How We Solve Canada's Housing Crisis

[00:00:00] Welcome to the Canadian real estate investor where host Daniel Foch and Nick Hill navigate the market and provide the tools and insights to build your real estate portfolio.

[00:00:13] Hey everyone, it's Nick here and I just wanted to take a quick second before we get into today's episode to remind everybody that we are launching a five day challenge in March.

[00:01:24] on yourself Gregor for those who are listening who may not know who you are.

[00:01:30] Yeah, thanks for having me guys. It's good to be with you. I am in a nutshell. I'm a

[00:01:37] generalist, a journalist. I worked and have worked for the last 20 years or so for CBC radio in Victoria, BC, one of the most expensive housing markets in the country. And before that, I lived

[00:01:42] in Vancouver. I bought my first house 20 years ago. covering everything around the world, all sorts of news, I was looking as a personal thing at the internet and watching property prices in Vancouver go up and up and up and up and thinking, wait a minute, am I about to get priced out here? So by the time we finally bought in 2004,

[00:03:01] as I say, we thought we had reached the peak of in January, I guess it was 2022, I ripped open my BC assessment of this old house you see behind me, this ramstack, a little 110 year old house. And I saw the assessment at $1.3 million and it's now $1.5 million. And I felt rich for about a moment.

[00:04:20] And then I realized, if you'll pardon the expression, guys,

[00:04:24] my kids are screwed.

[00:04:26] How are they gonna afford a house in the future? crazy and that you didn't, why didn't you know you weren't getting a good deal? And I said, because when I moved to Vancouver as a student, like eight years before that, I could have bought that house for, I don't know, 130,000. Like it had more than doubled in my fairly short memory as a 30 year old. And that's why I thought, you know, I was 30 years old buying my first house and I thought, I got a bad feeling about this, but we did it.

[00:05:41] And the only thing that convinced us in the end was the cheapest house in the city of

[00:05:43] Vancouver.

[00:05:44] In the end, we bought it and we thought, well, at know at the time that we ever made. Yeah. One of the things that you didn't mention is also your book, Why Humans Build Up, which I love and I have taken my daughter through it. We flip through all the images of all the skyscrapers and stuff. So that one's a good shout out for our audience, I think, who's into the built form environment and all that stuff.

[00:07:01] I appreciate you mentioning that. That was from my kids. But yeah, it feels like that, especially Vancouver and Toronto. I mean, I compare it in the book. One comparison I did is I talked to a nurse to the GTA who moved from Calgary and I think she moved in 2001. And she had owned a home in Calgary. This is an essential worker in society. We need our ER and OR nurses and

[00:08:21] all nurses in hospital place they were.

[00:09:40] Yeah. It's so, it's so unfortunate because we've, we've started to see that already

[00:09:43] with the tech space and brain drain.

[00:10:45] time before we kind of again, get too carried away here to maybe get a little bit of a quick synopsis of Cole's notes, if you will, as to the book. Again, we don't want to give too much away

[00:10:50] because we expect everyone listening to go and read a copy of it. But maybe give us some high

[00:10:57] level points from the book, like talk about maybe don't cover it anymore and then they get evicted from their longtime rental and they've got nowhere else to go. But the point is, so the first third

[00:12:23] of the book interspersed is the human pot is to try to focus on the human cost. The second third is, how did we get here? How did, for instance, between 2001 and 2021, the price of an average house across the country go up 365%, while the cost of everything else went up 43%. That's statistic. And by the way, it's we do? And the short answer is we have to do a lot. And it's going to take years, truthfully probably decades to really solve this. But we need, we're starting to act now, but we really need to get going. So I foresee many years of your podcasts ahead, Frank. Yeah, fair enough. So I guess then maybe I'll start off with a quick

[00:15:02] question and then I have another one as a follow up to talk about the fact that Canada has added more than a million people last year, maybe similarly this year, even though they're not all permanent immigrants, that's a big factor. And so I would say we are one of the developing countries struggling with

[00:16:24] high housing costs. If we're not at the's a builder or working on a crew out there. We know you're going gangbusters. We see you working all over the place. Our annual construction starts, if you look at them compared to a decade ago, are up.

[00:17:43] I know it's eased off in some't before, a year or two ago.

[00:19:00] And I know that's only a small example,

[00:19:02] but there's a lot of room for, as you say,

[00:19:04] maybe benevolent investors to do some good in the intro. or major markets across the country? It's a really good question. I've wrestled with that a lot, Nick. And to be honest, I don't know, because I've wondered about that. I could see it, and this story, this isn't a great answer, but I could really see it going either way in this country, because we have so much land. And if all levels of government treat this seriously, we may still remain a country of majority owners.

