Building June July 2019

Urban Development / Architecture & Design / Innovation

PM#43096012

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building.ca June/July 2019 CDN $4.95

Ontario Rental Housing Beneficial Owner Register Missing Middle Typology

Developing for and with Indigenous Peoples

2019-06-07 2:10 PM

Composed

ÂŽ

Tall bathroom sink faucet with joystick handle

Timeless and deliberate, the Composed faucet embodies the beautifully understated elements of minimalist design.

By eliminating unnecessary details, the collection is designed to elicit an emotional response with its stark, refined beauty.

A striking complement to vessel sinks, this tall single-handle faucet features a top-mounted joystick to control water flow and temperature.

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FEATURES

Departments

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The Road to Right Improvements in Indigenous development are coming, but not without hurdles.

By John Lorinc

Who Are We Really Building This For? By changing how we look at the people in our target audience, we can build buildings that will make them happier and also make more money.

By David Allison

Lakeside Disruptor Move over, Toronto and Vancouver.

Look to the wilds of Muskoka, where Cayman Marshall has created Canada’s latest real estate hothouse.

By David Lasker

Welcome Home Ontario needs rental housing.

What’s stopping us?

By Tony Irwin

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Editor’s Notes Market Watch Legal Briefs Powers That Be Site Visit From the Bullpen

Building.CA explore Maison de la littérature Chevalier Morales Architectes designs a contemporary annex to the neo-Gothic heritage Wesley Temple in Québec City.

read Build It and They Will Come Forestry non-profit FPInnovations provides insights on the topic of wood-fibre insulation panels.

Building.ca

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Parcel delivery convenience for your residents Canada Post Parcel Lockers Everyone’s buying online these days. But many apartment and condo dwellers cannot receive parcels at home. Canada Post is installing Parcel Lockers in multi-unit buildings across the country. They are installed and fully maintained by Canada Post at no cost–and thousands have already been installed. We’ve always delivered mail to your residents. Now they can have their online purchases safely and conveniently delivered too!

Request a Parcel Locker canadapost.ca/LockerRequest

Un mode de livraison pratique pour vos résidants Armoires à colis de Postes Canada Tout le monde magasine en ligne aujourd’hui. Mais bien des résidants d’immeubles d’habitation et de copropriétés ne peuvent recevoir de colis à la maison. La solution? Les armoires à colis de Postes Canada. Des milliers de ces armoires, installées et entretenues gratuitement par Postes Canada, ont déjà été mises en place dans des immeubles à unités multiples partout au pays. Nous avons toujours livré du courrier à vos résidants. Et ils peuvent maintenant recevoir leurs colis de manière pratique et sécuritaire!

Commander une armoire à colis postescanada.ca/demandedarmoire

TM MC

Trademarks of Canada Post Corporation.

Marques de commerce de la Société canadienne des postes.

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Volume 69 No. 3

Editor in Chief Peter Sobchak Art Director Roy Gaiot Legal Editor Jeffrey W. Lem Contributors David Allison, Tony Irwin, David Lasker, John Lorinc, Shannon Moore, Ben Myers, Kevin Powers Customer Service / Production Laura Moffatt, 416 441 2085 x104 Press Releases pressroom@building.ca Circulation Manager circulation@building.ca Sales Manager Faria Ahmed, 416 441 2085 x106 fahmed@building.ca Vice President & Senior Publisher Steve Wilson, 416 441 2085 x105 swilson@building.ca President, iQ Business Media Inc. Alex Papanou Design Consultation BLVD Agency

Building magazine is published by iQ Business Media Inc. 101 Duncan Mill Road, Suite 302 Toronto, ON M3B 1Z3 (416) 441 2085 x104 info@building.ca www.building.ca SUBSCRIPTION RATE: Canada: 1 year, $30.95; 2 years, $52.95; 3 years, $64.95 (plus H.S.T.) U.S.A.: 1 year, $38.95 USD. Overseas: 1 year, $45.95 USD. BACK ISSUES: Back copies are available for $15 for delivery in Canada, $20 USD for delivery in U.S.A. and $30 USD overseas. Please send prepayment to Building, 101 Duncan Mill Road, Suite 302 Toronto, ON M3B 1Z3.

Subscription and back issues inquiries please call (416) 441 2085 x104, e-mail: circulation@building.ca or go to www.building.ca Please send changes of address to Circulation Department, Building magazine or e-mail to addresses@building.ca Building is indexed in the Canadian Magazine Index by Micromedia ProQuest Company, Toronto (www.micromedia. com) and National Archive Publishing Company, Ann Arbor, Michigan (www.napubco.com)

Building is published six times a year. Printed in Canada. The content of this p ­ ublication is the property of Building and cannot be reproduced without permission from the publisher.

