E89: Is Toronto Building Enough - Brad Bradford on Housing Supply

“BB: You might be in a better position on some major streets, where we don’t require you to do the commercial component, and you can just build six units, six floors of residential, versus an avenue at six, where you got to put in a commercial. But again, these sort of policy objectives that we have that end up being at odds with the actual regs of how you would deal with it.”

[INTRODUCTION]

[0:00:19.4] ANNOUNCER: Welcome to another episode of Sync or Swim, brought to you by Rentsync. From operational challenges to marketing mastery, we uncover the strategies in technologies and all things PropTech. So, let’s dive in as we explore the trends, tactics and insights that define the future of multi-family investments. Sync or Swim starts now.

[0:00:41.8] GL: Hey, everyone, my name is Giacomo Ladas, and I’m excited to share a very special episode of Sync or Swim. A few months back, Rentsync wrapped up its first Cross-Country User Roadshow, connecting with industry leaders and multi-family professionals across the country. One of these stops was at the beautiful Eglinton Grand Theatre in Toronto. Now, a key highlight from that event was a fireside chat featuring Toronto city councillor Brad Bradford, an urban planner and passionate advocate for housing supply. 

To interview, Brad was the one and only Gabriel Diamond from Well Grounded Real Estate. Together, they both explored the city’s most pressing questions, “What is Toronto doing well in encouraging housing supply, what does it need to improve, and what policy changes may still be on the horizon?” It was a lively and insightful conversation, and we can’t wait to share it with you today. So, without further ado, here’s our live recording from the Toronto Roadshow. Enjoy.

[INTERVIEW]

[0:01:28.0] GD: Thank you so much for Rentsync for having us out today. I think, you know, to provide a platform to allow developers, operators, landlords, you know, and political leaders and a lot of people here, residents of the city, you know, it’s really important dialogue to have and thank you so much for having us. We were sort of joking before, I think the last time I was in this venue was either – I think – I think the last time I was here was to watch The Titanic when this was an actual movie theatre. So, that was – it’s pretty interesting experience when you’re 12 years old.

[0:01:57.7] BB: We were commenting on that because I’m an ‘86 model, he’s ‘87, and so you’re in the movie theatre with your parents, formative years, and there was that particularly steamy scene. It was a little awkward to be sitting there with Dad watching that.

[0:02:08.3] GD: Yeah, just look straight ahead.

[0:02:10.1] BB: That’s right.

[0:02:11.0] GD: Yeah, I never really thought we’d be on the stage here, you know, here we are. So, you know, I don’t know if Brad needs a whole lot of introduction here, but Toronto City Councillor, Board 19 Beaches-East York, also the chair of the planning and housing committee, and I’m sure a lot of people in this room know and appreciate one of city hall’s, if not the most fiercest housing advocate. You know, we’re very lucky to have him here today, and I think you’re a pretty popular guy in this room, so.

[0:02:38.0] BB: Yeah, it’s nice to be in a room where people like you, that’s not always the case, but it is great to be here, and what an important conversation to have. I think it’s cool that Rentsync has been kind of taken this across the country now because so much of these conversations depend on the local market, the jurisdiction, the rules, the regs, the appetite for development, the rental vacancy rate, all of that stuff is very much a local conversation. 

And so, it just seems like a great move to be able to move it into different markets, and of course, you’re spending the day here in Toronto with all of us, and I’m really grateful for that, too.

[0:03:06.8] GD: Awesome. Okay, so first question, start off with fairly surface level, and really, I think, the title of today’s chat is, how would you assess Toronto’s performance on housing supply today in sort of over the last five to 10 years?

[0:03:22.2] BB: You know, I think we have a long way to go, I think it could be a mixed review, there have been some initiatives that we have undertaken, particularly when I was the chair and planning in housing, I am now the vice chair, we got a new administration, and I’m no longer running the show there. We’ve made some efforts to really respond to some of the criticism that was wholly fair and recognizing that Toronto had some of the slowest approval timelines for zoning and OPs, not just in the country but, in fact, the entire continent.

And I don’t have to tell you, folks, time is money, but we can get into some of the challenges with that. We can talk about the history of our consolidative official plan at the turn of the century there and how that really set up the legacy for these divisive and corrosive battles between neighbourhoods and centres and how development was going to evolve, but the important takeaway is we recognize that that was a problem, and we’ve taken steps to address that. 

Certainly, the province has been swinging on this and in a way that I think has been very helpful. They have recognized that approval timelines in municipalities have been a artificial restriction on the supply that we need, and if you go back to February of this year, we were rewarded from the province with the BFF, not best friends, but Building Faster Fund contribution. 

I think we took a hundred million dollars from the province to recognize that and help fund the infrastructure to build the housing. So, that’s the good news, but the bad news is when it comes to housing here in the City of Toronto, we have now entered an era where we have just an affordability crisis but a housing starts crisis, and if you are looking at the data right now, and you guys are in it, year over year, as recently as September, we’re down 81% in terms of housing starts year over year in the city. 

And I think the thing that’s not talked about at length, certainly from a public policy perspective in the eco chamber at City Hall, is what does this look like in the next 12, 18, 24, 36 months? All you have to do is take a look at the transit file here in this city, what it looks like when you take time off from building transit when you take time off from building infrastructure. We are now effectively shovels down on projects here in this City of Toronto, no housing starts.

