The Missing Middle Podcast
Welcome to the Missing Middle, a podcast about why the middle class in Canada is disappearing. We hope to help you understand why life is becoming unaffordable for so many in this country, and what can be done to reverse course.
The Missing Middle Podcast
Toronto’s Housing Crisis Explained with Ron Butler | Live Event
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Toronto’s housing crisis is no longer just about buying a home, it’s reshaping who can afford to build a future in the city at all. In this special live taping of The Missing Middle Podcast, Sabrina Maddeaux, Mike Moffatt, Cara Stern, and special guest Ron Butler unpack why young families are leaving Toronto, how policy failures created a city of “dog crate” condos and unaffordable homes, and what needs to change before affordability gets even worse.
Topics covered include:
• Why young families are leaving Toronto and the GTA
• The rise of tiny “dog crate” condos
• Why missing middle housing is so difficult to build
• Zoning delays, development charges, and housing red tape
• The future of rentals, condos, and home prices
• The Greenbelt debate and urban sprawl
• Whether Toronto can still work for middle-class families
• Why more young Canadians are leaving Ontario and Canada
• Non-market housing, affordability, and the politics shaping the city’s future
Subscribe for more conversations on housing, affordability, and the future of Canada’s middle class.
Chapters:
0:00 – Live From Toronto: The Housing Crisis Debate Begins
1:42 – Why Young Families Are Leaving Toronto
5:08 – The Reality of Buying a Home in the GTA
8:11 – Why Toronto Only Builds Mansions or Tiny Condos
11:24 – Are “Dog Crate” Condos Doomed?
14:37 – Missing Middle Housing & Zoning Failures
18:02 – The Greenbelt, Sprawl, and Housing Politics
21:10 – Renting for Life in Toronto
24:02 – Should Young Buyers Wait to Purchase?
26:12 – Non-Market Housing vs Market Housing
29:04 – Predictions for Toronto’s Housing Future
Research:
‘It’s not like we’re sitting on our hands.’ Toronto’s biggest landlord sees 7 more complexes fall into critical disrepair
Drug deals in doorways and a stranger in the living room: Why Toronto Community Housing residents say its $38M security force is failing them
Hosted by Mike Moffatt & Cara Stern & Sabrina Maddeaux
Produced by Meredith Martin
Funded by the Neptis Foundation https://neptis.org/
Well, good evening, everyone, and thank you so much for joining us for the first ever live taping of the Missing Middle podcast. Woo! Thank you. We're so excited to have you here tonight at the National Club. I'm Sabrina Maddo, your moderator for the evening. And if you don't know The Missing Middle, we talk about the economic pressure shaping life for middle class and especially young Canadians. Housing, affordability, fiscal policy, what governments are getting right, more often what governments are getting wrong, and we never pull any punches. Toronto is in an election year, which means the people in this room have a rare chance to shape the future of the city. And the stakes are real. If housing stays unaffordable, if the middle class keeps getting pushed out, we're not just talking about a tough market. We're talking about a fundamentally different future for the city and the people who call it home. And so that's what we're here to talk about and figure out tonight. And we'll be opening up to all of you at the end. So start thinking about your questions. But first, I'll introduce our panel. We have Mike Moffat next to me, the founding director of The Missing Middle, my podcast co-host and one of Canada's leading housing economists. Kara Stern is also a Missing Middle co-host and has been one of the sharpest voices on what housing policy is doing to families, young families in particular. And Ron Butler, we cannot forget him. You'll know him very well by the end of the night. He's a 30-year veteran of the mortgage industry and the host of the Angry Mortgage Channel on YouTube, someone who tells Canadians the very, very blunt truth about what this market actually looks like from the inside. And with that, let's dive right in. Kara, I'm going to start with you. You're a young parent in the city, so you have a front row seat to something that a lot of policymakers or even older Torontonians seem to be missing. There's this assumption that families will just move to the suburbs or go as far as they need to to find affordability, and that's fine. They leave, everyone's happy, no problem. But is it actually fine? And why does it matter if Toronto has kids or young families in it? What do we lose if they all leave?
SPEAKER_06Well, I think we lose a lot of the vibrancy of the city. If it ends up being, I keep thinking, if you families can't afford to live anywhere near here, it'll be what? Like a lot of retirees, a lot of professionals, and no families there, it'd be very sad. But I also think about like who are the parents? Like what age range are they? They are the kind of like the prime of their career. We need people in that age range able to work in the city, and especially like at least in commuting distance from the city, if not in the city itself. And it's a really tough thing. If you lose families, which we are losing a lot of them, you obviously have parents grandparents who don't get to see their grandkids a lot. So that's pretty sad. And also, it's really hard to reverse that trend because people leave the city, schools close. We've seen that we're seeing that happening now where there's fewer kids entering kindergarten this year. So there are fewer classes. And so schools will eventually shut down in areas where there aren't families. And it's so you can't really get that infrastructure back and have it reopen at any point because it's like it becomes much, much more difficult.
SPEAKER_05Maybe Mike, you could put some perspective on how far gone exactly is Toronto when it comes to losing young families and especially young parents.
SPEAKER_07Uh well, I have one of my uh colleagues at the globe here, so I don't want to tell you say too much because I've got a piece coming out in about a week uh on this. Uh but yeah, we are uh families are are leaving uh the GTA and and not just the city of Toronto, you know, the the GTA uh built large. You know, the latest numbers uh that we have is about 90,000 more people are leaving the GTA to other parts of Canada than are than are coming back. And it's disproportionately two groups. Like there are some folks that sell their place in in Cabbage Town and move to Kawartha Lakes or what have you. That that does exist. Uh, but it is largely uh people between the ages of say 25 and 44 and kids under the age of five. Now, this is no longer, this is my favorite set, it's no longer technically true, but it was a few years ago. Uh that the most common age to leave the city of Toronto zero, it's kids under uh kids under age one. And you can kind of understand why that uh they you know they they live in an apartment, they live in a condo, uh, you know, small unit, and baby comes along and they're like, this ain't gonna work. And they draw, you know, drive until they qualify until uh they they can find a place they can afford. You know, at some level that's always happened, but it used to be that they would drive to Etobicoke or you know, North Erica or whatever, and now you know they're driving to Tilsonburg and Woodstock and Belleville and so on.
