years.

[00:08:08] People vote with people vote with their dollars and you know the most powerful thing out there is consumer sentiment.

[00:08:14] Yeah, yeah I guess I do owe you a takeaway.

[00:08:17] My actual big takeaway was that I was surprised to see how much government people work outside of the nine to five and on weekends honestly that was like the biggest thing.

[00:08:26] And so maybe my cynicism towards the public sector has changed as a result of this.

[00:08:32] Yeah I think Minister Fraser was actually wearing a suit when he had his headset on on a Saturday afternoon so there you go.

[00:08:39] But I think it does say a lot that the housing minister was willing to have a discussion with you given how critical you know we have been about some of their policies not about them as human beings.

[00:08:52] We don't play like that on the show but we have called out some politics and some policies and some legislation and lack thereof.

[00:09:00] And I listened to the interview because you conducted it without me.

[00:09:04] Sorry about that.

[00:09:05] No, it's okay.

[00:09:06] I was off.

[00:09:07] Doing French room stuff.

[00:09:08] Having a fire up North.

[00:09:10] Yeah but I had the chance to listen to the interview which is funny because I don't listen to a lot of our podcasts right?

[00:09:16] I write them a research that we do.

[00:09:18] Let's be real you listen to every single one.

[00:09:20] No, I mean I did back in the day but I don't anymore it's you know we're busy.

[00:09:25] So it was really fun for me to listen to another both they both run about 25 to 30 minutes each.

[00:09:32] And honestly man I think you handled them really really well.

[00:09:34] You were very well spoken straight to the point kind of just hard ball enough questions without being like gotcha journalism.

[00:09:42] It was good.

[00:09:43] I was really impressed.

[00:09:45] Yeah, I mean execution is really the big question here and I think that you know like that's where we had been critical in the past.

[00:09:53] And that's sort of what I start the discussion off with and this is a government who is obviously not in a polling position that their electorate is confident with their execution.

[00:10:04] And I'm not just going to sit there and kind of like berate them for that you know.

[00:10:09] I mean it would just not be serving anybody for me to just constantly hit them with hard balls or point the finger about you know the past or whatever.

[00:10:17] I think that like the point is we have a very cool opportunity to have a very pointed discussion about something that matters a lot to our audience.

[00:10:24] Yeah man I couldn't agree more.

[00:10:25] I think it would have been a bit of a waste of everyone's time if you were just kind of sat there and argue with them about whose fault things were and whatnot.

[00:10:35] Rather than actually discussing the housing plan and trying to extract as much information on you know how they actually plan on actually doing it right because that is the whole thing they need to actually act on this stuff.

[00:10:51] So as I said really well done and I'm looking forward to re listening to this episode because I will for sure tons to unpack.

[00:11:00] Yeah for sure. And like I said my goal is to serve our audience and we did have a lot of discussion about the housing plan.

[00:11:05] One thing became abundantly clear to me regardless of the outcome of the next election both individuals that I spoke with feel that investors do play a vital role especially small investors like the ones who listen to this show do play a vital role in bringing on that agile affordable housing supply.

[00:11:21] That we're going to need over the next couple of years to solve this problem.

[00:11:25] This episode will come out on the day of the federal budget which is the Tuesday.

[00:11:31] So without further ado let's jump into these two interviews you will hear a quick break between the interviews and I introduce each person that I'm speaking to at the beginning.

[00:11:40] So enjoy.

[00:11:42] Okay thanks a lot for joining us today Minister Frazier really appreciate you making the time to reach out to stakeholders in the real estate space especially I think we're we like to think of ourselves as a necessary part of solving the housing problem right now.

[00:11:57] And I think that there's a fine line between like the financialization of housing speculation which has been an issue in the industry and then investment and creation of new units multiplexing etc.

[00:12:10] And it feels like I think you've balanced that really well with this policy so I guess I want to start off with maybe probably one of the harder questions which is you know this isn't immediate problem I think and I think a lot of people want to to point the finger and

[00:12:24] I think the plan that you've put together is full of amazing ideas we're going to do an entire episode unpacking it but it seems that pull numbers suggest that you know Canadians might not be confident in the current government's ability to execute on these ideas right now.

[00:12:40] So what are you going to do to make sure that all of these things come to life with the sense of urgency required to actually solve this immediate problem.

[00:12:47] Look I think it's fair for people in a democracy to approach ideas with a healthy dose of skepticism. We're not asking anybody to believe in promises we're making we're asking to assess the plan.

[00:13:02] The plan actually includes certain measures that are already in effect and being scaled up which will allow us to move more quickly but granted we should also acknowledge that a problem that in some ways has emerged over decades won't be solved overnight.

[00:13:15] So I think it's incumbent upon us to be transparent with people about the timelines under which we think we can achieve progress but to demonstrate urgency by actually showing progress by implementing the measures that are going to help people.

[00:13:28] Some of the measures that are open now to help those who are saving up for a down payment have already seen 750,000 young people start putting money in a tax free first home savings account others that will help with the amortization period.

[00:13:41] For example, we'll kick in as soon as this summer but some of the conditions were trying to create to foster a greater level of investment on a wider scale are going to take a couple of years to fully realize their potential because the buildings that they incentivize actually take a couple of years to construct.

[00:13:58] So some of the measures will have a more immediate impact. Some will play out over the next couple of years but we think that people will see progress not based on the statements we're making on the day the plan is rolled out but the progress that they see in the months and the

[00:14:11] years that follow the release of the plan.

[00:14:13] And how do you measure that progress just out of curiosity? I know it's a little off script but like what would you be looking for to make sure that your plan is actually accomplishing its goals?

[00:14:23] So there's a number of different factors that we're going to assess. I think housing starts as a pretty good indicator as to whether you're achieving progress.

[00:14:31] Now one of the challenges that you have is a number of environmental factors in the economy that month to month or year to year can impact the pace of housing starts outside of government policy.

[00:14:43] But if you're asking what outcomes I'm trying to achieve, it's at a more individual level. On the rental market, what I'm hoping to achieve is balance and supply and demand.

[00:14:52] And I believe all have succeeded in that regard. When somebody loses access to the apartment they have now, if they can find another one of a similar quality at the same price that they were paying before.

[00:15:03] If you're looking at non-market housing, my view is that we can't say that we've solved the housing crisis.

[00:15:10] If there's still people sleeping on streets chronically in this country, my sense is that we can achieve a level of affordability where if you're working in a job you can find a place to rent or potentially to buy depending on where you are on the income spectrum.

[00:15:26] At a reasonable level of your income, we signaled in the plan that we hope to get to a place where 30% of your income can go towards housing costs.