Unless you had your financing lined up in 21 or before 2022, none of that stuff is going forward, and so what is it going to look like 36 months from now if we’re already in a housing supply crisis, we’re already in an affordability crisis, and we’re going to hit 2026, 2027, and there’s no new supply? And we didn’t talk about the 25,000 units that are available for absorption right now in the market, different theories on that, but that is going to be absorbed, and then what’s on the other side of that? 

[0:05:52.8] GD: Right.

[0:05:52.8] BB: And so, that’s kind of the red flag. So, how are we doing? There’s some things that we’ve done that I think are correcting and responding to historic challenges, but it seems like the sort of story of the day here in Toronto is we do lots of press conferences about housing, but we don’t actually do any housing, and I think that’s a big problem.

[0:06:11.1] GD: Right, no, I appreciate that. You’re talking about housing starts and certain – how long applications get – take to get processed. So, you know, I think of the private sector, you’re always, you know, you’re thinking about benchmarks and different metrics. Like, can you speak to what the city uses internally or if there are any in terms of how you’re judging performance, was it a good year, a bad year, a good three to five years? How has that stuff assessed?

[0:06:33.9] BB: I think we have a 2030 housing plan, and someone can correct me, but it’s some sort of number, like 230,000 housing units by 2030. We’re nowhere near on track to hit that, and now, we’ve just taken a catastrophic careen off the cliff. We have a housing supply cliff that we’re hitting, where we’re not bringing any new supply to the market, and instead of asking the questions as policymakers or leaders in the city, “What could we do to assist with that?” 

We continue to pursue, you know, an agenda of public builder, where the city of Toronto now fancies itself as a developer, and we are going to invest time and money and resources in trying to build more bureaucracy to build more housing. So, at a time when it’s never been more risky to build housing, new folks are all in that space. We want to internalize that risk, we want to internalize that expertise and experience. 

We can’t buy that from the market because you folks will never let us have the best and brightest people, and they’re not going to come work at the City of Toronto. So, that means we’re going to spend a lot of taxpayer time and taxpayer money on this exercise to try and become the public builder, and we’re taking 340 million dollars from the Federal Government Housing Accelerator Fund. 

We’re going to put that towards maybe 2,200 to 2,500 rent year-to-income units, and if we yield anything on the other side of that, it will be the most expensive affordable housing in the country’s history, and so this is a challenge when we start embarking on the pursuit of ideology rather than ideas, and when it comes to housing, like, there’s a lot of practical solutions out there that I think all of you folks are aware of. 

When it comes to our zoning reform, when it comes to as of right, when it comes to fixing the missing middle, when it comes to responding to our urban design guidelines, which you go back and rewind the clock to 2015 when we were promised to be this mid-rise city, we were going to be like Paris or DC, modest sort of mid-rise on our avenues, and yet, in a city that’s had more development activity over the past 20 years than anywhere else on the continent, we’ve managed to produce 112, 113 mid-rise buildings.

So, the smart question for leadership and folks in the public policy arena to be asking is, “Why is that? Why do we have hundreds and hundreds of 40, 50, 60-storey buildings, and yet, all the hype around mid-rise, and nobody’s built it?” Well, very quickly, you would start to realize that it’s more cumbersome and more difficult to build the six-storey building than a 60-storey building. So, what happens? 

Well, people rightly build the 60-storey building and get down into the weeds about our type-G loading requirements for garbage. You can talk about ingress-egress, you can talk about the angular plain, you can talk about how the wedding cake vernacular, that’s an architectural word for all you architects out there.

[0:09:12.5] GD: It’s very refreshing to hear you speak a lot of the language and probably what you hear in a lot of our boardrooms as well, to – 

[0:09:17.5] BB: But the wedding cake vernacular, that’s become the sort of Toronto hallmark of what we considered great urban design. You might like it, you might love it, you might hate it, but the net result to that has been these projects cost a lot more money. They’re more difficult to build, and so you’re only moving on that if you’ve had the land for a long time and the lands cost you nothing, and frankly, it feels like a herculean effort for folks out there in the building community to get anything approved, and actually get shovels in the ground.

So, I kind of forget what the question was, but the sentiment was, are there things that we can fix? Yes. We’re fixing those things, those are supply-side solutions, and I think that’s what’s really important because despite all the challenges right now with construction cost and interest, and labour, and all those headwinds that you're facing right now, my goal and my objective is to set the table here in this development market so that when things do improve, we’re ready to go and we can help facilitate that. 

We can be partners in supporting the type of development and investment that we need to see in this city because I think the biggest risk facing Toronto right now is the fact that we had 50,000 people leave the City of Toronto last year, and those were people with good jobs, contributing to our economy, growing the GDP and in this flight for affordability, they’re leaving the city. Couple that with 200,000 people who are moving into Toronto because we have a concentration of services and support. 

So, they come here for that, and that’s important, but what that leaves us with, if that trend continues, is that a city that has a concentration of high-needs individuals, a concentration of poverty, a concentration of global elite that are hollowing out of the core, and that promise of a better Toronto where you can be an entrepreneur, you can bring your time, your talent, your treasure, investment, build something, raise a family, that is starting to slip away. 