SPEAKER_06They're flying till they qualify.
SPEAKER_07Yeah, they're they're flying till they qualify. Yes. Exactly right. So it is a real problem for exactly the reasons that that Carol discussed. And it's hard to come back. Like once a neighborhood loses that school, it's even harder to attract those families.
SPEAKER_05Now, Ron, are you seeing this day-to-day on the ground in your work?
SPEAKER_08We see it every single day. Um did a little informal survey in uh our mortgage clientele for purchases. This is mainly first-time home buyers and pre-approvals. 90%. The average income, family income was $215,000 a year. Which is surprisingly a lot of money. But it there was effectively nothing under 200, which tells you, and by the way, you want to know the bad news? The average family income in Ontario is 124. So that's really bad news if you are in that category and you ever want to own a home or you didn't get there already. We already know that the average age of first-time homebuyers has gone to 40. Now, 40 is wildly crazy, right? Because you just you can drop back into the 1980s, it was 27 years old. Um, that is an unbelievably big change. And apropos of families, the discussion of families, fertility rate in Canada has gone, just broken through another level, has gone down to 1.2. So that means you're so far away from the replacement rate, it's not even worth talking about. But there are some odd exceptions. So we've done a we started to do a little work on figuring a place where there is an exception to this family formation problem. One of the strange outcomes was Bruce Power saves the world. Uh it is so wild. Um, because the incomes are so high for the Bruce nuclear reactor program, which is growing and growing uh in Ontario, and that the prices of the homes have only just gotten up to an average of half a million dollars. And prior to that, if we go back to you know pre-COVID, they were much, much less. They're in like in the $200 and somewhat thousand dollar range. And because incomes are so high and the price of homes was very reasonable for a long time, there's actually family formation within the radiation zone of the nuclear reactor. So uh, which is that might be another story for another day, but uh this is a fascinating thing. If you go back to the seven late 70s and 80s, family formation was very normal. People got married in their early 20s, had kids, and that was when you could go directly from high school to a factory job that paid you a living wage, a quite an adequate wage. So, one of the things that we we have to think about more of other than unaffordable housing, housing that's way too expensive, we've got to start thinking about how people's incomes are nowhere near, average people's incomes are nowhere near where they need to be to be able to form a family and buy a home and pursue the same thing that I'm guessing most of the people in the room have been able to achieve.
SPEAKER_05Now I want to jump off of that because Mike, one of the problems and complaints is that there aren't suitable homes for families these days. Everything is either too large and unaffordable or too small to have the quality of life most people are expecting or wanting when they have kids. So why is everything either a McMansion or a shoebox right now?
SPEAKER_07Dog crate. Gotta be a dog crate dog crate.
unknownYeah.
SPEAKER_07So so it's just the the the economics of uh you know how we do taxes and land uh in in this province that um, you know, we haven't really kind of allowed other forms of home, you know, literal missing middle because of uh zoning and building code code issues that uh I'm sure Kara will go into. Um we haven't allowed for a lot of development land or use of new development land because of urban growth boundaries, and um we can get into greenbelt type issues. So if you're not allowing a lot of land, that land is going to be very expensive, and nobody's going to build an $80,000 structure on a million dollar piece of land. And even if you did that, that home would still cost about $1.1 million, right? So that only kind of leaves you with high-rise. And you know, the high-rise has has many, many usage, but just the the the expense and challenge of building high-rise and you know, building code issues and things like that is very hard to economically build larger units. So it's just this combination of land use policy, taxes, and so on, uh, particularly in GTA in southern Ontario, that you know has created this dichotomy where you know you've got very, very small homes and very, very large homes and not a lot in between.
SPEAKER_05So, Ron, being on the ground every day, where do you see the future going? You have that ground level view that the rest of us don't always have. So, five years from now in the GTA condos, purpose-built rentals, single family. What's your honest read on what happens with each?
SPEAKER_08Prediction is a crappy business. It's really bad.
SPEAKER_05Humorous.
SPEAKER_08Uh, but here's something I feel a lot of conviction about. Uh the dog crate condos will be doomed for a long time. I mean, that's I I'll give you a great quote. Um, a group of people, a group out of Montreal has come to Toronto to buy wholesale numbers of condos. It's called the Jesta group. And they're here, they've got a half a billion dollars to buy unused, unsold dog crate condos in Toronto. Great quote out of the person who's managing this effort, and he said, Well, the only thing we won't buy is condos that are laid out like a bowling alley with a glass uh glass wall for the bedroom. And the great quote was he says, These things are unlivable. All right, like think about that for a minute. They're unlivable, they are so bad, they're unlivable both for the owner occupant and for the renter. So he's talking about something that is so awful, the layout's so awful, finishes so bad, a concept so horrendous that no one, even renters, won't live in them. So if you think about that for a minute, there's so many of this awful product, and what are the chances of those prices recalibrating upwards again? Because right now they're 50% off retail in most cases. Will they recalibrate upwards and will there be new development? People willing, developers willing to come up with developers are already asking for like a massive change from the banks to take uh to go from 70% sold down to 40% sold. I know of no bank who will agree with this. Okay, this isn't is not gonna happen. So the chances of of it springing back to life that there would be a bunch of new dog creek condos built in uh in the GTA is slim and none. So that's the only thing I can say for sure, Sabrina, is that I think the thing the situation with tiny condos will be just as bad three, four, five years from now as it is today.