[00:15:34] And I think that's achievable. It will take some time to get there. But when people are able to afford a place to live based on that percentage of their income, when the supply and demand imbalance is cured as evidenced by being able to find another place at the same price if you have to move

[00:15:50] and when we don't have Canadians without a roof over their head, those indicators to me will be the ones that will make me feel one day we've solved the housing crisis.

[00:15:59] Awesome. I appreciate the insight. I think from most people's perspective, it's probably a long way to go. But like you said, I think it's a long run solution as well.

[00:16:10] I'd say most of our listeners would fall outside of the category of that taking a long time to build stuff. We are individuals who have probably what I would call the most immediate supply, so like a house that you could convert to a duplex or a triplex or a fourplex.

[00:16:24] I know there's some mention of policies like that in the housing plan. Do you want to outline any of those and also discuss what our listeners, people who own real estate or are interested in investing in real estate could do to help further advance the objectives of the housing plan, especially with the objective of creating more affordable housing?

[00:16:43] Thanks for the question. This is a huge opportunity because when we talk about building housing supply, a lot of the conversation revolves around what are we going to do to incentivize large-scale institutional investors to build out massive apartment buildings?

[00:16:59] And look, incentivizing those institutional investors, those really big developers, that's got to be part of the solution. But we have to incentivize more people taking part in the investment community that's going to be delivering more housing supply as well.

[00:17:13] So there are a number of things that we're seeking to do in that regard. And the first thing that we've got to do is actually make it legal to build those kinds of homes and more neighborhoods.

[00:17:22] It's no secret that I've been working with communities right across the country through the Housing Accelerator Fund to try to upzone communities. A lot of density in urban cores, near-trans stations, near-postsecondary institutions, but gentle density everywhere.

[00:17:37] It makes no sense to me that we're telling private landowners that they're not allowed to build a home that includes four units that could provide homes to more of their neighbors in the middle of a housing crisis.

[00:17:49] We're putting federal money on the table to incentivize changes at different levels of government to bring about the legality of that kind of housing.

[00:17:57] But it's not just the municipal zoning piece that we need to take care of and the faster permitting processes. We're also looking at different rules around mortgage loan insurance limits that's actually going to potentially allow for a higher limit for multi-unit buildings.

[00:18:13] So if you're going to convert a home in like my neighborhood, most of our homes, most of the apartments that exist used to be a single family home. That's not the case everywhere, but it is in some parts of Canada.

[00:18:22] And if we can actually create financial tools that make it easier to build those kinds of homes, we're going to unlock supply more quickly where it already exists.

[00:18:30] And of course, creating a new loan program for accessory dwelling units, a garden suite, a secondary suite, so we can get more supply on properties that may already have a home that seek to add another one.

[00:18:43] This is going to be tied in to the National Home Design Catalog as well, so we can create economies of scale. And if we can align the designs through the catalog, manufacturing through incentives and factories that could benefit big builders but also make those designs available to small builders

[00:18:59] and also align those with financing and municipal pre-approvals through putting conditions on our investments in communities, we're going to be able to create a scenario where a builder may be able to be able to say,

[00:19:11] if I'm building this property in that city, I can just do it. I don't have to go through a lengthy time consuming expensive process. I can just do what I do best, which is built.

[00:19:21] Yeah, no, it's an excellent point. I guess there's been a little bit of skepticism around the Housing Accelerator Fund because it seems to be sort of a bit more of like a pay for promises kind of thing with municipalities.

[00:19:33] How do you reconcile for whether or not they actually execute on the things that they say? Like I know it's a kind of cart before the horse issue but I know you mentioned some stuff about infrastructure spending in the plan.

[00:19:45] How can we actually make sure that all levels of government are doing what they say they're going to do and controlling for that?

[00:19:51] So it's not actually pay for promise, it's pay for progress but the progress that we're measuring is the legal framework that they put in place.

[00:20:00] We want to incentivize things that are within the control of the partners that we're partnering with.

[00:20:05] So the Housing Accelerator Fund gives a portion of the funding under the agreement up front but to actually unlock the rest of the funding, you get 25% each year if you implement the very specific measures you've agreed to implement

[00:20:21] and if you're issuing the permits that you've agreed to issue.

[00:20:24] So if a municipality that we've struck a deal with says after the first or second year, we're not doing this anymore, they're going to lose the balance of the funding.

[00:20:34] They actually have to go implement the measures that make it easier to build homes near transit stations where infrastructure already exists near post-secondary institutions.

[00:20:43] They actually have to issue the permits if they're going to expect us to make good on the obligations we've undertaken under the agreement which is to continue to provide funding.

[00:20:52] So we put protections in place to avoid the scenario where we cut checks for municipalities that don't implement measures and I think this is a strength of the agreement because it's actually the measures they implement that's going to drive progress.

[00:21:05] We don't want to reward or punish people for things that happen or don't happen in their community that are beyond their control.

[00:21:10] We want to create a landscape that makes it easier to build by incentivizing behaviors that are within their control and it's frankly exceeded my very high expectations.

[00:21:20] Awesome. I honestly didn't know about the 25% payment schedule so that pretty much answers the question right there.

[00:21:28] You mentioned development around transit. A lot of investors are interested in investing in transit oriented development.

[00:21:35] I think it's the way of the future. You think about things like automation, density.

[00:21:39] To provide some insight for investors, people who are in the acquisition mode of trying to find properties that can fall into this,

[00:21:49] what criteria did you use to decide what would become major transit station areas across the country?

[00:21:58] We have to recognize that this is not a one size fits all approach.

[00:22:02] Look, in large urban environments near subway stations and bus rapid transit stations,

[00:22:07] we're going to expect that you have the highest level of density that exists in your city which frankly also allows the transit station and transit system once it's built

[00:22:18] to have a base level of ridership that will allow the transit system to function as well.

[00:22:23] And if we're going to be investing in transit, we want to make sure we're investing in systems that can be self sustaining after they're built.

[00:22:30] So encouraging more density near those high frequency stations is going to be a big part of the strategy.

[00:22:36] But we're not necessarily going to insist that you can have 30 and 40 story buildings in small communities that don't currently have any

[00:22:45] and might be purchasing their very first mini bus, which is the kind of community that I call home.

[00:22:49] So we're going to look for different levels of density near different kinds of transit stations,

[00:22:55] but continuing to abide by the principle that if you're expecting federal investments in your infrastructure, including transit,

[00:23:02] you're going to invest in a way that allows that infrastructure cheaper and easier to maintain and make sure you increase density near transit to build more livable communities.