And we cannot rest on our laurels that the fact that we’ve had that success for the 20 years that that’s going to be here on a go-forward basis. So, we focus a lot on the housing continuum, we focus a lot on the deeply, deeply affordable. We talk about rent geared to income massive subsidies required to be able to do that, but what we don’t talk about, and this is a supply side of it, is housing that people can afford. 

Now, I make a hundred and twenty grand a year, right? Or then or about, and so I would make too much money to qualify for any sort of subsidy, but for a lot of folks, it’s not enough money to live in the City of Toronto, and that is where the PVR conversation is so important, that is where the mid-market conversation is so critical, and that is something that we, frankly, spend very little time focused on at City Hall, and I think it’s to the detriment to the future prosperity of the city.

[0:11:55.7] GD: I think I probably speak for a lot of people in the room, it’s really nice to hear you, like, really hammer home the point that this is a supply issue, right? Because I think a lot of times, honestly, at all levels of government, you see what a lot of people seem to acknowledge a supply-side issue that we’re trying to solve with demand-side levers, right? And that’s proven not to work. 

I think it was during COVID, I – to be honest, I can’t remember whether it was the City of Toronto or the province, but gave everybody a rent subsidy. I think it was a CAD 500 check, which on the surface seems great, but I mean, we were all sort of sitting there, and to be honest, as a landlord, I mean, we’re sitting there saying, “This is probably going to end up going to us, right?” Because everybody, you know, you have CAD 500 in your pocket. 

You’re going to say, “Uh, you know what? I’ll stretch myself. I can apply for an apartment that’s CAD 30, probably above my budget, but I’m going to apply for this.” And you know, if you give more money to people in their pocket, it’s not – it’s not going to make life more affordable, right? You need supply, we need to drive that down. I think a number of the presentations this morning sort of prove that, or you look at other markets like Austin, for example. 

I think that’s sort of a hot topic these days, where we let developers build, and you know, see that the rents will come down, and things will sort of normalize a little bit.

[0:13:02.8] BB: Yeah, and it’s different types of products at different price points in the market. It’s different products in different neighbourhoods, and just to roll it back, the 2003 consolidated official plan, the grand bargain that was struck at the time of amalgamation, really dictated and said, “We are going to direct growth to the avenues,” which never really happened, trying to fix that now. “And the centres.” 

And what is going to be off-limits, of course, is the stable residential neighbourhoods. We codified it with language, like character of the neighbourhood that really was preservation. Preservation of status quo, and like, you could get away with that for a while, but now, it’s at a breaking point, and so one of the initiatives I was leading and continue to push on as the expanding housing options and neighbourhoods, which is really about unlocking this missing middle. 

We ended the exclusionary zoning, we’ve introduced pathways for garden suites multiplexes, and recognizing that we need more housing options in more neighbourhoods that had been off limits for so long, and when you think about the type of builders, there’s the big players in the market that have been around here doing it for decades. But I think it’s also about unlocking a new entrepreneurial class of builder that we haven’t seen before because it has been too cumbersome and too burdensome to do it.

But the type of people that could pull a little bit of capital together and start unleashing housing and rental units in neighbourhoods where that wasn’t possible before at the scale of dozens and dozens. But you add those up across all 640 square kilometres of the city, and you give that five, 10 years to build that and manifest, now we’re starting to get traction, and so to my mind, you know, that’s not the super flashy thing that I’m going out and doing an announceable on. 

20,000, 40,000, fictitious high-in-the-sky units that are never going to be built, but give people in the market an opportunity to address the biggest challenge in front of us, which is the housing crisis, by putting their capital and their experience and their entrepreneurial spirit into something, a shovel in the ground, new opportunity to do that, I think that’s more helpful than not, and it’s not going to be the single thing that solves any of our problems, but it is additive, and right now, we have to be adding.

[0:15:03.5] GD: But you add it all up. I mean, I could – I could add an anecdote for us. We have a small walkup building, about 26 units at a Bathurst in Lawrence, and we had an opportunity to add a basement unit, and we did, and it worked out, but the hoops we had to go through, the site plan where, you know, all these things, the development charges, all of these things that – I mean, I think it took over a year just to sort of get those building permits and get everything set up and like, one unit, drop in the ocean. 

It’s not going to do absolutely anything, but 50,000 rental unit – buildings in the city, this, this and this, to your point, you know, develop some laneway suites, whatever the case may be, and you can activate, you know, that part of the private sector, start to create an environment that’s a little bit more pro-supply, and you start adding to it, and probably adds up in the end, right?

[0:15:48.7] BB: I think we need a lot more collaboration, and what I mean by that is, again, we’re not the experts, we don’t have the expertise in-house. A lot of the folks in the bureaucracy, and you know, I used to work in the chief planners office. I’m an urban planner by training, so I was there, I saw before I ran for council very good intentions, smart, thoughtful people. 

But having not spent adequate time in your shoes, in the position of experience of trying to do this and push that boulder up the hill, mistakes get made, and you see it all the time from a policy perspective. Anyone who follow the major streets work here in the city of Toronto? So, it’s exciting, and it’s net positive, but I found myself a committee with the policy that was coming forward from staff in our own economic analysis, which was, you know, appendix one. 