Funded by the Government of Canada

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Group Think My friend David Allison has always been reliable for a comfort-rattling op-ed, but this outing struck a nerve with me. His topic is intriguing, but on my first pass I actually felt some very curious (subtext: potentially disturbing) deeper threads going on. When he talks about using “predictive insight” and algorithms and datasets to build “a building with people who cared about the same things,” I immediately began to free associate with a lot of what I’ve researched about the underlying infrastructure of social media. “Give the people what they want” is the bedrock of sales and an axiom as old as the hills, and it fuelled social media developers to go one step beyond and not only give people what they want, but give them more of what they want and only what they want. Predictive scoring algorithms lay bare our “wants” with shocking accuracy, and filter bubbles make sure we see only more of what we want, to great success: Facebook is one of the top five companies in the world by revenue.

But where does that lead us? Many argue social media has inflamed tribalism, where people only seek out those who already agree with them. Overlaying that to David’s thesis, I tabled a question: while it may boost sales rates and bottom lines for developers, from a city building perspective do we really want to program a built environment that functions in much the same way of narrowing fields of vision and creating echo chambers of reinforced belief, not through hearts and emojis and shares and comments, but residential developments of “shared values”?

In a nutshell, David’s response to my query was: we don’t have a choice. “I think that we are under siege by information and input, and on some level, our fight-or-flight response is being triggered. We can’t possibly cope,” he said in our thoughtful email discussion thread. “Back in the day when we had the luxury of sifting through the world (or even just the Sunday New York Times) and seeing what might come along, our preInternet brains could sort for us. But now, how could we possibly stay open to what the

Peter Sobchak Editor in Chief

world might offer? If we must tribalize (which I think is inevitable) I hope our core human values are the sorting mechanism through which we do this. My data backs up the theory that if we organize our tribes around shared values, we can hope that the place we are headed might be a more humane version of the world.

“I’m encouraged by the enormous upsurge of activity around humanistic design, values -based strategies, and research into alternative forms of segmentation. The end goal of my drive to build the world’s first statistically accurate dataset of what we all care about is to give [that] data to global organizations working to make things better. For example, the Institute of Electrical and Electronics Engineers is working on global standards for A.I. and machine learning and they asked if they can have my dataset to include in those standards so that those technologies are referencing what we care about and what our values are as they make decisions independently without human oversight. Of course I will say yes. I’d be Doctor Evil if I didn’t!

“Full circle: you are correct. It’s sad that my pal Marshall’s Global Village is breaking up into neighbourhoods. But I think it is inevitable. So let’s make them into the best neighborhoods we can.” Agreed.

Building.ca

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market watch Spotlight: Hotel Investment

one or more overnight stays

Canada (east of Manitoba). Ontario was the most active province with 42 transactions and $612 million in volume. Québec saw a tripling of sales year on year to $303 million.

“We’re seeing a trend towards limited service hotels, representing the lion’s share with 70 per cent of deals this year, over more traditional full-service hotels. Investors are also showing heightened interest in secondary and tertiary markets like KitchenerWaterloo, Québec City, Windsor, Sudbury, and Kelowna, which are now providing superior returns compared to the traditionally strong markets in Vancouver and Toronto,” added Pirani.

Growth in Visitation The lodging sector benefitted from new records in international tourist arrivals in 2018, hitting 31.2 million in overnight trips. This contributed to robust revenue per available room (RevPAR) growth of 5.3 per cent and strong capitalization rates year on year, averaging 7.3 per cent. In addition, new supply increased by 1.4 per cent in 17 major Canadian markets, up from one per cent and 0.3 per cent in 2016 and 2017 respectively.

As reported in Colliers’ Q1 INNvestment Canada report, Canada hit a multi-decade

2.5 China

2.0

other asian

1.5 1.0 0.5

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2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

0

Source: Statistics Canada

Asian inbound travel market to Canada

Record operating metrics, a low Canadian dollar, financing costs at historical lows and active construction pipelines advancing across the country are driving a positive outlook for Canada’s hotel industry, according to Colliers International’s 2019 Canadian Hotel Investment Report. Transaction volume for Canadian hotel real estate was $1.5 billion in 2018, the eighth highest over the past 30 years. Investors are now spreading a wider net, expanding efforts from top-tier cities to secondary and tertiary markets across the country.

“We’re currently in one of the most profitable periods for hotel owners in the last 30 years,” says Alam Pirani, executive managing director of Colliers International Hotels. “Eight years into the current cycle, the Canadian hotel industry remains in an enviable position and continues to entice interest from investors. We are averaging over $2 billion per year during this cycle and we are now in an environment that sustains more than $1 billion in annual transaction volumes.”