[00:23:11] We are going to undertake a period of consultation with different communities to understand when you're not dealing with those BRTs or subway stations in the GTA or Montreal or Vancouver,

[00:23:23] but instead are dealing with smaller stations and different kinds of environments and communities of different sizes.

[00:23:30] What level of density would be more appropriate? But we do want to ensure that if we're making investments in infrastructure, we're getting a good return on the investment.

[00:23:39] So to answer your question, I think if it's a big urban transit station that has high volume ridership, you should expect very high levels of density.

[00:23:47] But we're also going to be working to add additional density over and above what already exists, even in smaller communities where there is a smaller transit system.

[00:23:56] Awesome. Thank you. That definitely clarifies it. On that note, you mentioned some of the smaller communities.

[00:24:02] I'm from a small town myself just north of Toronto and there's a piece about building homes on top of shops and businesses, which I thought was a great idea.

[00:24:09] I see a lot of these sort of underutilized retail floor plates where they're old concrete structures with typically steel flat roofs that probably could accommodate at least one story of residential above it.

[00:24:19] Was this sort of designed with maximizing a lot of that single story retail buildings, especially in these smaller historic downtowns of smaller towns?

[00:24:27] Where did this idea come from? Do you think that this will eventually be scaled to things like the strip malls and those smaller towns?

[00:24:34] I do think it will be. And those are some of the kinds of things, but that's not a comprehensive list that you've shared.

[00:24:40] Everybody can picture these kinds of properties in their own communities.

[00:24:45] So if you're dealing with a downtown area that might have a few apartment buildings, a few smaller office buildings,

[00:24:52] but in the middle of it, you've got a big chunk of a block has one story shops or restaurants or a strip malls.

[00:25:01] You pointed out that you could see could accommodate more people.

[00:25:05] One of the strengths of this strategy is that it's going to allow more density in a way that doesn't undermine the activities that's already going on on a particular property,

[00:25:14] but nevertheless allows you to add more density.

[00:25:17] This is a way that's going to allow communities continue to function, maintain the character that they've always enjoyed,

[00:25:23] but still allow more people to call a particular neighborhood home.

[00:25:26] And frankly, it's going to help deliver more business to the shops or restaurants that may exist underneath these buildings.

[00:25:32] I can think of a handful in my own community where this is possible again, small town about 10,000 people.

[00:25:38] And there's a handful of opportunities that I'm eyeing up already about where we could build a little bit more density near the downtown core.

[00:25:47] So this is not a brand new idea.

[00:25:49] I know Minister Freeland is actually a great champion for this particular solution, but this is something that people are doing.

[00:25:56] Some of our programs have facilitated investments of this kind.

[00:26:00] It's building specific.

[00:26:01] You can't put additional stories on every building in Canada,

[00:26:04] but we decided we wanted to raise awareness of the opportunity by having a car vote under the apartment construction loan program for these kinds of projects.

[00:26:13] When we see that there's $100 million reserved specifically for this kind of initiative, we expect it's going to generate more interest.

[00:26:20] And if we get more demand than that car vote, the good news is the program will still have eligibility criteria broad enough to accommodate additional projects should the demand be there.

[00:26:29] Awesome.

[00:26:31] You mentioned the apartment construction loan program.

[00:26:33] And I know it differs a little bit from the MLI select program, which a lot of our listeners use, which is obviously through the mortgage bond program, which you have increased the issuance of the bonds.

[00:26:44] And I guess now the government has become a major or committed to becoming a major purchaser of those.

[00:26:48] There are some mentions about speeding up the process, especially with the apartment loan construction program.

[00:26:54] Is this something that people can expect to translate also in some of the resource and infrastructure also going to be applied to programs like the MLI select program?

[00:27:04] And maybe it's a tough question to answer because I know it's an insurance policy rather than direct lending, which you do through the apartment loan construction program.

[00:27:11] But is there any hope that we might see shorter MLI processing times in the next couple of years?

[00:27:16] So the answer to your question is what as whether we can see shorter processing times is yes, but not because we're implemented in the same kind of reforms because of the distinction that you've just articulated very well.

[00:27:29] So the MLI select actually we have seen a lot of progress as they clear through a backlog of applications and I think we can get to a place where we see more consistent timelines in the 60 day range.

[00:27:41] And it's really important for people when they make an application for support that they're still able to have the math work when the decision on the application actually comes through.

[00:27:53] If the pro forma doesn't work at the end of the application process, you've wasted a lot of time and energy putting together a proposal that no longer exists.

[00:28:02] And that was particularly important when we saw we were in an inflationary environment as interest rates were going up. Although I think we can make significant progress, we're also going to benefit should the Bank of Canada signal that rates remain even or could come down in the months ahead,

[00:28:17] that there will be less risk for investors as a result of the changing direction of interest rates. But when it comes to the ACLP where we have a direct lending program, sorry the apartment construction loan program which is a direct lending function,

[00:28:30] we have an opportunity to speed it up in a number of ways. So yes on faster processing to MLI selects to run through CMHC, but from a policy point of view, adopting a frequent builders model so we can have a streamlined application particularly when we already have information about the borrower,

[00:28:45] we can go faster. But the portfolio approach is going to be a game changer. If you've got five projects, we're going to entertain single applications. And we're going to look at applying the eligibility criteria across the portfolio which will create significant more flexibility for the applicant on a suite of

[00:29:04] projects rather than having to meet the eligibility criteria necessarily on every single building within a project. So this is going to be faster timelines and more flexibility in the project design by adopting a portfolio approach and faster timelines in particular for borrowers we're familiar with who have a history of performance.

[00:29:21] So how would borrowers like we've never really done any work with the RCFI or now ACLP, how would borrowers go about I guess acting on this and getting access to those funds? Like do they contact government directly? I guess there's information on CMHC website.

[00:29:36] Yeah, yeah, CMHC. So we've created a direct lending program but this is not one very it's very important that this is not one where we have political interference on what needs to remain a commercial transaction because CMHC is going to actually assess the risk on appropriate financial terms.

[00:29:53] We're not picking favorites in my ministerial office, but we're creating programs with flexibility that allows CMHC to accelerate the pace of lending and to identify projects with a greater degree of flexibility to meet criteria.

[00:30:06] Now there are criteria you have to meet before you're eligible particularly around affordability for example because a certain number of the units have to be offered at a price that's based on the median market income and 30% of that income has to be able to afford a certain number of units in the projects that that program funds.

[00:30:22] But visit CMHC's website, get more information. It has everything you need to know about how to tap into the program if you're looking to tap into opportunities to achieve low cost financing in exchange for commitments around affordability and other measures that are a priority for the government.