Said, “If you cap the number of units on a six-storey building at 30 in Scarborough, this project will not be financially viable.” And so, I’m sitting there reading this, sort of God struck smacked, and you know, it occurred to me, I am so frustrated and sick and tired of us bringing policies forward that are dead on arrival. We make the most modest acknowledgement that there are challenges that we need to fix. 

But we are so meek in our response and so weak in our response, and I don’t think this is a time for weakness. I think it’s a time for strong, assertive, and bold action and leadership on these files. The good news is I was able to resolve that between committee and council, bump it up to 60 units where type-G loading requirements come in, where you’re probably coming in for minor variances anyways, and that made a lot more sense, and I think that major streets will have some legs. 

In fact, you couple that with our avenues policy, which is also frustrating. You might be in a better position on some major streets where we don’t require you to do the commercial component, and you can just build six units, six floors of residential, versus an avenue at six where you got to put in the commercial. But again, these sort of policy objectives that we have that end up being at odds with the actual regs of how you would deal with it. I could give you a million examples, I mean – 

[0:17:44.1] GD: But do you think is that because you know, when they’re making this policy, they don’t have – you’re sort of missing some players around the table that you're not getting developers, builders in the room when some of these decisions are being made to say, “Hey look, we’ll show you our proforma, this doesn’t actually work,” or is it – 

[0:18:00.8] BB: You know what? It’s political. Look, I operate a number of round tables, I’ve got my housing action plan round table, I’ve got my missing middle round table, like I am constantly talking to people who are doing the work, building the housing that we so desperately need, and look, I’m not a developer. I can drive an Excel sheet, all right, but I’m not an expert like you folks, and so I listen to people who know a hell of a lot more than I do. 

And that’s where I’m taking my cues from, and I think it would behoove old folks in leadership to take some courses or, at least, try and read up on some of that stuff, but I think it’s not that people are completely blind to it. Again, our consultant report told us that. We attached it to the report that went to the council. It’s the politics of it, and there are a lot of challenges with that, again, when we lead with ideology rather than leading with ideas. 

When we’re closed-minded to the solutions that are going to be required to fix the challenges when there’s a lack of recognition that it is, in fact, our policies that put us into this mess. You got to have the humility to stand up and say, “Yeah, that might have been the right approach in 2003, and maybe that was a good idea in 2015, but it sure as shit not working today.” If you can’t do that, then we’re lost.

[0:19:03.9] GD: Why do you think it is such a divisive issue or a political issue? I mean, like, why? I mean, I understand NIMBYism, but everybody should be, one, sort of a more affordable city or develop housing. But you know, it’s having this sort of developer versus tenant, landlord, resident. We can’t have the big bad developer line their pockets, and you know, they’re sort of missing this, I don't know, sense of, the solution’s going to help everybody else. 

And you know, from a developer standpoint, you’re putting a considerable risk often guaranteeing loans, you know, personal, Like, the amount of risk involved to develop a fourplex is immense. So, I don’t know, it always kind of – like, why there’s this contentious attitude or, “Oh, why don’t they just build it cheaper, offer lower rents, or lower sales?” It’s like, “Well, the puzzle doesn’t fit,” you know?

[0:19:49.2] BB: It’s funny, and this is why there’s a bit of a disconnect. I heard from an applicant where the city of Toronto incorrectly circulated the wrong drawing set on a minor variance, and so I went out to the community, and wrong drawings, wrong proposal, earlier iteration, and then they called up the applicant, and they said, “Oh, actually, like, really sorry, we’re going to have to punch you off September, not able to do it, circulated the wrong drawings.”

And the applicant said, “Well, jeez, like, that’s unfortunate. That’s going to cost us a lot of money.” And they’re like, “Oh no, no, it’s not a big deal, like, we’re not going to charge you for another application, and we’ll try and get you on the next agenda. If it’s not next month, it’s the month after.” Well, like, that’s a hundred and eighty thousand dollars of interest that we’re paying on this project. 

So, like, it actually is a big deal, and that’s a couple of people’s salary. So, the disconnect, and it goes back to time and money at the city and even municipality, but the disconnect of the real cost of time and how that ultimately impacts affordability, whether that is the rents or the viability of a project or the per square foot when you go into a condo into the market is quite stark. The politics of it, which is the sort of first part of the question, I first ran for council in 2018, and I ran on a very pro-housing agenda. 

Being an urban planner and being exposed to that, being a millennial, being someone who thinks about it from a generational perspective of the people who are getting screwed and jammed out of the city that we’d all like to contribute to, I was very clear on that. But if you think about the politics and we’re in mid-town, of course, perhaps the most political place for housing politics may be in the country.

[0:21:23.0] GD: No comment.

[0:21:24.0] BB: Yeah, well, that’s okay. I’ll do it. The history has been that you could take an 18-storey building and knock it down to 12, and you are rewarded at the ballot box for doing that, which is quite perverse, and you think about that in the – today’s context. You're getting rid of housing, and then, in fact, that’s something that you want to beat your chest on and campaign on. You know, how much housing was I able to remove? 

The stigmatization of developers, of the very people that we desperately need to invest and take that risk and bring that expertise and bring the housing that we need, the stigmatization of those people is wrong, but it’s cheap politics, and it’s easy to do, and it’s all politicians who often are talking about – talking to the people that live there today, not about the people who could live there in an abstract tomorrow. 