SPEAKER_05Kara, I want to dive into the policy side of this because what we hear from policymakers is always one thing. They love families, they love affordable housing, but then it's the dog crates that get approved and the three-bedroom family homes that get the no. Um, what would you like to see from Toronto candidates and policymakers to make it genuinely easier for young people, families, children to live and stay in Toronto?
SPEAKER_06I think we've started seeing some changes in that we've seen some zoning changes happen, which is really important. So we've had like in all the city, you can do four plexus. We have sixplexes in old Toronto, some East York, and I think one place in Scarborough. And so, like, that's great, except that's on paper, you can do that. But can you actually build them? Does can you actually do it in a way where it like financially makes sense that you can actually fit that on the lot when there's all these other building code rules in there? So we need to see some changes where they where they uh make it actually feasible to build these homes, not just like the bare minimum of making them legal. I'm still thrilled because you know, when I started covering this, I could not have imagined sixplexes being allowed anywhere in Toronto as of right. So I think that there has been progress, but there need we need to make it, we need to make it that it's easier. You look at Edmonton, where they allowed eight-plexes, and most of the ones that were being built that are family sized, they are a plexus because that's how many you need to make the project make sense financially. And so they're not saying a lot of smaller units. We need to see more changes in Toronto to make it actually, actually easy to build these things, not just on paper legal.
SPEAKER_05Now, Mike, you've written a lot about what you call Petumpkin reforms, changes that look meaningful on paper, but don't actually move the needle in real life. So in a Toronto election year, what's the one thing you most wish every candidate actually understood about why our housing crisis keeps not getting solved?
SPEAKER_07Well, I I think we need as of right to actually be as of right that you know, have uh kind of you know lit list of uh criteria and once you do that, then then you're golden. And when we see this play, like like Edmonton uh has a system where you know, for subdivision permits and a number of permits, it's actually assessed by AI. And something that if you're lucky takes six weeks in the city of Toronto and Edmonton takes six minutes. Uh so you know there are uh solutions out there. So I think it's looking at that. Uh is is looking at you know this one I'll have to work with the province a little bit, but you know, one of the uh downs or one of the objections uh to uh multiplexes is that in Ontario they're gonna almost all be rental uh because it you know to to kind of parse them out and sell them as individual units, you get into condo regulations and the economies of scale doesn't work. It's the same amount of paperwork to do a 300-unit condo as an eight-unit condo. But this is a solvable problem. Like British Columbia and other uh jurisdictions, a lot in the United States, have a number of policies to make it easier to subdivide units. You know, there's a different method depending on the type of home, but it's really not that much different than doing a you know semi-detached, you know, duplex uh kind of thing. So I think it's looking at that, but it really does come down to you know, as of right should mean as of right.
SPEAKER_06Those delays are huge. And you think about how much it costs builders to like it adds to the cost of the home for every month that it's delayed. And a lot of these projects, they take a long time to get approved, even for fairly simple things. So we we really need to see some of that red tape go away.
SPEAKER_05Saron, Mike mentioned land costs in his answer. Do you think governments are willing to make those tough decisions necessary to either make it easier to build infill or to make more development land available? Uh, or did the greenbelt scandal make this a third rail that no one's gonna touch again?
SPEAKER_08Yeah, well, you we live in a province where the premier could do the most preposterous and outrageous and semi-corrupt things, and all he has to do is apologize two days later and take it back. I mean, that is a different kind of a political environment that I've been used to in my life. But a couple great points here. Uh the land prices are astronomical until we completely just just we just have to set aside this whole greenbelt insanity. I mean, we it's really a brown belt or a bush belt or a it's a rock belt or it's something. It's not a, you know, the idea that it's all farming land is preposterous. The whole every single organization that just goes to the barricades every time you talk about the Greenbelt, when you go back and in the lineage of the organization, it's just a bunch of nimbies who live there and don't want anything to change in all of those greenbelt areas. And it's ridiculous. I mean, it's absolutely ridiculous. There's no sense to it. It's it's there's no reason for it other than an idea that a couple of people in the Harris government dreamt up all those decades ago, and it's no longer appropriate. Oh, by the way, if you ever hear anybody refer to the Greenbelt as a critical watershed, you need to point at Lake Ontario. Okay, they there is there is never going to be any shortage of fresh water in this region. Like it is never going to happen. So there's been so much mythology built around the Greenbelt that's completely false that we it's so hard to tear it down. Kara made a great point about the insanity of building multiplexes in the city of Toronto. So a friend of mine tried to do it. He tried to do it uh just uh streets off the Danforth, he started started three projects, and in the end he said, we just gave up, we're never gonna build another one. There was a requirement to increase the water coming into the building. So we had to we had to put in a pipe for the water coming into the sixplex. And that required us to have the provincial arborist come and see how close the pipeline was gonna be to a tree. And that took seven weeks. We couldn't do anything for seven weeks. So at that point, we decided not even gonna talk about the guy who uh ran three different shade complaints on uh there you can do that, you can just keep going with the shade complaints forever, or the person that on the other side of the project that wanted a significant bribe to allow materials to come in too close to his property. Um I'm not making any of this stuff up. This is all the way it works. So, under those circumstances, how are you gonna build this stuff?
SPEAKER_05So, Mike, you're a guy who's involved in climate initiatives. You care about the climate. Is Ron right, or is he just an evil pro-development?