[00:30:37] Awesome. I want to be mindful of your time. I think I have maybe two more questions here. The first one is about the policy mentions or sorry the plan mentions making the math work for home builders especially there's a tax element to that.

[00:30:50] And then I think that there's some sort of kind of more deflationary hopefully deflationary innovations in the construction space. Can you talk a little bit about introducing this accelerated capital cost allowance and how we can hopefully see construction costs come down and maybe build timelines speed up as a result of some of the innovations mentioned in the plan?

[00:31:09] Yeah, sure. So we're not going to solve the housing crisis if we don't dramatically increase the pace of building and we're not going to dramatically increase the pace of building if we don't reduce the cost of building for home builders.

[00:31:20] There are a lot of builders who develop plans applied for permits on the basis of lower pandemic era interest rates that no longer apply. The prices of materials, labor, land supplies, interest have all gone up and it's created a really challenging economic environment for home builders.

[00:31:36] There's things we can do to help. We can't fix it overnight, but we can offer relief overnight that it's actually going to help change that mathematical equation so the math works when somebody's figuring whether projects are going to pencil out.

[00:31:50] Taxes is one way the federal government can actually help. So we've got the GST on purpose built rentals and now we've introduced an accelerated capital cost allowance that will allow a faster write down of the value of the asset that you apply your capital into, particularly in the first few years of a new project.

[00:32:05] This is going to kickstart a more profitable equation for builders that will incentivize them to build more quickly and then we'll allow them on the back end of a project to plow that money into their next project earlier.

[00:32:16] This is not something that we've invented for the first time. Canada has done this before. We had measures like this through the 60s into the early 70s that led to the fastest rate of home building in the country's history, and we're borrowing on lessons from our past to see if we can do it again.

[00:32:30] Now there's other things we can do as well to reduce the cost, including low cost loans by passing on the federal rate of borrowing that we get in exchange for commitments around affordability, including loans that can help reduce the cost of building even for the backyard suites we've talked about.

[00:32:45] But we also want to leverage public lands to make sure that we're reducing the input costs for a lot of home construction in this country in a way that's going to allow more builders to build on existing federal lands in a way that can allow them to offer lower prices for the resident who will eventually live in the homes on those lands.

[00:33:05] So there's going to be more to say on that in the days ahead, but if we deal with lower taxes, low interest loans and public lands being made available, we're going to be able to reduce the input costs on building that will have faster construction and lower costs that will provide lower cost loans for Canadians as well.

[00:33:20] Great. In regards to the mortgage fraud piece, I know it's at least what I've seen in kind of in the Twitter sphere. There's a bit of speculation around it seems like more of a consultation first approach.

[00:33:33] Is there any timeline on that? Like with the CRA connection to lenders to verify income? I imagine it's an easier said than done thing, but what can people expect that to look like over the next year?

[00:33:42] So, look, I want to go as fast as I can. The reality whenever you're putting a policy in place is that you do need to talk to people who will be impacted by the policy positively and negatively to make sure you get it right.

[00:33:53] But this is not something we want to sit on for years because we actually think this can have a very quick impact that will have a positive reverberation through the housing market in Canada.

[00:34:04] For those who aren't familiar with the issue, one of the things that happens in the world is that people obtain mortgages based on inflated statements of their income.

[00:34:13] That allows them to secure a higher mortgage that drives up the cost of buying for everybody. If we actually can have a clear rules around income verification by looking more quickly at CRA's information when somebody is applying for a mortgage while we protect their privacy rights,

[00:34:35] we can actually develop a system that is more efficient, creates more reasonable mortgage levels based on actual not stated incomes, which will reduce pricing pressures in the market.

[00:34:47] That's going to have a really positive impact for home buyers across the housing market in Canada. But we do want to make sure that we get the rules right around privacy and develop a plan that can be easily executed.

[00:35:00] And we have to do a consultation. But this is not something we plan to do many years down the road. We want to do it as quickly as we can.

[00:35:07] Good. I love to hear that. The Regal Payment History on Credit Scores, obviously a great credit-building tool for tenants who haven't really had the chance to have those big payments and history on their credit score.

[00:35:18] But it could also potentially disincentivize nonpayment, which I think landlords might like to hear. Was there any consideration here given to that disincentivization and trying to reduce some of the friction and backlog?

[00:35:28] I know this is more of a provincial matter, obviously. But the friction and backlog that we're seeing in some of the landlord and tenant systems that from my perspective creates a lot of negative externalities in the rental market?

[00:35:37] It can. But we're starting with the policy that was primarily motivated by creating an opportunity disproportionately for young people but not exclusively young people to build credit where they don't have a credit history.

[00:35:50] Just to clarify what the mechanism looks like today and we'll reserve the ability to use regulatory authorities later on that could have a more broad application.

[00:35:59] But there's two things that we're doing specifically in this regard. One is adding the ability to use your rental history to build credit to the mortgage charter, which creates an opportunity for a renter to talk to their financial institution to say,

[00:36:12] we would like to be able to report our rental history and count it towards our credit. The second thing that we're doing is embracing consumer directed finance or open banking as some people call it, that gives someone an option to more easily disclose through a fintech their

[00:36:28] rental history in a way that can build their credit. There's actually a fintech in Canada, Boroughel who does this now and it's going to make it easier for consumers to use services like that.

[00:36:39] So right now this is going to be an option that consumers can use. And depending on how we see it play out in the real world once we try this will look at whether regulatory authority would be appropriate to have it operate in both directions.

[00:36:51] But right now it's something that a renter is going to be able to choose to do rather than something that just happens automatically without a person's consent.

[00:36:58] Awesome. Yeah, I think there's another Hamilton based group front lobby as well. So a lot of Canadian fintechs playing in that space.

[00:37:04] And there's going to be a lot more when we create the framework. It's a huge opportunity to drive productivity in Canada.

[00:37:09] For sure. Last one because I know you're short on time here. We're hoping to get this episode out on Tuesday morning. So I know the budget comes out on Tuesday.

[00:37:16] Where would you recommend people look within the budget for an expansion of these ideas to try and get a little bit more of indication of what how things are going to look like?

[00:37:25] And then also is there anything else with kind of with the last question that you want to mention to the audience before we wrap up?

[00:37:30] Yeah. So look, first the budget's coming out on Tuesday. So keep your eyes peeled.

[00:37:34] I even I don't get a chance to review the budget until immediately before it's it's reveal.

[00:37:42] Now, thankfully the housing plan was published as a standalone document ahead of time.

[00:37:46] So you can find the bones of the plan in the document that we published just over the past few days.

