Some time has passed and we can all digest the implications of the new policy direction to change the basic zoning of the city. This will allow townhouse/rowhouse (seems interchangeable terminology here) typology basically everywhere in the developed residential areas (the inner city as it is known, where I work). I don’t see a massive amount of supply being added, given there are only so many building companies specializing in small scale townhouse construction. These are complex and costly endeavours, and I pity any new entrant into the business choosing a townhouse infill as his first project, unless he has a lengthy background in building, project management, and the mind numbing technicalities that arise and must be conquered, and loads of cash. The bigger companies already complain the smaller lot projects don’t necessarily work for them, simply because they need more scale than a handful of row houses to justify funding a team. Of course, you need a team to build anything more than one or two houses at a time, the company owner is perpetually caught in the middle of this scale conundrum. Simply put, starting a bunch of townhouse projects scattered throughout the city is really hard logistically, and would require eight figures of financial backing to do so. Not many new volunteers I would guess that would result in a massive amount of new supply beyond what is already earmarked for investment.
This brings us to the next point of commentary, the calibre of opposition raised to oppose the policy change to allow redevelopment, formerly prohibited, in the swath of RC1 and RC2 zoned areas that surround the city core. The arguments put forth often show a level of dissonance, to rationalize the opposition a person has to tie a knot with their tongue because the central argument means something different than what it purports to, you must interpret the coded language. Councillor Carra did a nice job of highlighting this, while challenging the anti-supply contingent to come up with better arguments. I didnt hear any great arguments against supply, but plenty of dissonance. Here are a few key themes observed.
Rowhousing will cause economic harm to existing property owners property value, Allowing RCG will enrich developers by driving up property value. All of this I think is misleading and argues that RCG zoning will make property value both lower and higher AT THE SAME TIME, which is impossible. The real argument made is single family home owners just dislike row housing, density, people and cars, and want to entrench their currently free amenities (empty streets, lots of space) using the authority of the city bylaw and planning department. If all areas have equal RCG potential, then that removes the current premium on land with current RCG, or easy to rezone to RGC status. There is currently a scarcity of RCG land, once the maps are changed, this artificial shortage is gone. Given the same size of building industry and its investment potential, the impact on land value will be low, because now every property has the same upside, whatever it is, of the RCG zone. We could see less competition among builders for land, this is overall a good thing for new housing affordability. Developers will not be enriched by land value increases, that benefit flows entirely to the land seller, the same people that oppose development also take the highest bid when it comes time for them to sell. All the scarcity driven, high land cost we see today does is make new supply more costly, which leads to the second point of dissonance, shown below.
The new RCG supply we see built today is already too expensive and damages low cost housing stock - The dissonance here is that, if you accept housing in Calgary is already too expensive (I do), then that means the current regulatory environment is not working to promote affordability, so should be changed. Allowing more supply of the least costly grade oriented supply option (rowhousing) surely cannot make the market work worse than it does now where the regulations restrict RCG supply to a very small land base. The public, when standing at the podium, fails to grasp this. Next, there is plenty of new RCG townhouse sales data, these units sell for much less than nearby semi detached, and far less than single detached new builds (by half or more). Simply put, the RCG product is the lowest cost new wood framed grade oriented building possible, this is not from greedy developers, the product cost is a reflection of its inputs, the commodities and labour are expensive today, and increasingly so. The next comment is demolishing of old single houses for rebuilding as rowhouses damages the affordable housing stock. Surficially, this makes some sense. The builders target the worst houses, because they can be economically demolished. This could lead to fewer overall low cost houses to rent. However, why are these houses so cheap to rent? They rent lower than the cost of holding them, because the houses are fully depreciated, maybe were purchased decades ago for a low price, and often have $100k deferred maintenance problems. These homes are rough enough that they can be unfit places to even live. Swapping one totally trashed house, for six townhouses is still a net benefit to five new households, this is forgotten by the public. Society needs to accommodate some people in poverty by giving them housing at far lower than its true cost, but the way to do it is not by curtailing supply of land for renewal, which drives up housing prices for the entire population. Are people really advocating for keeping the existing decayed housing stock as is to allow it further deteriorate?