And so, there’s that fundamental disconnect, I think, between historically, and I think it’s changing now, but historically, between the elected official and the voter and for 20 years, we have seen that type of politics as the truck and trade in a city like Toronto, and it’s been practiced through tremendous effect, and it’s been very, very deadly. When I ran in 2018, I was going against a former NDP member of parliament, he was very much a status quo guy. 

Danforth, billion dollars of subway infrastructure there online too, two-storey buildings. It’s disgusting, you know, it’s a disgusting waste of public resources and infrastructure, and yet, hold the line on that was the mentality. 

[0:22:49.1] GD: Yeah, right.

[0:22:49.3] BB: You have this kid coming in there swinging, saying like, “We need more,” and it’s got to be significantly more, and even six years on, the evolution of that conversation and again, credit to the province for sort of pushing us on all of that stuff has evolved tremendously to I think the point now where you even see some politicians changing their tune on this. People acknowledge the housing crisis. 

You’ve got two young daughters, I’ve got two young daughters, you certainly try and forecast into the future where are they going to be able to live in the city. You’ve got seniors who are over-housed, and Beaches-East York is a great example, beaches in particular, sort of big century homes that used to have five, six people living in them, now there’s one or two. They would like to downsize, but there’s nowhere for them to go. 

They want to stay in the neighbourhood, and so people don’t agree on the solution, and we can get into development charges and all of that sort of stuff because I think that’s a big part of it. They don’t agree on the solution, but they certainly have an agreement and a recognition of the problem right now because it’s – you can’t ignore it. 

[0:23:45.0] GD: Yeah, no, and I think some of that also is just trying to remove that stigma around rental, right? I mean, you see another market, you see in New York, all over Europe where people rent. There’s nothing wrong with that, and I think Canada specifically, US as well, but I don’t know, the US seems a little bit, I don’t know, a little bit better in that regard, but Canada, it’s like, you know, your ultimate goal is to have that single-family home. 

And listen, I’m biased. I live in a single-family home, but you know this idea that you know if we can put together a high-quality purpose-built rental design for families, suddenly you have that option, right? Living downtown in a, you know, in a small bachelor one-bedroom apartment, which we desperately need, isn’t as practical, and you know, you see it in the data where you know, that two beds or three beds, there’s a complete lack of supply. 

So, if we can make a regulatory environment and start to incentivize that, suddenly downsizers, families, you know, the 50,000 people moving out of the city, you know, you have that option to stay close to where you are if you have a viable option because you know, homeownership is becoming less and less affordable. 

[0:24:49.6] BB: Well, a couple of things on that. So, we could choose to incentivize, and I think we ought to, but what if we started with just choosing to not disincentivize? 

[0:24:58.6] GD: Yeah. 

[0:24:59.2] BB: Is that the word? 

[0:24:59.6] GD: Yeah. 

[0:25:00.1] BB: Like, make it harder to build two and three, and there is a per-square-foot cost associated with that, but you talk about the DCs. Like, we say family units, we’ve got our growing up guidelines, we want to see 20% twos and threes, but then we’re charging you significantly more to deliver a two and three-bedroom unit. So, how does the market respond to that? A bunch of studios, bachelors, one bedrooms. 

And I understand that price per square foot and the investment model like those are easier to move, but I think PVR is actually going to play a really important role in having more supply of those two and three-bedroom units coming on board if we can get the incentives and remove the disincentives if we can get that right and set you up for success because as long-term stable asset owners, I think you recognize that it’s not just a one-time transaction before condo registration, move it out, get that off your books, and send somebody out there with a studio. 

You want a product that people are going to want and not just want for one or two cycles but for the life and the lifespan of the building, and so we need to get a serious conversation going about, all right, we say as policymakers, we want to see those types of units. We know that there is a premium associated with building those. If that’s a policy objective that we believe in, and we say it is all the time, what can we do to help you get there? 

[0:26:17.1] GD: Right. 

[0:26:17.8] BB: And those are not, those is such an obvious thing to sort of ask. 

[0:26:21.4] GD: We’re definitely going to get into that. 

[0:26:22.6] BB: Yeah, but not something that we intuitively see to start with. 

[0:26:25.9] GD: There’s also that myth as well that, “Wow, you’re just building luxury condos and luxury rentals.” But you know, when you really look at the data, that not everybody can afford that, but people that are living in more mid-market buildings and want to step up in their building, that suddenly starts to free up supply. You start to create a little bit more turnover that, you know, you’re sort of talking about earlier. 

And you know, just because you’re building luxury, that shouldn’t be looked upon in a negative fashion. You are creating supply, and it is going to cause a little bit more upward mobility in the rest of the market to help free up more. 

[0:26:59.7] BB: Of course it is. 

[0:27:00.2] GD: It’s not a bad thing. 

[0:27:01.1] BB: Yeah, I moved here after grad school in 2011, I think, and I grew up in Hamilton. Don’t hold that against me, but I landed here – 

[0:27:07.5] GD: My mother’s from Hamilton, so you’re not going to get that from here. 