[00:37:51] But I fully expect there will be a dedicated chapter that reiterate some of the measures around housing with a little more detail around what they're going to cost where applicable timelines for implementation and details about how they may impact different sectors of the economy or different sectors within a community.

[00:38:07] So you should be looking for a dedicated housing space in the upcoming federal budget.

[00:38:11] To your last question, if I can leave a message with with your audience, we don't want to play at the margins. We want to solve the housing crisis.

[00:38:20] There's things we can do in the short term, but we know that this is going to take commitment over a number of years to actually make the investments necessary to cure the supply gap to make it easier to rent or to buy a place and to ensure people who can't afford a home

[00:38:34] nevertheless have a place to sleep at night that is safe. We think the range of measures that are going to help reduce costs, make it easier to build and to change the way that we manufacture homes is really going to help drive the supply, which is at the core of the crisis that we're experiencing.

[00:38:50] But if there are new solutions, don't assume that just because we published a plan, we're not willing to do more. If we uncover new ideas that allow us to scale up the pace of home building this country, we want them.

[00:39:01] We don't come up with ideas that are going to solve major problems when we sit by ourselves in boardrooms on Parliament Hill. We come up with ideas by talking to people who are actually implementing solutions.

[00:39:12] So participating in conversations with industry, consulting with those who experience problems and those who solve them is how we're going to drive change.

[00:39:20] There's more feedback. Make sure you're talking to your local WMP. Make sure you're reaching out to government officials because we're constantly searching for new ideas that we can implement to help solve these challenges faster than we're already on pace to.

[00:39:31] Awesome. Thank you. I really appreciate your time and I think this has shed a lot of light on the plan that I do feel has a lot of great ideas in it. I hope to see you execute the most success over the next little bit.

[00:39:43] Thanks very much. I appreciate it.

[00:39:45] Okay, Mr. MPH, just send thanks for joining us today. And I thought it would be interesting because we had Housing Minister Frazier on the show to discuss the housing plan that was released on Friday and in the interest of being a balanced show and not really picking sides politically.

[00:40:02] And this is honestly our first sort of foray into having any political discussions on the show. We wanted to make sure that we had a balanced discussion in that regard and gave both sides of the story.

[00:40:11] So to start off, are you able to just sort of describe your role as a shadow housing minister in the federal government?

[00:40:18] Yeah, of course. First of all, let me say it's great to be here. I'm a huge fan. So it's a thrill for me to be chatting with you today.

[00:40:27] I'll say that shadow ministers or critic roles are structured in sort of the same way the government is. So the way our system operates is there's the government, the cabinet is the government.

[00:40:38] And then the official opposition or the party with the second most number of seats forms what's the official opposition and their job is to oppose, to be critical and to challenge the government and hold them to account as it were.

[00:40:54] So the official opposition is structured the same way as the government. So there's a minister of housing and conversely, we have a critic or a shadow minister for housing. That's my role.

[00:41:04] And so my job is to hold Sean Fraser to account to challenge him on his policy ideas and some of the things they say.

[00:41:12] But also, to be focused on presenting policy ideas so that if we do form the next government, we can hit the ground running.

[00:41:23] So when Pierre Polyev became the leader of our party and asked me to be the critic for housing, he wanted me to do that because in part because we said a lot of the same things during that leadership race.

[00:41:37] But also because he said, you know, you have so much experience as a former mayor and municipal planning guy years of experience and how the development approvals process works.

[00:41:47] You understand the process better than I do. And that's important at the federal level when you don't understand that. So I get to travel around and talk to housing providers, municipal counselors and mayors, developers, provincial politicians,

[00:42:02] and talk about policy prescriptions that sometimes are different depending on where you're in the country. So it's a kind of a two-part job. Challenge Sean Fraser and come up with some good ideas.

[00:42:14] And some of those ideas I share with Sean because, you know, housing is one of those things as you know, everything we do, it can take years for it to have the impact you need to have.

[00:42:24] So it's a bit of a dual role.

[00:42:27] Yeah. Awesome. How have those conversations you described gone? Like I know municipalities get a lot of flack for being sort of the last line of defense when it comes to the policy side of things and getting housing approved, especially.

[00:42:41] Does it seem like we're sort of receptive at all levels of government now and that we'll actually start seeing some meaningful progress over the next decade or so?

[00:42:50] Yeah, I would say that it's, you know, it's, well, first of all, housing is definitely the issue of the day. I mean, all levels of government across the country recognize the crisis that we're in.

[00:43:06] I would say that I'm a big believer and I think the fact, bear it out that municipalities are a significant part of the challenge in getting more units built because they are on the front lines of the development process.

[00:43:21] Municipalities know that. Municipalities are also very quick to point out that they have major infrastructure challenges and part of the reason the costs are high is because they don't have the resources to pay for the infrastructure, upgrade the infrastructure, replace infrastructure,

[00:43:38] and therefore they're victims in this process. There is an element of truth to that and they do need some help, but the problem is that the process itself has become way too cumbersome.

[00:43:54] So there's the issue of municipal costs and the cost of growth, but there's also the issue of the process of approving new development and higher density and things like that.

[00:44:07] And that of course, as we know is very much about the approvals process and the public hearings and the rezoning and that kind of thing.

[00:44:15] And people that just don't like change. Most people don't pay attention to politics and I can speak to this from my 15 plus years as chairman of a planning committee, you know, and the development application comes along for something down the street from your next door to you.

[00:44:29] If it's a surprise to you, you're likely to be opposed to it and people often don't like change because they think they have a lot of reasons why they don't like change, I guess, but this is part of the problem.

[00:44:39] And of course, local councils are elected by those people who live there already. And so they often are inclined to sort of just back off and go with the wishes of the local neighbor, the classic NIMBY situation.

[00:44:51] So, you know, those delays cost a bit of money and time and for most developers that was an annoying thing.

[00:44:59] But, you know, the carrying costs of these projects wasn't all that much because of course, borrowing costs were quite a bit lower.

[00:45:07] Well, money's not free anymore. And those delays add massive costs to the ultimate product. And then of course, oftentimes there's studies and more engineering and more of this and more of that.

[00:45:19] And so it all adds to the cost. And so those delays at the local level, the often long, painful process to get permission to build a home in this country in many ways is the same as it is at every level of government.

[00:45:34] We have too much government, too much bureaucracy and we don't make decisions. I'm not saying, you know, throw the rulebook out the window, but we follow the rules and make decisions instead of deferring and hoping maybe things will go away.