SPEAKER_07Well, those things don't have to be mutually exclusive. Uh but no, I do think we need to look at these. Uh in particular, there's green belts is one issue, but you know, I really think on the urban growth boundary thing, uh, you know, I think it's increasingly clear that they actually cause more sprawl than they prevent. Because what happens is you get something called the leapfrogging effect. Uh, you see this a lot in my hometown of London, Ontario, where you you get a council, they put in a really tight urban growth boundary, uh, and then people just move out to Lucan or Comoka. And I know most of you don't know where these places are. They they move out like 10 to 15 minutes like north or west of the city, and then they drive back to their jobs at university to hospital. So you haven't stopped sprawl, you've just moved it 15 minutes north and west. And oh, by the way, when you do that, all of those families they pay all their property taxes to Comoka and Lucan. They don't pay them to London. So now you've got all these people who are commuting in uh using London's infrastructure, but they're not paying a dime of local municipal municipal taxes. So yeah, I do think we need to look at these things. And, you know, the problem with a lot of these policies, and I say this as uh somebody, you know, at the Institute of the Environment who's done a lot of environmental work, that is is this actually having the intended outcome? And you know, God forbid we never ask, like, okay, is this actually making it worse than just doing nothing? And I think a lot of the cases that we would have we would have had less sprawl if we literally had done nothing than you know having these tight urban urban growth boundaries.
SPEAKER_06I think people need to realize that good housing policy is good climate policy. It's good, they can be done together. That that would really make a huge difference.
SPEAKER_05Kara, I'm curious because we've talked a lot about ownership. Um, but a lot of people are coming to terms with the idea that they might never own, they might be forever renters. Is renting for life, you know, a realistic and dignified path in Toronto, or does that only work if we fundamentally change how the city treats rentals and renters?
SPEAKER_06I think like it's a definitely a dignified path. I think that some people do want to rent and that if they want to, I think that is a totally great choice. I don't think that we need to be a place where like people have to own, but we do have like a lot of our there's financial incentives to own a home. You don't pay capital gains tax on that increase, and there's no equivalent for renters at all, right? And I think that when you look at the rental market, like there's very few family-sized rental units out there. There's like, it's almost impossible to find one in Toronto. And so you're gonna end up with, we are ending up with smaller families, and I can think that will continue to be the case because like you can't you can't do it. You can't make it work in these tiny, tiny condos. Um, it's if I don't want people to have to rent that they that's their only option. I I don't think that there's a problem. Like, I'm not one of these people who think, like, oh, you know what? If you corp like if corporations buy homes, they're those can become rentals, and those are often decent people to rent from because they know the rental laws on like a Lot of landlords out there. But at the same time, like, yeah, it it can't be that people are forced into this. It has to be that the choice is theirs.
SPEAKER_05So if a young person is in a position where they could put down a down payment and afford a home in Toronto right now, Ron, can you give us the honest answer? Would you recommend it?
SPEAKER_08Would I recommend buying a house in Toronto?
SPEAKER_05Right now. If you're a young person, you have a down payment. You can technically afford the mortgage payments. Is it a good idea?
SPEAKER_08If you can wait six months, you'll have lower prices in almost every region. Like not the the the thing the thing that we misunderstand about housing is not it's not like the stock market. It is it there's no such thing as uh a whole market that moves with momentum, um, which you can have like there's some dog companies that get pulled up by the success of other companies in the stock market. That's not true in real estate to this extent that if you have a sought-after neighborhood and a great street and a great home, you will get a great price out of it. And it there's where we hear the story, oh, the market's turned and everything's getting a lot better. Um, it's you better jump in and buy right now or you're doomed. Um, I can show you a lot of homes in Scarborough that have been sitting there for seven months. Okay. I mean, they're not not every single place is that unique sought-after property. So those sell, others don't. And if it's the wrong price, it doesn't sell at all. So will the price come down a bit more in the city of Toronto? I I could think yes. If we talk about the whole city and not just those ultra-specific neighborhoods which are close to the core, I think yes, I think prices will come down. And uh here's some one thing for sure. If you wait six months and save $50,000, you'd like to have that fifty thousand dollars, right?
SPEAKER_05I take it. So, Mike, Mayor Olivia Chow has made non-market housing a signature of her time as mayor, and anyone running against her in this election is going to have to take a position on that. Is she right to say that non-market has to be a bigger part of the answer, or is that approach getting in the way of solving the affordability crisis?
SPEAKER_07No, I I definitely think we need uh more uh non-market uh housing. Uh so you know, and then you know, we can debate where the money comes from, which order of government and so on. I think I think where it becomes problematic is when it's you know tied to a market uh you know building or proposal where you go, okay, yeah, you have to, you know, if you want to uh build this missing middle, you know, or or mid-rise uh apartment building, you know, X percent has to be deeply affordable, then the math breaks. Um so I would say just as long as we're not putting the two at at odds with each other, because ultimately, I would say that if we are building uh deeply affordable housing, we should pay for it as a society. We shouldn't just be giving the bill to a bunch of uh uh new young uh renters and owners, right? That it that I don't think it makes sense to have people who are already getting screwed by the market uh in two decades worth of bad policy say, okay, yeah, now you've got to pay for this subsidy for other groups.
SPEAKER_06Is that when they're paying for it through development charges through an inclusionary zoning, right? Those are the things where we were able to put the cost on other buyers.
SPEAKER_07Yes, don't put it on development charges. Yes, thank you for that.
SPEAKER_08You know, I I think there's a a huge need for social housing. I mean, it probably homelessness is the greatest curse of our society in in as we sit in these large cities today. Uh, but it it's it's it's important, I think, that the mayor and all the council and everybody else realize that their long-term social housing are make them famous as slum lords, that they have neglected to maintain these properties. There's a lesson there that if you if you're gonna build these things and take federal incentives, particularly to build social housing, you better have a realistic commitment to how you're gonna look after it for the the multiple decades and not end up being even more famous as the biggest slumlord in Toronto as is the city of Toronto.
SPEAKER_05I'm gonna do a couple rapid fire rounds before we go to audience questions. Let's start with Ron. If you could tell the next mayor of Toronto, whoever that might be, one thing about housing, what would it be?