[0:27:08.7] BB: Yeah, that’s nice. So I landed at Yonge-St. Clair, a little nine-storey yellow brick building on Malory Gardens if anyone here owns it, but I think it was like 1,200 bucks at the time and came with a parking spot, that was pretty cool, utilities included, and I don’t know, it’s like maybe a 600 square foot one-bedroom unit. Classic sort of galley style kitchen, same floorplan that every building built in the 1960s had, that was awesome. 

Is that where, like, you know, I might end up today? Not necessarily, doing a little bit better and have a little bit more income that I can spend towards shelter or housing, but that is such an important part of the market, and the most affordable housing that we have is the housing that’s already there. Nothing that you are building today or tomorrow is going to be more than what we already have. 

So, yes, stuff might come to market at a different price point. It might be mid-market, it might be a high-end product, but how that frees up different units across the housing continuum is so important. It should not be ignored in the conversation, and of course, you’re not stigmatized, and you talk about how people feel about rental. I recently did a tour of, I don’t remember the address, but one of Fitzrovia’s properties downtown. 

[0:28:14.5] GD: Shout out Fitzrovia. 

[0:28:15.9] BB: Oh hey, it looks like they bought a table. 

[0:28:17.9] GD: Yeah, yeah. 

[0:28:18.2] BB: Yeah, thanks for supporting. Yeah, like phenomenal building, it’s like resort living, like shit, I probably can’t afford to live here, but I’m glad somebody can, and it was really nice, and so I think we’re seeing folks in Toronto pushing the market, pushing what the market can do, and frankly like reimagining and re-envisioning what rental needs, and that’s part of like growing up as a city. 

Recognizing that rental is not just an afterthought, not just something that we built like 40 years ago, and then the condo market has been the pseudo rental market since for a ton of different reasons, but like there’s a role for that, and I think it’s going to be increasingly important, and increasingly prominent, and people who are reimagining that segment are going to have success in delivering a high-quality product that frankly people are going to be banging down the doors to get their hands on. 

[0:29:03.3] GD: No, absolutely. I mean, you talk about Fitzrovia, I don’t know, if I just graduated from university or something like that, I’d love to live in one of their buildings as well, right? But it’s funny you mentioned that, sort of a city growing up in the past 40 years, our team just a few months ago in our office, we’re reading a book. It’s called House Divided, it’s sort of a collection of essays mostly about Toronto. 

[0:29:23.6] BB: [inaudible 0:29:23.6]

[0:29:24.4] GD: Exactly, exactly, and one of the – 

[0:29:25.6] BB: He trolls me on Twitter, but sometimes I agree with him, yeah.

[0:29:28.3] GD: Yeah, well, that’s good, right? 

[0:29:30.0] BB: Yeah. 

[0:29:30.3] GD: That’s healthy, but one of the essays in there is talking about a whole bunch of those stunning apartment buildings that are in Rosedale, right? I mean, you got probably the most lavish neighbourhood in the city, huge single families, and there’s, I don’t know, 15 or 20 of these, you know, sort of classic 1950s, 1960s walk-ups that integrate pretty seamlessly into the neighbourhood. 

But reading this essay and there’s all these, I don’t know, there are sort of like clips from articles. I don’t know, it’s like Toronto Star or The Globe or something and the nimby talking points from the 1960s, you would have thought it was something you read last week. It’s the exact same argument, “Oh, we don’t want, we want this riffraff in the area, and the safety, and the this, and the that.” 

And it’s like, I don’t know if that sentiment just hasn’t changed at all. I mean, it was like I couldn’t believe what we were reading, like, “Hey, aren’t we past this?” Listen, there’s good landlords and bad landlords, good tenants bad tenants, just deal with people on an individual basis. You don’t need to paint in broad strokes that tenants are going to ruin the neighbourhood or any nonsense like that, and I don’t know, it was kind of funny but very disappointing. 

[0:30:35.2] BB: I think people have become a little bit more veiled in their critiques, a little bit more sophisticated. They talk about, “Oh, we need housing and affordable housing.” This is the favourite one from the left actually is like, “Well, we need more housing, but we need more affordable housing, and this project doesn’t have affordable housing.” So, it’s the poison pill, like our housing now cites or others increase the threshold of affordability. 

So, 20% is not good enough, it’s got to be 30%, it’s got to be 50%, 50% affordable. That’s like, that’s a death nail. It kills the project, so they actually will weaponize the desire for affordable housing, which we would all agree upon but put in requirements that effectively make the project DOA dead on arrival, never gets off the paper, let alone into the ground, and that is the way. I’m not trying to be left or right about it. 

But just historically, progressives in this city have been champions for status quo and effectively been able to sort of kill these projects before they ever start. It’s the poison pill at council that has often put in under the veil of something positive that the public is very busy living their lives and they’ve got a lot going on. So, they’ll just say like, “Oh my God, why did you vote against all of that affordable housing?” 

Well, because 50% of zero is zero, and that’s what’s lost on people. If it’s not going to get built, we’re not delivering anything. It’s smoking mirrors. 

[0:31:49.3] GD: I think the city and, you know, all of us with government, you want to have more restrictions and legislation. I think, you know, that you’re sort of just kind of missing this overarching theme that the market will, you know, in a capitalist society, like the market will produce – 

[0:32:03.5] BB: Oh, like the one we live in supposedly, yeah.