[00:45:47] Makes a lot of sense. So in that regard, and been more pivoting back to your role as a critic, what are your thoughts on the housing plan that came out on Friday? Did anything stand out to you as really good or really bad?

[00:46:01] I mean, there was a lot of ideas presented there. I think that there's a lot that could be done. I think execution is going to be a challenge. But what really stood out to you in that plan?

[00:46:09] I would say what stood out to me is that it sounds a lot, the expression, the more things change, the more they stay the same comes to mind. I guess what I'm struggling with and I'm not going to be ultra partisan here.

[00:46:25] What I'm struggling with is in 2017, the Prime Minister stood in front of a construction project with lots of workers around in hard Hamilton and talked about his national housing strategy.

[00:46:37] Audemars von was a big push behind getting this done and he did great work to convince the government that he needed to do this. And I'll quote you, the Prime Minister stood as a quote, it was going to be a life changing transformational housing plan.

[00:46:53] And so you fast forward into all the various different iterations of the plan and the various different programs. And we found out that they didn't really track how well they were doing.

[00:47:05] There were all kinds of other factors that impacted whether or not they got the programs rolled out. And now fast forward to today where house prices have doubled, rents have effectively doubled, mortgages have doubled, interest rates are crazy.

[00:47:18] The crisis is even worse. And now we have, I think he described this as the most ambitious plan ever. And so, you know, there's a they're using a lot of YIMB language, yes, in my backyard language and a lot of the policy ideas are good ideas.

[00:47:37] And what I struggle with is whether they'll get the job done. I think that's something this government is sort of known for is the very good at the photo op, very good at the talking points, not very good on the follow through and I'm not convinced that much of it will get done.

[00:47:55] I don't want to be too critical, but I'm being critical. I'll use the housing accelerator as an example. This is one of the programs that wasn't announced on Friday. It's been something they've been working on. I think about 174 deals or something have been done with municipalities now.

[00:48:09] And of course, you know, it's a $4 billion fund and they keep announcing these deals with agreements between cities. I've asked to see some of those, any of those agreements, they won't share those. All I can gather is what they sort of announced in the news.

[00:48:24] They announced that, you know, the city is going to agree to do this and agree to do that and agree to this. And then they get their money and they get it in four payments over four years.

[00:48:34] But the only reason they won't get their fourth payment in these municipalities is if they don't complete the number of units that they sort of agreed they would complete but all the other things.

[00:48:43] We use the item four plexus as a right no matter where you are, right? So that requires zoning bylaw change. Most of the cities that have agreed to do this haven't done it yet.

[00:48:56] And so they've got to check from the government on the promise that they will do better. And as far as I'm concerned, that's the problem.

[00:49:03] So, you know, municipalities will happily take the money and spend it on infrastructure programs. But if they don't get the, you know, changes to their zoning bylaw done to permit four plexus as a right, there's no consequence.

[00:49:17] They still get their money. And I just think that that hasn't worked in the past. I don't know what makes them think it's going to work in the future. And we need to be focused on getting results as opposed to hoping for the best.

[00:49:30] Yeah. Great points. I always thought I proposed this at the OHBA thing that we were both speaking at that you could if you really wanted to balance the outcomes, you can always just give the money right to first time home buyers.

[00:49:42] And then because then they pay it, they end up paying the development charges on the brand new homes and then it ends up going into that growth pays for growth kind of concept.

[00:49:50] But there's probably some negative externalities I haven't evaluated in something like that in regards to the execution.

[00:49:55] Yeah. I think there are. I mean, I think you're, you know, this is part of the problem is that those fees have gotten huge in part because, you know, it's been easy to push those costs onto the developer, which means the buyer ultimately, right?

[00:50:11] Because money has been so cheap for so long. And so you're like, oh, yeah, I can carry that. No problem. I can carry that. I mean, it's just not sustainable.

[00:50:20] Yeah. As soon as developers and households are beginning to self impose sort of austerity measures to try and protect the pocketbook, all these costs start to really become considered.

[00:50:31] And now this is where you kind of grind to a halt where you've got record low pre construction sales like we're 75% below the 10 year average.

[00:50:39] And that that could create a problem five three, four, five, six years from now when all of those hasn't they're supposed to be built all the houses that would be pre sold today.

[00:50:46] Right. I mean, here's the real challenge. This is why I'm critical of government all levels on this on that on average, 33% of every housing unit built in this country, 33%, 33% is government charges and fees.

[00:51:02] Yeah. And so, you know, the developer makes, I think the average is about 15% on a house. They generally make a lot more on the extras, you know, the design features, the extra things they do with the base unit, they make about 15%.

[00:51:14] That's the next biggest chunk. So the group that makes the most money on housing is government. And so, you know, this is one of those areas you really want to reduce the cost. This is one of the ways you can do it.

[00:51:27] What can be done in that regard from your perspective? Like I would agree as soon as if we're relying on the private sector to solve this problem or do most of the work then making it a lot of people say, oh, developers are just going to pocket the difference.

[00:51:38] It's like, no, they're not because they realize that if they made a house cheaper, they would sell 10 times more houses. And so, you know, I think that cost savings could go a long way. What actually could be done?

[00:51:50] Because I know that like, I think Cancia did that report with the Rescon about the fees that you're describing and it's like, a lot of it comes from income tax, a lot of it comes from HST.

[00:52:02] So there's provincial, federal and then the municipal piece. Like is there a meaningful stroke of the pen that could really, really move the needle on that, on increasing the margins?

[00:52:14] Yeah, I think so. I mean, you look at the local development charge fees. I mean, they've just gotten out of control. I mean, they've got huge...

[00:52:22] A lot of that money just goes into development charge reserves, which is designed to pay for growth-related infrastructure. But again, your point is well made about HST.

[00:52:34] So the government has announced back in the fall and the Conservatives voted in favor of it. But the waiving of HST or the GST portion at least, the provinces had to come on board.

[00:52:42] In Ontario, they did. They came on board and waived the HST on the construction of purpose bill rentals. And that... The waiving of that fee used to exist as well on sort of first-time home buyers' homes.

[00:52:56] And when that was created, the upset limit of that was about $400 something thousand dollars. Well, back then you could... That was a very nice first-time home.

[00:53:05] Today, you couldn't buy a dump for that in Ontario. In some cases, you can't buy a piece of land for that. It's insane. And yet the HST applies on all of it.

[00:53:14] So we charge... The Liberals talk about housing being a human right and yet we charge tax on it like we sort of the same rights we charge on cigarettes and alcohol.

[00:53:24] So if it's a human right, if it's an absolute necessity, then we charge too much tax. And so we need to look very seriously at all levels of government, the taxes they charge, but also the processes that add to the cost as well.