SPEAKER_08First, wear fewer costumes. Um and and after that, uh understand that development fees only do harm. They give the government a completely wrong idea of where money should be, where and how money should be spent. Because ultimately, if there was no taxation on the new construction of housing, a lot of people say, oh no, no, if you do that, the developers will just run wild and they'll take all the money and they'll take all the profits and it'll be terrible. But ultimately, if if there's a reason why the prices got so high on these condos, there's a reason that they went from um $375 a foot to $500 a foot to $700 a foot to $1,400 a foot. And it's a combination mainly of land cost, which is speculation unto itself, and huge taxes and development charges. So if you remove it, if you if you say to yourself, why is there tax on new construction, then if you decide there shouldn't be, there will be a lot more useful new construction.
SPEAKER_05Kara, same to you. What do you tell the next mayor?
SPEAKER_06I would tell the next mayor to really focus on housing in a way that like I was really disappointed when the sixplex debate came up that Olivia Chow did not use her strong mayor powers, didn't advocate really for sixplexes all over the city. She kind of like recused herself from the discussion. And I thought that is such an abdication of responsibility. Like as a mayor, you have a responsibility to make sure that these things get passed. And those strong mayor powers were put in place so that people could actually get housing passed when the council isn't isn't agreeing to it. So I see that like the way they cut it back to only being part of the city, like that is such a failure. I would like the next mayor to actually use the powers available to them to make housing available in the city. Mike?
SPEAKER_07Well, I'll just tie back to uh an earlier question. Uh, lose the market versus non-market uh mindset. There are no non-market electricians, there's no non-market sewers, uh, there's no non-market building code, there's no non-market zoning. If you fix the issues with housing, you're going to help both the market and non-market side at the same time, right? And I think we get into this um market versus non-market, deeply affordable versus market, whereas like 90% of the policy solutions helps both at the same time. So, you know, focus on that 90% and you know, don't create artificial uh conflict uh that you don't need to create.
SPEAKER_05Okay. Last rapid fire round. I know Ron hates predictions, but too bad it's my show. I want all of you to tell me one prediction that you think will happen. It can be a policy or it can be something in the political landscape to do with housing the middle class in the Toronto area over the next five years. What do you think we'll see? Carol, let's start with you this time.
SPEAKER_06I think we're gonna see a problem as house as housing is not being built right now. We're seeing condos not getting built. I think in a couple of years we're gonna see housing prices go up because like the things that would come on the market aren't going to come on the market. So I'm very concerned about that. I think I don't see any other way around that when housing was frozen basically for a little while, like building was frozen for a little while. And the other part of I was thinking of predictions, and I, you know, with the elections coming up. I hope people are going to talk about housing, but I'm like pretty concerned, and I think this would be a prediction that we're gonna spend more time talking about the jets on the island than we will about housing in the city. Why are we spending so much time on this compared to affordable housing and housing for middle class families? Like that is a huge crisis in the city. Mike?
SPEAKER_07I think we're gonna have more young people and young kids leave leave uh Toronto. And furthermore, I think we're gonna have more leaving Ontario, and furthermore, I think we're gonna have more leaving Canada. Uh I think uh, you know, one of the things that's kind of, you know, uh we're already seeing record numbers of young Canadians move to the US. And I think if their political situation ever stabilizes at all, um, I think we're gonna see a far larger out migration. And I hope I'm wrong about that. I hope our our policymakers at all three orders of government can do something about it. But I'm really worried about the uh the exodus of of youth and and talent, particularly from the GTA.
SPEAKER_05I'm gonna add in my own quick prediction before we get to Ron. Leading off of that, I do think the economic uh consequences of allowing affordability to go unsolved and not being urgently addressed are just going to compound. It was a young people's problem. It was a renter's or first-time buyer's problem. Now it's a second-time buyer's problem. Now it's a problem for seniors and retirees who want to downsize. So the longer we let this go unsolved, the more damage it's going to do to every demographic and both the Toronto and Ontario and Canadian economy ultimately.
SPEAKER_08Yeah, that's that's CMHC's number, so it's national, which is even worse.
SPEAKER_06It's gotta be worse in Toronto.
SPEAKER_08Oh, I'm sure it is. So uh uh the the nice part about being really old and really fat is I can make a five-year prediction, and I'm probably not gonna be around to prove it to be wrong. Okay. I mean, that's uh my my cardiologist would agree with that. Uh the the here's a political prediction, because I I I have a lot of fun with it. I think that we will have uh a new prime minister at the end of five years and a new premier. I think the premier will just wear out his welcome. But I I'm I think the prime minister might just think five years is enough and go on and become the general secretary of the United Nations.
SPEAKER_05And that's why we close with Ron. But now we're going to open up the floor to your questions. So please raise your hand if you have a question, and our producer Meredith will come around and give everyone a mic.
SPEAKER_03Check, check.
SPEAKER_00Oh thank you. Uh hi, Jerry Rocky and uh big follower of the podcast and newsletter. Uh you do great work. Um I'm wondering, uh is this broader uh than housing into traffic and commercial regulation as well. Because you know, in my housing association, people complain about proposals for 48-story condos around the corner, which will will never get built because they're shoeboxes. But even if we put up the six plexus and eight plaxes, the concern of people will be what about the traffic? And this is where you get into the other layers of regulation that we're taking away lanes of traffic as well uh to create bike lanes, which out of the downtown core are mainly used to deliver fast food from seven kilometers away because they won't allow commercial development within those neighborhoods. So isn't it a full package deal? Isn't it a pattern of regulation?
SPEAKER_05Well, if you watch the podcast, you know Kara's about to murder you now. So I'll let Kara go first, then Mike.