[0:32:05.3] GD: Right, exactly, the market will produce what people want, and what makes sense, and what’s financially viable to make a risk-adjusted return. So, you know, if you tell people, “You have to have this many units and this many this,” it seems like politicians or, you know, cities, they want to have that mandate, but if you sort of actually remove a lot of the restrictions, and then let the private sector figure out, “Okay, you know what? Affordable housing actually makes a lot of sense in this area, and to build this.” 

But I guess there is that sort of that lack of trust that that market will play out, you know, with the private sector says will happen or – 

[0:32:38.0] BB: And what does affordable housing mean? 

[0:32:40.0] GD: Yeah. 

[0:32:40.4] BB: Like, let’s actually try and find some consensus on what that means and let’s also have a conversation. 

[0:32:44.8] GD: Have you read the definition on the city website? 

[0:32:46.4] BB: Well, it changes actually, and it keeps changing, and you’ve got CMHC requirements that are different than our own requirements. You’ve got rent here to income, which is an entirely different level, and then you have a conversation in the City of Toronto. For Toronto folks in the room, like it’s a monolith, like it’s one market. Like, my goodness, how ridiculous is that? 

So, if you’re taking 80% AMR and building that out in Scarborough, that might be more expensive, you know, in the City of Toronto context versus what would be market out in Scarborough. If it’s actually ridiculous, it’s not one monolithic market here in the City of Toronto, but that’s the way we measure it. 

[0:33:20.4] GD: Yeah. 

[0:33:21.1] BB: You know, when you guys know, you guys, you spend a lot of time and energy sort of figuring this out when you put in an application together, and I remind folks both in City Planning and you know, here at Toronto and residents, like if you’re building a project for example, you know in my neck of the woods, Main and Danforth, where we have a lot of activity coming online, that is one of the most transit-rich intersections in the entire city. 

You’ve got the main subway station, you’ve got the terminus of the Gerrard Street Car, and you’ve got the Danforth Ghost Station all right there. So, in a bunch of those projects are rental, so who is going to be coming there? A lot of people are going to be coming there precisely because there’s so much transit, and so they might be making a life decision and a choice not to have a car. 

But the amount of pandemonium that there’s not enough parking, meanwhile you’ve got, you know, towers at Main and Danforth that have been there for many years that have five levels of underground, they rent one to the people in the buildings, they rent two to the Kia and Honda dealerships, and then two of them are deteriorating down below, but I have conversations with the applicants out in Etobicoke, and they are trying to find more parking. 

They are trying to do joint ventures on parking lots to secure more parking for their tenants. They want to build more parking because they know in that market they need to provide parking. So, I would just say leave it to the folks who literally have their dollars on the line with these things, and you’re going to build something that A, you’re going to be able to sell or B, you’re going to be able to lease out on an ongoing basis, and you’re going to take steps to secure that so you can compete. 

[0:34:45.9] GD: Yep, yeah, no, it’s a great point. I mean, I think at sort of a high level here, you know, we’re talking about supply and how to encourage supply, and you know, a lot of it comes down to, you know, capital allocation, right? Developers and investors, you know, you have the freedom of capital. You can allocate it, you know you can build purpose-built rental in Toronto, or you can go to a different market. 

You can go to Denver, Austin, Miami and build, or you can just build a different asset class altogether. You can build industrial, you can build retail or just a completely different asset, you know, equities, fixed income, pictures of monkeys, whatever people are investing in. So, I guess my question to you, and you know, what a lot of people probably want to hear about, is like, what levers or like how do we create a regulatory environment to incentivize what we need the most, which you know, in a lot of cases is rental? 

Like what levers, whether it’s DCs or taxes or otherwise, that you personally think make the most sense and you would like to see the rest of the city council get on board with? 

[0:35:45.5] BB: Well, I think like there’s a bunch of different things that we can do and all the process improvement things, and as of right, and expediting timelines, that’s super important for all projects across the board regardless of size and scale. I think making the math work is the most important component that we all need to be [seized 0:35:03] with right now. [inaudible 0:36:04.4] with that. 

But we need to recognize if we want to counter the forces right now, the fact that housing starts are down 81% year over year right now in a housing crisis, then what levers do we have at our disposal to help move the needle so we can fix the process? We’re working on that, but at the end of the day, the math has to work, and it’s more difficult, of course, on the rental side, where you are not going out and selling units to unlock your financing and it is so capital intensive. 

And so, the feedback I hear from folks, and there’s been a lot of individuals in the building community, and in particular PVR, that have opened the performas and shown us what that looks like. We have to reduce the cost, and it’s a recognition that nobody makes more money on housing than the government, and the taxes and the fee structures are completely unbearable. We’ve got a very ideological chair handpicked by the mayor, Gordon Perks. 

And I’ll just say that here publically because I also say to him all the time, too, who leads with ideology on this, and just has a fundamental disagreement, him and I about the development charge regime. It’s gone up 42% over the past two years, a thousand percent over the past 12, and it has now reached a point where it is unbearable, and it’s breaking the system, and this age-old planning notion that growth has to pay for growth is one thing and sounds good as a politician to quip on that. 

[0:37:21.6] GD: Yeah. 

[0:37:22.2] BB: But the reality of that is that’s not sustainable, and you know, we can have a tax, property tax conversation, and what elements in our capital budget are growth related and what are SOGR related and how do you deal with the maturations of that, but I can’t see a lot of industries out there that can absorb a 42% increase in cost over a two-year span, pass that on to consumers, and still have a viable project.