[00:20:23] But I do think, and you definitely

[00:20:24] see that in younger demographics, Canada's population stabilizes at some point, there's a rate of growth stabilizes actually, say, and construction catches up at some point. Maybe it's just, that's a hard one to answer. I mean, so many, I think, so many Canadians still want to own that I wonder if the ownership might catch up at some point in the decade or so. Yeah, it's so funny because to your point

[00:21:42] on looking at European countries, right,

[00:21:44] and we've actually, we've had Europeans reach out to us

[00:21:47] and say, I don no one gets the Canadian dream for the next 10 years. And 10 to 20 years from now, that's back. And we've got more homes and everything's kind of settled down a little bit. But we're in a very tight spot right

[00:23:01] now because it's hard to look at a road. It they would like to buy just for peace of mind, like literally for housing security. They know it's so hard to find a place to live. So that's what I would say to people who are in different rental markets or different countries who say, why are you guys so obsessed with owning anyway? Well, in a lot of cases, literally,

[00:24:20] people wanna have peace of mind

[00:24:21] when they put their head on the pillow at night,

[00:24:23] just to have their own home.

[00:24:24] It's not even about an investment.

[00:24:26] It's just because so they're not having, From an economic perspective, maybe the best way that I think about it is like Adam Smith had this concept in the Wealth of Nations, which was the specialization and division of labor. I think that as you have the next generation of home users, let's call it coming up, a lot of them don't want to own homes and maybe they've capitulated on ownership. How do we deliver

[00:25:40] them secure tenure of rentership? Do you think that we're heading in the right direction with

[00:25:46] a lot of this purpose-built public rental housing also serves a purpose.

[00:27:01] But in general to your question, Dan, yeah which I think they've rebranded now and now opened up to universities to build student housing. I wasn't around during that period of time. Do you think that we're going to get a similar suite of incentives and a comparable level of incentives for people to made specific commitments to build affordable housing, you know, below market rate housing. Why didn't they offer them favorable interest rates? So there's been a lot of questioning why hasn't there been more favorable policy financing

[00:29:40] that kind of thing.

[00:29:41] And I know there have been a few recent announcements.

[00:29:43] Here's hoping they encourage more construction. rent, and you know, just, just as an aside that the next episode of recording is about rent, renting versus owning. And there's, you know, all these ridiculous stories coming out about, you know, the guy in Calgary who takes to flight to UBC or, you know, the, the boomers that are retiring on cruise ships, cause they can't afford to live in Canada anymore or people living in hotels because they can't afford to

[00:31:02] live in Toronto or Vancouver anymore. us row housing and realizing, wait a minute, there's nothing wrong with this and it's way more efficient use of land. There's a lot to be said for, do I need security versus opportunity? Maybe your first priority is security. The absolute thing I need more than anything, maybe more than being in absolutely the right

[00:32:22] location, neighborhood or city for professional opportunities is I just need to have a secure

[00:32:28] place to live. really, really feel for you. I know it's not everybody, but so many people are struggling and this is the struggle they're facing that I wanna be careful about giving outdated advice. So sorry to kind of dodge that question. But my short answer is in a lot of cases, I just don't know, I don't know what young people are doing. Yeah, yeah, no, not at all.

[00:33:40] And I didn't mean to put you on the spot there.

[00:33:42] It's something that Dan and I have been trying to answer

[00:33:44] for 170 episodes at this point. I think you're right. It's going to come down to changing expectations and having a bit more of a world view on something like that, right? Where you said, hey, I lived in London. It was fine. You know, I didn't think about housing every two seconds. And, you know, doing research for that other episode that I mentioned, where people are living in some ways, Victoria was the head of other places in that they had to be repurposed into apartments and separate flats or condos decades ago. And a lot of them are super nice, but I agree, Nick. I mean, in Canada, basically for decades anyway, especially for those of us who are, let's say older than 40, I mean, we've had it good

[00:36:21] compared to most countries around the world.

[00:36:22] I mean, you could say even a bit too good.

[00:36:25] Like we've had so much space That's taking it too far. But at the same point in time, a lot of us would benefit from saying, well, you know, I don't have to have a giant,

[00:37:41] sprawling single family home like my parents.

[00:37:43] Yeah, not everyone needs the 3,500 square foot, you know.

[00:37:47] And Dan and I, you know, you're just moving the problem around, right? If it's not construction, it's permitting, we've fixed the permitting now, there's not enough labor to get the jobs done. So as you know, and everybody listening, this is all in the book, so make sure you go check that out. I know we're getting the time here. I'm sure Dan's got a final question. I've got one kind of unrelated question. Who's the coolest person you ever interviewed,

[00:39:04] outside of this interview, obviously?

[00:40:05] opening ad. Very cool. Just me talking to him for an hour. And he could not have been friendlier and more welcoming and more engaging ahead of time. And he was just the friendliest guy, super smart,

[00:40:10] of course. And we had a great conversation. And then to see, was it last summer or the summer

[00:40:15] before that he was attacked on stage in upstate New York? It was just so upsetting. But I gather

[00:40:22] he's recovering and I sure hope, wished him all the best of support independent bookstores, but I mean honestly I understand you can also get it at the library as well But whether it's an indigo of course does a great job supporting a lot of Canadian authors So I'd say wherever it's convenient and thanks for the plug fair enough. Yeah. Yeah, and Gregor, where can people find out more about you?

[00:41:41] Here is audio might have cut the he's just saying where where can people find out more if they want to interact with you like