SPEAKER_06I just like I don't think we can fit that many more cars in the city. I'm like, I'm very I worry about like how are we gonna get more and more cars on the road because it's super congested already. So that's why I'm like, we need more people getting on bikes, getting on transit. We need more transit in the city for sure. But we just need ways for people to get around that aren't by car because like I just don't see how it's going to happen. How are we gonna fit more people here? And more people are coming. The population is still growing. I think over time it's still going to grow, even though I know we've cut down on immigration right now and the birth rate is low, but it's you know, people are still moving to the GTA. So we do need other ways for people to get around. Mike?
SPEAKER_07Yeah, so uh the short answer is yes. Uh, you know, and I think we saw that uh recently with with the you know the huge sort of debate about allowing corner stores in in in neighborhoods in uh in Toronto.
SPEAKER_06Only in those places where you can have six plexus too. They're like, we'll just let those places have it. Everywhere else you can't have it.
SPEAKER_07Yeah. But I would say that I do think the housing issue is very emblematic of a lot of challenge. You know, you mentioned uh Prime Minister Carney and they're they're trying to sort of build, build, build. I think it is ablamatic of the same reason why we've talked about you know developing the ring of fire for the last 25 years and haven't done it. This is a challenging country to build anything in. This is a debate Kara and I have. I believe that high-speed rail will never get built in this country, uh, just because it we can debate whether it's a good idea or a bad idea. I don't think it matters because there's just too many things blocking it. So, yes, I uh in full agreement that I think what's having on what's happening on housing is very emblematic of a larger regulatory uh and governance issue.
SPEAKER_08Well, has any anybody ever been to New York? Have you ever been to New York? So in New York, they don't have any significant restrictions on cars entering the city. Like none. And in New York, you can't take away one square inch of pavement or sidewalk for construction. It's the law. It's been the law for 40 years there. So guess what? You don't have a whole lane missing for two years when somebody wants to build a condo. Like some of this stuff is manageable, but we're just the council's the city government is dumb. Like it seriously, like if we've all been to New York, and we've all you've all noticed when you've got walk through uh uh one of these massive hoardings, it's over the sidewalk, right? And but the sidewalk's fully open. The the renovation work's being done above you, and they can't take away a square inch of sidewalk or a square inch of pavement. You can't cut anything off to build anything in New York. So could we at least do that, please? Jesus, please, okay? Like this is such a simple thing, and it wouldn't change the world.
SPEAKER_06Could we also take their congestion charge? Because I think that's one way to get cars off the road that seems to have done well there.
SPEAKER_08I'm not a big congestion charge charge fan.
SPEAKER_05I'm gonna call a timeout and go to the next question.
SPEAKER_04Hi there. My question is actually for Kara adjacent. You know, we were talking about sixplexes. You mentioned, you know, the feasibility and versus the legality and actual buildability of that and where the mayor stood on the debate. You know, my question is really sort of whose job actually is it? You know, Rob um Richard Florida thinks that where governments won't build housing or do difficult local projects, it does belong to higher orders of government. In Canada, we had a uh build, what's the name of it, the Build Canada Homes program that was tied to strict limits about densification, changing zoning, doing all those things. The few biggest municipalities who had big uh envelopes to do that ultimately dialed back what they were willing to commit to due to what you suggested, and the federal government just kind of leaned over and was like, ah, that's fine. So I kind of want to ask you whose problem really is it to lead this charge?
SPEAKER_06I really think it's the provincial government that is really at fault here because like municipalities, like they are most likely going, they tend to be very NIMBY uh councils. Like all of them tend to lean that way just because of the nature of the politics. And when Toronto says no to housing, it becomes another municipality's problem. And so they have to just kind of wash their hands of it and go, oh well, that's fine. Um, I think the province should really be in charge here. They have the power to upzone and to change the building code. Like they have so much power that they can do to standardize it across the province, that would actually help as well. So I I that's where I'd like to see change because I yeah, the I would like to see the the mayor do more here. And it until the premier's willing to do that, it's up to the mayors, really, especially with their strong mayor powers. But ultimately, I put the blame on the provincial government. I know that Doug Ford said something like, Oh, I think municipalities knows know what's best for their own municipalities. I shouldn't be telling them what to do. And I'm like, well, the history suggests they don't.
SPEAKER_05The two questions tie into each other about getting things done. If there was a housing crisis in one municipality or two, or is just Toronto, solvable on that level. But it's every municipality across the province, hundreds of them. And now think about the speed of getting to solve that municipality, but we'll never get there. So I agree with you absolutely that some of that decision-making power has to be lifted up to the province.
SPEAKER_03Hi, Dana Garrison. Um maybe this is more for you, Mike, than anyone else. Um, I'm thinking about the tension between housing as an investment and housing as a place to live. You know, my parents and I I think people of my generation as well. It was buy the home and it grows in value significantly, and that becomes, you know, a retirement asset. How do you reconcile that tension with that massive growth? Because I have two sons, one is 26 and the other will be 30 in August. Um, they're nowhere near close to owning a home in Toronto. So how do we reconcile that? I mean, I have a few ideas, but I wanna I want to go.
SPEAKER_07I'm gonna say something that that I I've said this before, but only internally in meetings, and this is a point that everybody hates. So I'm gonna do it publicly for the first now. I think our problem is that we don't treat housing enough as an investment. Could you imagine a government saying that we couldn't allow the shares of Google to devalue? Right? If housing is an investment, then as an asset, then we should be willing to allow the price of that asset to fall. So I don't think the problem so much is that we're treating housing as an investment, but rather governments are are putting this kind of floor or put option on that investment.
SPEAKER_05We're treating it as a guaranteed investment.
