Will “Upzoning” Work to Make Housing More Affordable?
Submitted by the Development and Transportation Committee
Mark April 22, 2024, on your calendar. This is the day City Council will start a Public Hearing where they propose “blanket rezoning”, probably Calgary’s most significant zoning change ever. If approved, all single-detached housing properties (currently zoned R-C1) could be redeveloped as townhouses (R-CG zoning). Potentially, the house next to you could be torn down and replaced with a four-unit townhouse with four additional secondary suites (eight housing units in total). Affected neighbours would not be able to oppose or appeal such a redevelopment if it complies with other bylaw requirements.
Housing purchase and rental costs have soared compared to the inflated costs of other necessities, while wages have not kept up. Many people struggle to make ends meet and housing is commonly their largest monthly expense. How did we arrive at this point? Clearly, some market-driven issues have increased demand, including population growth in Calgary. Added to this are increased borrowing and mortgage costs, higher costs of groceries, insurance, utilities, and so on. Renters have to compete to find a home, while potential buyers have to compete with investors, developers, and Short-Term Rentals, additionally reducing the affordable housing supply.
Is housing affordability solely a supply-and-demand issue, as some industrial and governmental voices suggest, or are other factors at play? Effectively, the voices supporting a market-only solution suggest that additional housing units of any kind, at any price point, will have a trickle-down effect, reducing prices and making housing more affordable. Such an approach is advocated by our Civic and Federal governments who have provided the housing industry with reductions in approval timelines and taxes without requiring the housing industry or rental property managers to achieve any housing affordability performance measures. The houses being built are not necessarily “affordable”.
While such housing demand and inflationary financial pressures are real, two questions should be asked:
1. Are single-family homes really the main problem such that “upzoning” and densification will make Calgary more affordable?
2. Is an increased supply of housing likely to make Calgary housing more affordable independent of the price of new housing units that become available?
To answer the first question, densification alone does not automatically equal affordability. Not everything trickles down into an “affordable” or lower sales price and rent. If we “just” needed to build more houses, there should be solid historical data that increasing housing supply drives down prices, even in the face of increasing demand, making housing more affordable for those with the greatest affordability needs. That doesn’t seem to be the case: individual townhouse unit prices are often about the sale price of the entire previous older house and property that was replaced.
As for increasing the supply of housing, yes, almost everyone agrees more housing needs to be built. However, blanket upzoning of existing R-C1 homes assumes that those are some of the only possible places to build more. Little heed is placed on all the other “brownfield” properties in the City that have been promoted as desirable building locations. For example, the new arena deal advocates for all the increased residential buildings that will be built in Victoria Park. Another example is the large Westgate LRT area which has been vacant for many years. The redevelopment at Northland Mall is a good example of higher-intensity use of existing lands. There are many areas of the city with empty or under-utilized lots, where building could start without first removing existing homes – homes that in many cases are the affordable or lower cost homes.
What if blanket upzoning actually serves to increase the price of houses in existing developed communities? Older houses that are cheaper to rent or buy (sometimes referred to as “NOAH” – Naturally Occurring Affordable Housing) are usually the first ones to be replaced by new and more expensive units, further decreasing affordability within any area. Potential community residents who want to buy a family home have to compete against developers to make a purchase. Developers seeking to build an eight-unit building have more leeway on what they can afford to pay for the property because they can divide the lot cost by multiple units. Speculation means that land values may go up in an area, not down. Developers make their money through building, so their best interests are served by building what is most profitable, and it is unlikely to be a low-cost affordable dwelling. Building larger, higher end units (with items such as granite countertops and expensive finishes) doesn’t help those seeking affordability.
R-CGs bring substantial other changes because they can cover 60% of a property (compared to 45% for R-C1): in most cases, mature trees are ripped out and there is little room to ever plant any new trees. Green spaces and vegetation should not be considered mere niceties, they are necessities! Shading and massing are also concerns because R-CGs can be three storeys tall. Given the many bungalows in Brentwood, the increased height difference can be quite jarring.
We urge you to inform yourself about this issue. Read and learn more. You can express your opinions either by attending and speaking at the Public Hearings on April 22, 2024, or by writing to the Mayor and City Councillors prior to the Hearings.
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