[00:53:41] Fair enough. All excellent points. When you're trying to evaluate the success of this, like you mentioned execution and I would say...

[00:53:49] I would agree with you like the current government doesn't have an exceptionally good track record when it comes to that. And I think polls reflect...

[00:53:57] And I mentioned this in my conversation with Minister Frazier, that I think polls reflect that most people don't really have an exceptional degree of faith in their ability to execute it.

[00:54:06] With that being said, probably one of the only ways they're going to have a shot in this next election based on said polls would be if they do a ton of execution on this file.

[00:54:13] And so if they were going to do that, what would the data points that you would use as a critic of what they're doing? What data points would you be using to measure whether or not they're actually making progress or achieving success and results in accordance to the plan they put out on Friday?

[00:54:31] Well, I mean, obviously the most obvious data point is the number of starts and completions. How many homes are getting started and how many are getting completed?

[00:54:40] That's the number one metric. And obviously that metric difference depending where you are, there's targets in various different areas. That's key.

[00:54:49] The other thing, frankly, is whether they actually get these measures that they've announced adopted. There's all kinds of examples of other programs. There's a disability benefit that they were all gone home to get going and they passed this legislation because everyone supported was unanimous.

[00:55:06] And they were going to get it done and that they were going to do the details through regulation, not legislation, which meant that they had to go back to the drawing table.

[00:55:16] So the legislation empowering them to do this was done a year ago, over a year ago. And they said, oh yeah, we'll have everybody ready to roll out by December. It's still not done.

[00:55:24] And so this is, you know, this again is I don't doubt for one moment the intentions and the well meaning of this government. I just thought the execution is always a failure. So I, you know, they don't follow through. They don't follow up.

[00:55:40] It's like the dog ate my homework. Sorry, it's not my fault. We'll get to it. I promise we're trying. I'm not holding my breath on all of these things that they've announced getting actually executed and enacted.

[00:55:54] Not 100% sure that Canadians are going to take the bait anymore, either. But they're talking the right talk. But it's funny too. You know, they're talking tough with municipalities and provinces.

[00:56:07] Pierre Polly Ebb was talking tough with cities and provinces two years ago and they said he was being mean.

[00:56:14] It was funny. I did see like there were definitely a couple of things that seemed pretty evident, evidently pulled from inspiration on your side of the aisle there, which I guess, you know, it should the polls be correct would probably be end up doing you guys some favors in a couple of years.

[00:56:33] I guess the next piece is thinking about the qualitative factors like we're looking at Canada that feels young people very feeling very disenfranchised like 76% of Canadians feel that they may never young Canadians feel they may never own a home.

[00:56:49] How do you measure what would you pay attention to when looking at qualitative factors? I imagine a lot of your work like you're saying, you know, talking to municipalities and stuff like that you're out in the field interacting with Canadians to get an understanding for what whether or not.

[00:57:03] Anything is actually working. How do we how do we measure whether or not the housing crisis actually feels better or worse for Canadians? Like, is this something I sometimes I feel like we have a pretty good barometer on it because we're on social media all the time.

[00:57:17] Like if you go into any of my comment threads about a piece of housing news and it's like you could get a pretty good idea for where people are at but it feels like people are optimistic about this plan.

[00:57:26] How do we measure whether or not they're actually satisfied with the results?

[00:57:30] Well, I mean, as part of the channels, the results are going to take a lot of years to get right. There is no silver bullet solution to this crisis and it's been frankly, it's been at the genesis of the situation where today is like 1972.

[00:57:43] And so, you know, part of I guess part of what you do. I'm a small town mayor. I mean, I was the mayor of Huntsville for a number of years and I kind of grew up just talking to people on the main street.

[00:57:54] It's a little tougher as a federal politician to talk to everybody in the main street but I still do that as much as I possibly can. Honestly, conversations like this to do are really important.

[00:58:05] You know, one of the reasons I minister wanted to come and talk to you is because you have a lot of reach and you talk to a lot of people and it's a great medium to communicate with people and to hear back from them.

[00:58:18] So, this kind of conversation is important. Social media is still very important and more important all the time I guess in terms of hearing from people.

[00:58:27] I engage regularly too with activist groups like More Homes Toronto is a great example. More Homes Halifax, there's these groups all over the country really.

[00:58:38] And so, you know, it's about instilling some hope but also delivering some results and some immediate results short term long term.

[00:58:50] And so, you know, keep engaging and keep having the conversations and keep being open to having conversations with people where they're at and delivering results that they need.

[00:59:02] Absolutely. What role do you want to touch on what policies you would do, what your plan would look like as well because I know you had introduced something on your side sometime September of last year I believe.

[00:59:14] But before that the kind of question that I have because you mentioned our audience or reach those conversations is what role you would see members of our audience, members of the real estate profession, real estate investors playing in solving the housing crisis.

[00:59:28] I feel like investors really get demonized a lot and I think that there was almost this, you know, class war forming between like the landlord tenant discussion that we saw.

[00:59:39] And it seems like they've tried to walk back from that a little bit. But what role does small mom and pop investors, you know, not large corporates but because I think their role is pretty clear.

[00:59:51] But regular Canadians who are interested in making money but also solving a problem and having some social creating some social benefit. What role do we play in helping to solve Canada's housing crisis over the next decade and beyond?

[01:00:05] I think it's important to acknowledge that, you know, the vast majority of landlords in this country are the mom and pops, right? That people have bought an extra place or an extra apartment.

[01:00:14] And we should be thankful to them. I mean, I was talking about how the genesis of this situation was really 1972-73 when the Trudeau government then made major changes to the tax system that stopped the incentivization of building rental units.

[01:00:30] And so the construction of rental units pretty much stopped.

[01:00:34] And so like in the GTA, the condo thing kind of really took off then because it was a way for the construction industry to keep building residential but get their return on their investment.

[01:00:47] And a lot of folks bought units as investments. And so they've turned them into rentals. So that it certainly wasn't nearly enough rentals being constructed, but it was they became rentals and filled some of the gap that was left after that, you know, change in policy was made, the change in tax incentives was made.

[01:01:08] And so, you know, I hear the left, particularly in the house, they had to demonize people that own a rental unit. And I'm really thankful that people chose to do that.

[01:01:21] So I don't demonize people that have a rental. I'm grateful that they have it.

[01:01:25] I would say that among the announcements that were made the other day by the federal government, they talked about rental renters protections and these kinds of things.

[01:01:33] There's a kind of vanity projects. You know, Landlord Tenant Board like here in Ontario, for example, the system is bogged down. The rules themselves are actually not that bad.