[0:37:46.2] GD: Yeah.

[0:37:46.4] BB: And so, there was a lot of hype about, and we’ll just talk about it now, a lot of hype about the incentive-based PVR program that the mayor announced with a lot of fanfare a couple of weeks back. I actually moved that motion back in the spring, directing staff to go and come up with some policies around this, and I think what’s frustrating is there are so many people that are genuinely concerned with the housing crisis. 

This is your bread and butter, this is your industry, this is the place where you’re building a career, where you make your money, and where you are putting your efforts, but it’s such a bigger conversation beyond this room and for people who are trying to make it in Toronto, a city that feels more hostile, a city that is certainly more expensive, and for a lot of people out there, increasingly hopeless because housing, your mortgage, your rent is the biggest thing that you pay for every month, every year. 

And so, when we come out as a city and make an announcement on CP24, and they take the headline right from the press release and just say, “Oh, like, new rental program for $20,000 units.” But nobody acknowledges that the first 7,000 units is sure as hell better, already have access to the federal apartment loan construction financing program, which is already over capacity and oversubscribed.

So, if you don’t have it, sorry. It will be great for those individuals that do, and that is positive, but 13,000 units of that 20 requires 8.3 billion dollars of funding, subsidy, or low-interest financing. It’s pretty dishonest to go out and put a number out there like 20,000 to try and – which effectively creates an incentive or a perception for people that this is happening and this is moving, and that’s why I said we’re great at announcements, but we’re pretty poor at execution. 

And you know, in the last hour from, if any of these were involved in those conversations, over the summer, I thought that we were actually headed in the direction of something that might work for a change, and what I called for, I had an opt-in in the start a couple of weeks back, responding to what was brought forward, and it was very clear. Like, we needed broad, across-the-board, waver of DC right now. 

We need waver of parkland dedication, and you need to put a sunset clause on it as well. Two years, and like, we’ll provide that incentive for you, but you get the shovels in the ground right now, and that’s what we heard from industry and people who are doing this, and that’s how we would take the 18 to 30,000 paper approvals, which you can’t live in, you can’t live in a paper approval, but get those shovels in the ground. That’s what will be needed.

What came forward was this requirement of 20% affordable, and again, sounds great, but the whole point of this exercise was recognizing that we needed to reduce capital, we needed to reduce equity requirements on the front end for these projects to be financeable, for you to make a go of it, and instead, we came out with a program that requires you to have financing to get the relief.

[0:40:34.3] GD: Yup.

[0:40:34.6] BB: That’s nuts. If you have that from the Federal Government, and I think optimistically because it feels like I’m being negative up here, but optimistically –

[0:40:41.7] GD: Well, that’s what I was going to say. Do – and I know we’re running out of time a little bit, but I –

[0:40:45.5] BB: Where’s the clock? Okay.

[0:40:48.1] GD: It’s pretty low.

[0:40:48.3] BB: Oh, wow.

[0:40:49.3] GD: So, the final minute, not to cut you off, to be a little more aspirational, how do you see the next five, 10 years of Toronto housing policy, what sort of innovative – 

[0:41:00.7] BB: All right, got it. I believe tremendously in Toronto. I believe tremendously in the people who want to call this city home, the people who are investing here, who are building things here. We got to get the hell out of the way and find ways to incentivize and encourage you to do that. You’re not going to do it if it doesn’t make financial sense, you’re not going to start projects that lose money, you can’t get them financed, you can’t get them built. 

But, the promise of Toronto still holds true. We have great healthcare system, education, great economy, diversity, and when you look around the world, all the different markets that you put your money in, there’s still a lot of reasons to be bullish on Toronto, but the word of caution is we cannot rest on our laurels and extrapolate that the success that we’ve had for 20 years is going to carry forward in the future.

Now is the time to respond to the challenges in front of us with the type of bold leadership and action that recognizes the way forward is not the same way we’ve been doing things. We can’t just focus on the prologue of how we got here today. We need to write a future together if that empowers partnership with the market with the private sector because it is your capital and your talent that is actually going to address the big challenges. 

Whether that’s housing, or congestion, or affordability, it can’t be government. We need to remove roadblocks, we need to enablers, but we are not the single source solution provider to these complicated issues. So, let’s work together, and we can build a future that we can be proud of.

[0:42:21.0] GD: Fantastic.

[0:42:21.7] BB: Thanks for having me.

[0:42:22.9] GD: Awesome. Yeah, we really appreciate it. 

[END OF INTERVIEW]

[0:42:27.7] GL: Thanks for tuning in to a special episode of Sync or Swim. We hope you found that conversation as engaging as we did, and a huge thanks to Brad Bradford and Gabriel Diamond for sharing their expertise and perspective with us. And, of course, thanks to you, the listeners and anyone who participated in any of the stops on the Rentsync Cross-Country User Road Show.

[0:42:47.2] ANNOUNCER: Thank you for tuning in to another episode of Sync or Swim, brought to you by Rentsync. If you enjoyed today’s show, make sure to visit www.rentsync.com/podcast for detailed show notes, key takeaways, and more. Thanks for listening. 

[END]