SPEAKER_07Guaranteed investments. Yes, exactly. So so I think I think that's it. And and I I do think that you know, not quite Ron's age, but I'm I'm approaching to it. And and uh I am got a long way to go. I got a long way to go. Uh I'm getting there. I'm getting there. Um, I will say that every every generation, I think, needs to learn that because you know, I could, you know, my parents bought a home in London, Ontario in 1988. The nominal value, not even the inflation adjusted value of that, they bought top of market in '88, and that home didn't recover in value until 2004, right? But it's I it's something about our species that we just don't learn uh these generational lessons. Because I saw, you know, my parents didn't get burned about that because they weren't never kind of assuming uh that they were going to leave. Uh, but they were underwater on that mortgage for a very long time. Um so, but it seems like every, you know, every generation, or at least enough of a critical mass of that generation, believes that like home prices never go down, even though the history of it is more, you know, uh hockey stick up and then a crash and then hockey stick up and a crash. Um so yeah, so I I like I understand the the the premise uh of the uh of of the question, uh, but I I do think these things are reconcilable if we if we truly understood that investments go down in value and we had governments that wouldn't go on national TV and say that uh you know no uh home prices don't need to be lower. Uh so I think it's I think it's more an issue with with our our political class and them sort of not allowing for uh for market corrections. But I know this is a very unpopular thing to, you know, it's very kind of counterintuitive to say, actually, I don't think we treat it enough as an investment.
SPEAKER_03I'm gonna allow a follow-up.
SPEAKER_07Yeah, a follow-up.
SPEAKER_03Um I think part of that though is that if you look at incomes at particular age ranges relative to housing prices, that's what happens when housing is treated as an investment, is that it's becomes further out of reach on those, you know, uh from that perspective. Because relative to a house prices you know, when I was 35, that's actually when we bought our first home, but we had moved here from Saskatchewan. Um expectations are a little different. But um you know, uh at that age, uh the relative to income, the housing prices were nowhere there was nowhere near the gap. So reconcile that.
SPEAKER_07Well, I I I don't think those those those two things are are related. I have an ad uh From uh the Ottawa citizen on the speculative potential of owning land in the Glebe. The ad is from 1911. Um housing has in the land has always been an investment. I think what's changed, and I totally agree that the price to income ratios have gotten out of whack, have changed that that I think, you know, number one, I think we've gotten very restrictive around where to build, that we've we've literally turned housing into Bitcoin, not in the sense that it's an investment, but in the sense that there's a controlled increase in supply. Um, so I think that's changed. But I do think that we have a class of politicians today that have a different viewpoint than in say 1990, where in 1990 it feels like we understood that we have to have market corrections and that's okay. That's an inherent part of capitalism. Nowadays, again, I feel like we have these governments who say, oh shoot, prices have gone down, or or prices even look like they have downward pressure. We cannot allow that to happen. So so I think I actually think you and I are probably in more agreement than than than disagreement. I think you know part of it is just kind of a terminology thing, but I do think something has fundamentally changed. I, you know, I I would just kind of characterize it a little bit differently.
SPEAKER_01Hi there. Um my name's Theo, longtime fan of the podcast. Um my question has to do with um land prices. We talked a lot uh in this room today about how the high price of land means that a developer can't afford to build that, you know, affordable thousand square foot starter home. They have to build the 2,500 square foot McMansion for the math to work out. Similarly, for higher density, we can't afford the fourplex, we have to build the super high-rise dog crate condo in order for the math to work out. Um one counterargument I come across, or rather potential policy solution to this land is too expensive problem, is the idea of Georgism and land value taxes and things like that. And um I wonder if the missing middle initiative, the folks there here, uh have a sort of opinion on land value taxes. What do you guys think of them? Are they good? Are they bad? Um and uh yeah, that's my question.
SPEAKER_06Okay, so Karen and I'm very excited. Yeah, Karen and I've made this a long argument on this.
SPEAKER_07So my viewpoint is it's like asking, is a screwdriver a good tool to use? And they're like, you gotta complete the sentence. I think land value taxes make a lot of sense in certain uh problems to have. So if you had uh let's say uh a let's say a city in the U.S. Rust Belt where you're you don't have a lot of development and they're really trying to actively come in and get industry, get people to actually build things. I think a land value tax makes a ton of sense where you say, we're just gonna tax the land, but you want to build a structure, we're not gonna increase your property taxes, it's just gonna be the same as an empty plot of land. I think that makes a ton of sense. I don't think in the Toronto context or the GTA context, it solves the problem we have, which is artificial land scarcity. Now, if you coupled that with say, oh, by the way, but we're also going to uh eliminate uh urban growth boundaries and eliminate the greenbelt, then like, okay, yeah, that would probably work, but it would work because you eliminated urban growth boundaries and you eliminated the the greenbelt and that would shoot the price down, right? So so I think ultimately the the core issue is the underlying scarcity of land, and at least in this part of the country, like you know, if you're talking about Vancouver, okay, you know, you've you've got some kind of natur, you know, some really big natural limitations there that land is going to be expensive, and then you can say, okay, would we rather would we have it rather have it expensive on the CapEx side or the OpEx side? Um, but here um our land scarcity is largely self-imposed. And again, there's you know good good reason for that. I don't want to see sprawl or what have you, but I just think we've been using the wrong kind of uh anti uh anti-sprawl policies. But this is something we debate about a lot of people. Here I go.
SPEAKER_06Yeah, I was just thinking that the if the problem that you're trying to solve is taxing wealth, that's where I think it comes into effect. So that's where uh where we sometimes argue about this is like how can is it possible to tax wealth and how can you do it? And land value tax does seem like a way that you can do that. So if that's a problem you're trying to solve, it that might be a good option.
SPEAKER_07Yeah, fair enough. I would I would agree with that. Yeah, if if if it's so much yeah, if it's so much you're just trying to tax people who uh are very, very wealthy. And nice thing about land value tax, unlike I don't know, people buying fancy art or whatever, you know, you can't, you know, offshore a plot in the glebe. Uh though I'm sure some of my neighbors have tried.