[01:01:47] The process works well. They just need, you know, three or four times more adjudicators so you can get hearings much faster.

[01:01:54] So, you know, I think that, you know, the folks that are invested in this space are important to it.

[01:02:02] I don't think that they should feel like, you know, they've done something wrong. I think it's great.

[01:02:09] And the real estate industry in general, another one that likes to get demonized full disclosure, I still have my real estate license.

[01:02:15] Like, sold real estate for many years. You know, they're an important part of this process, not just to help people find a home that they need or that is appropriate for their family,

[01:02:27] but also to make sure that the seller gets the best price that they can for it.

[01:02:32] That's a big part of making sure that our homes aren't devalued, that they are an important part of a supply and demand marketplace.

[01:02:40] And so, you know, we need more supply. The demand is great. We need more supply. That's what it comes down to.

[01:02:48] And having a healthy marketplace in that supply and demand is really important.

[01:02:54] So I think all the players in the real estate market are an important part of the process.

[01:03:01] Yeah, I think when you talk about the role of real estate professionals as well, like realtors really are the biggest conduit of information between policy and the consumers.

[01:03:10] Like, if you're going to buy a property, it would be their job to do a lot of the preliminary research to tell you what you can do with that.

[01:03:18] And when now when we're starting to unlock, OK, I can put more units on this property or whatever it might be, they're going to play a big role,

[01:03:26] almost as like a sales channel to make sure that people are aware of what they can do and that they're going to start doing it.

[01:03:31] Yeah, and data. Like honestly, like the amount of data that we, you know, I'm often researching, you know, sales data and volume data and all that kind of stuff,

[01:03:42] you know, the Canadian real estate station is still, you know, provides policymakers at Ottawa and then the provincial organizations provide provincial governments with lots of data on,

[01:03:51] you know, sales and, you know, change in activity. And it's all very important to, you know, understanding the right policy moves to make to make sure that we have a healthy market and people have places to live.

[01:04:07] So they're an important part of the mix.

[01:04:09] Yeah, I'm a big fan of that world. I actually I've mentioned this on the show a couple of times, but the deal is finally actually done.

[01:04:15] So the Toronto real estate board licensed a data science platform that I built with a couple of folks recently and that'll be rolling out on the Toronto real estate board.

[01:04:24] So I'll have to get you access to that so you guys can use it to make some policy decisions.

[01:04:29] No, that'd be great. Thank you.

[01:04:31] Yeah, no problem. I guess the final question and I want to be mindful of your time here but, you know, if there was there's anything that you would be doing differently or that you would do what should people expect?

[01:04:41] You know, should you win in 2025? What would your housing policy look like? What kind of things would you be liking to propose?

[01:04:48] Yeah, I think I think Pierre Pauliev has been very clear on this issue. This is where the people like to say sounds kind of mean but I don't think he's being serious.

[01:04:59] And his point is that, you know, he would he would hold, he calls him gatekeepers and other people that delay the approval of new homes.

[01:05:07] He talks a lot about increasing the density of residential development around, you know, expensive urban transit and high density, you know, type of transit like subways and the SkyTrain is that kind of stuff.

[01:05:20] And so he talks about actually holding up infrastructure contributions from the federal level of government to municipalities based on whether they get the job done or not.

[01:05:31] You know, instead of cutting a check saying, you know, oh, you know, we'll approve new density here once it's built. He's not going to do that.

[01:05:43] I mean, what we say is instead of paying for promises, we're going to reward results.

[01:05:49] And we think that that is probably the most effective way to ensure that more units get built and then there's less delay in the process.

[01:05:59] And that's a kind of program that you can roll out across the country without a federal government being too prescriptive on, you know, what the best solutions, you know, what the best, you know, buffaist solutions are for your municipality.

[01:06:17] You know, there's a lot of talk right now about, you know, foreplexes as of right and being able to put four units on any residential lot.

[01:06:24] And, you know, that's a great idea. It's a great idea. And frankly, the fear mongers about it, you know, I don't get it, but I do and I don't, I guess it's a tempest and a teapot.

[01:06:36] But it is not a silver bullet solution either.

[01:06:39] And so what Pierre has always said, you know, he's not trying to prescribe to municipalities how they get the job done just that they had better or they won't get a nickel of federal money to help with infrastructure projects, whether it's a subway or, you know, replacing and upgrading it.

[01:06:54] I think what you would see from a pure poly out of prime minister is every nickel of federal infrastructure dollars would be viewed through a lens of housing.

[01:07:04] You want money for that project? How many more units of housing are going to get built as a result? Otherwise, we're not interested.

[01:07:10] Awesome. You mentioned, you know, having discussions with people in the industry and hearing feedback.

[01:07:17] And this is why politicians likely would have interest in, you know, engaging with our platform.

[01:07:21] If people want to have those discussions with you or your office, how might they do that?

[01:07:29] I'm not, they go about doing that, you know, mentioning things that they feel are overlooked or policies that might have an impact.

[01:07:36] Is there a way that people can connect with you to have those discussions?

[01:07:41] Absolutely. I mean, we get a lot of communication via the email on my social media channels also as well.

[01:07:47] And so I would encourage anybody if they have ideas they want to share with us, please send me an email.

[01:07:54] My email address is, well, I'm going to have to spell this out for people.

[01:07:58] Yeah, I can just put it in the show notes.

[01:08:00] You can just put it in the show, but my email address is what it is.

[01:08:03] You want to put my social media channels in that mix as well.

[01:08:06] And then of course, you know, I mean, there's no reason why, you know, you and I don't chat periodically.

[01:08:14] So, you know, when I, you know, I always want to be available to hear ideas.

[01:08:20] It's one of the reasons why I travel across the country talking to people and do housing roundtables.

[01:08:25] I hear common themes everywhere, but I always get a new idea no matter where I go.

[01:08:29] And it's always interesting, but there are lots of ways to share your ideas with me.

[01:08:33] And if you can share them in the show, that'd be great.

[01:08:35] Amazing. Yeah, I really appreciate your time and all your thoughts on this.

[01:08:40] We're hoping to get this episode out on Tuesday before the budget.

[01:08:44] So we'll send it over to you then.

[01:08:47] Great. Thank you for your time.

[01:08:49] This is Daniel. Thank you for what you do.

[01:08:51] I think it's great stuff.

[01:08:53] My pleasure.

[01:08:55] Okay, thanks.

[01:09:03] Daniel Foch is a real estate broker licensed with Rare Real Estate, a member of the Canadian Real Estate Association, the Toronto Real Estate Board and the Ontario Real Estate Association.