The city needs to offer housing diversity rather than a blanket zoning approach - This comment exemplifies the flawed argument frequently heard. It means that by Council valuing diversity, it also must value the form of diversity of not allowing diversity. if this seems odd, it is just the typical dissonance of the public. The premise is blanket zoning is wrong, because to have diversity over the entire inner city, some areas must remain as single detached enclaves. This then contributes to diversity, because community A,B and C allow row housing, yet community X, does not. Community X only allows single housing, so it is a demonstration of overall diversity. Those promoting this are engaged in a doublespeak, they are saying their community is special and should remain as single detached only, because of character, and integrity of the design, and other arguments of why wealth enclaves are a good thing outweighs need for supply during a housing crisis. no solutions are offered other than token support for housing diversity, as long as it is somewhere else, far from their enclave. The problem is, given a chance to control development, many communities would outlaw any building except new single houses, the most expensive housing option. This is the system we largely have today, which is creating housing scarcity by choking supply, and the only new housing option is luxury product over $2 million.
Rcg zoning is a massive negative impact to the community, but also not going to supply enough to make a dent in housing problems, thus, should not be done because it is not a significant enough improvement. This argues that RCG will harm existing communities, due to the usual bogeyman, traffic, density, shade, etc. And it will not solve the housing crisis, and it isnt meaningful enough to add enough supply to solve the affordability problem. This argues that RCG is a major change but also a minor change, thus status quo is the correct course of action. The response to this is difficult. What can you say other than something cannot be both major and minor, concurrently. This type of respondent wants the city to annex more land and sprawl, and put massive apartment towers on park and ride lots near c trains. These are some terrible solutions to a housing crisis, but shows the capacity for creative problem solving among the general public. Best solutions presented involves ring fencing their valued Rc1 core areas, with all the density packed onto busy roads. The enclave residents then do not have to make any concessions inside the core area and can virtue signal about their progressive and unselfish approach to redevelopment.
The public is shy to attend the public hearing because they dont want to be publicly shamed - This was actually commented on by Councillor Chabot, his constituency was very opposed in private communication to him, but they did not want to speak publicly. Perhaps this is because their ideas are so terribly self serving, classist and nimby? The Councillor Chabot constituents must have truly awful arguments opposing new RCG housing supply if they are scared to debate their position in public or attach their names to the public record.
RCG zoning is a socialist style plot - This is a poor argument because RCG is a deregulation and red tape removal program to enable the market to function better. Again, how can this be socialist central planning when it is supported by the small business community that dominates this market segment. The opposite can also be argued, that the current system is heavy handed against individual property rights, anti competitive, uses bylaws to crush business development and poorly allocates supply of new product (sounds pretty socialist to me!). RCG is a massively pro-business policy, hardly a socialist plot by an NDP dominated Council. RCG is one of those broad spectrum policies that can unite both right and left in a common direction, rare today.
I think summarizing all of this it appears as typical Calgarian reaction to accelerating evolution of the city. A forecast of 200,000 plus per year population growth (2023) for Alberta was recently discussed in the media. New patterns and ideas on how to house an influx of people is needed, not just sprawl and detached homes, or Rc1 communities in decline with falling population within them during a crisis. We only saw 66 MLS listed new townhouse sales in 2023 reported by the realtors, this is tiny amount of new product coming to market for sale (lots of rentals were built though). The pendulum has truly swung in the other direction, this is the next generation - the millennials, exercising newfound power over its parents and the city it is inheriting. Will the opportunists among us adjust and take advantage of the changed marketplace? Will the city ever tackle the restricted covenant problem it has a major role in unwinding? Will the Province help with the financing hardships faced by home builders that is impacting new investment in supply? These are next on the to do list once the zoning issue is fixed.