SPEAKER_05Well, let's try to get through one, maybe two more things.
SPEAKER_07Doesn't matter what the next question is, it goes to Ron.
SPEAKER_02I one was wondering if you know if if you can give us some perspective on maybe what the motivations are from the different levels of government. So, for example, you mentioned that uh federally they're looking to, they don't want the housing market to crash. They're looking to protect those home values. How much is it in terms of protecting, you know, old age security, boomer generation, like just you know, avoiding a big recession on the municipal side with DC charges? They were so high, but at the same time, the market, the investor market, was able to absorb it. And the city like people the city knew must have known that. So keep raising them because they knew they can get them and they needed the money. And then provincially, I don't have a specific policy, but just what's the motivation there?
SPEAKER_08Well, I actually know the answer to this question, but uh these guys could could jump in. The answer to this question is politics is the answer. So who votes the most most consistently and votes in every single election, including municipal? Old sons of bitches, yeah. That's right. Old people do, okay? So if old people are the voters, you would tailor your policies around support of these old people. So when Mike talked about Premier Ford suddenly saying, you know what, I I I don't want to get involved in these municipal things. I think the municipal, the mayors are great, he always says dumb stuff like that, right? Oh, there's they're so great. They're my friends. Uh so the the reality is that he doesn't want to get involved because that's his voter base, too. Because the people who vote the most often, most consistently show up through wind, sleet, and rain to vote and come in their wheelchairs, these are people who are dedicated to voting. Whereas young people vote far less and far less frequently and far less in anything but major elections. So if you want to understand why there's so many strange policies, like why wouldn't you build a four-plex on a 50-foot frontage lot? I mean, my whole neighborhood is just that 50, 60 square foot frontage, and uh I'm not in Toronto, I'm in Mississauga, but the huge lot, huge lots, you could build a four-plex on them effortlessly. And to deal with the issue of condominiumization, which is a problem for these small units, um, you could actually sell a four-plex. I lived in a four-plex when I was in my 20s in Calgary as an own a four-plex one person owned. And he there is everybody owned their own quarter of the four-plex. So it's doable, but the tension amongst mayors who know that they get elected by ancient people and Ford knows that's his voter base too, and God knows Carney knows that's his voter base, right? So why would anybody re- the re- the only reason Gregor Robertson said, the housing minister, the federal housing minister said, we don't want to see values go down? Well, first of all, he's got about $13 million worth of values out in the West Coast that he owns, he doesn't want to see go down. Okay, that's one thing. But the other thing is that that's the key voting block for the prime minister. So why would you antagonize any of those voting blocks? So when you hear a lot of rational talk about, you know, from governments that seems sort of rational, but why don't you get the policies right in the end? That's the reason. It's politics.
SPEAKER_07So I'm gonna do something unusual for me, and um I'm gonna leave with some optimism here. So I know which is I uh you know, I'm very Scottish and you know, everything's great. No, no, no, no, no. That the the the the the old people, well that could be positive, but no, no, no, no. The the old people might might uh might save us here. Um so I a friend uh who's a member of parliament was was running for for re-election, uh knocking on doors, and he was telling me, he was like, Mike, I was I was actually surprised the door, the people who are most upset about the middle class housing crisis, he kind of expected it to be uh people in their 20s and and 30s, you know, who can't afford a home or house poor or what have you. He said, no, actually the the one group that was the most pissed off about the middle class housing crisis uh was women between about the ages of 50 and 62. And it's because they have some 27-year-old living in the couch in the basement that they can't get rid of. So I actually do think there is areas for win-win policy. I do think there are areas where you can convince the young people and the old, but it is unfortunately uh, you know, doing it on infill is hard, right? But I think one of the things we say is, you know, I talk to politicians about when it comes to uh zoning policy, sixplexes, uh whole suite of gentle density policy, and I'd love to see from the province. I'd say, why not instead of trying to do it anywhere, just start it, you know, do a really bold policy of it, but limit it to greenfield, limit it to new neighborhoods, have it run that way, have a bunch of new homes created, and once you find out what works, what doesn't, and once you um people are sort of comfortable with the idea, then maybe you can start to reform on the infill side. And I do think there are areas, win-win areas like that. So I don't think necessarily we have to be at odds because I totally agree with everything that Ron says. And I do think that is the mindset of politicians, but I do think there are ways to convince politicians or work with politicians to kind of de-risk some of these things and say, no, look, there is a cohort of existing homeowners that yes, want to protect the value of their existing home and yes, want to protect the character of their neighborhoods, but damn it, they also want the 27-year-old off the couch. And if you can, if you can accomplish both at the same time, I think they're totally in.
SPEAKER_05Win-win solutions. That's a nice way to call it.
SPEAKER_07Well, I've never done a positive, but you love it.
SPEAKER_08There's another way. You can take box up the 27-year-old in the basement Star Wars toys and put them in a different place, and he will go out in a search for them, and he may never come back.
SPEAKER_05Ron, we were so close to finishing on a nice note. But thank you, Ron, Kara, and Mike, for your time and your unfiltered answers. Thanks for organizing this, Sabrina.
SPEAKER_07Thank you. Yeah, this was all Sabrina.
SPEAKER_05Not at all. Thank you for our production team behind the scenes here and our technical team and to the national club for hosting us, the perfect venue for this, and most importantly, to our audience. The good news is we'll be sticking around for a little while. So grab a drink, come say hi, introduce yourself, and we'll answer even more of your questions.
SPEAKER_07And make sure you say hi to Meredith and Sean and Mike here. Uh, because they're wave if you're part of our team. They they make us at least sound good, and hopefully, when we see the video, we'll look good as well.
SPEAKER_05Okay, thank you, everyone, and we'll see you at the car.