Western Canada experienced a 30 per cent rise in the number of deals from 2017.

However, uncertainty in energy markets and limited available product continue to impact transaction volume. 64 per cent of national transaction volume took place in Eastern

millions

Resilient market drives hotel investment strength

June/July 2019

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low in 2009 for inbound international tourists with 15.7 million overnight stays. 10 years later, confluences of factors have assembled into a sustained rebound with 5.4 million additional overnight arrivals through the end of 2018, which hit a new record of 21.1 million. By market, the United States has contributed 2.8 million of the additional stays with a compound annual growth rate (CAGR) of 2.2 per cent, versus other international markets at 2.6 million (CAGR of 5.1 per cent).

The Canadian dollar, sustained international marketing, and growth of critical infrastructure in major cities are expected to continue inducing cross-border travel. The United Kingdom has held the top position contributing approximately 814,000 tourists last year, with India and Mexico among the top origins by growth rate with 10-year CAGRs of 10.3 per cent and 9.2 per cent, respectively. However China’s CAGR of 16.4 per cent over the past decade is by far the quickest growing market.

Since the introduction of Approved Destination Status (ADS) in early 2010, China has hit a new record for overnight stays in Canada every year since 2003, averaging approximately 60,000 net new tourists annually. According to averaging data published

by Destination Canada, new routes from several Chinese cities to Canada have facilitated the increase of tourists with direct air seat capacity growing by nearly 17.8 per cent over the 2015-2018 period. This influx has been a key factor to accommodate the approximate 600,000 arrivals over the past decade. In a study published by McKinsey

There’s been no shortage of domestic capital propelling the market. & Company, estimated outbound trips should continue to grow by an average of 6.5 per cent per year through 2020.

The report suggests that the low levels of the Canadian dollar will continue to provide an important catalyst for additional cross-border travel demand. Canada’s tourism marketing initiatives remain a critical component to capturing growing overnight tourism from first-time travellers markets such as China, India, and Mexico. The longer length of stay and overall expenditures present a lucrative opportunity for the lodging sector.

Strong Numbers Ahead Looking ahead, Canada’s low Canadian dollar is expected to elevate levels of international and domestic tourism, painting a positive picture for the 2019 hotel industry.

Colliers is predicting a surge in hotel development with national new supply growth expecting to crest two per cent this year, up from a one per cent per year average. RevPAR is also expected to increase five per cent in 2019.

2018 Buyer-Seller Split

Already, approximately $226 million of hotel transactions occurred across Canada in the first quarter of 2019 with 29 deals reported. The pace of market activity remained below the $350 million recorded in Q1 2018, while average price per room metrics remained stable year-over-year at $81,700.

90 per cent of hotel transactions by number of deals were limited-service properties in secondary and tertiary markets.

Colliers expects another $1.5 to $2 billion in transaction volume this year, fuelled by an up-tick of large single asset and portfolio deals driven by domestic capital. While in recent years foreign investment has driven transaction volume to reach highs of $4.1 billion in 2016, today’s asset mix is more appealing to Canadian investors. “Domestic investment is a core area of strength in Canada,” says Pirani. “There’s been no shortage of domestic capital propelling the market during the past eight years and, in fact, it has driven two thirds of hotel transaction volumes since 2011. Expect this trend to continue into 2019.”

2018 Sales Volume & Deals

Source: Colliers International Hotels

buyer 34%

32%

131 deals 26%

4% 3%

— $10M 3%

$25M$50M

seller 38%

35%

$50M+

$10M - $25M

11%

10% 5%

— $10M

$10M - $25M

$25M$50M

$50M+

$1.5B sales vol .

Private Investor

Hotel Investment Co.

Real Estate Co.

Institutional & Other

Public Co.

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legal Briefs Not So Beneficial

British Columbia’s beneficial ownership register may be the wrong solution for a questionable problem.

By Megan J. Lem

Megan J. Lem is a corporate lawyer in the New York office of Kirkland & Ellis LLP. This article reflects the personal view of the author alone.

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You would have to be living under a rock all of this time if you have not yet heard that Canada is apparently the money laundering capital of the universe and that Canadian real estate is the asset class of choice for currency criminals. Moreover, this alleged massive influx of real estate capital can be curbed and eliminated if the government would just build a “beneficial ownership register” to record the names of all of these evil cash crooks.

This would be a more amusing storyline except that the storyline seems to be genuinely gaining traction with politicians of all stripes across the country. The problem is that the world is much more complex than such transparency conspiracy theorists would have us believe and building a beneficial ownership register will not address money laundering and will, instead, cause problems for the real estate development industry.

First of all, it is unlikely that anybody is really alleging that the real estate industry is a hotbed of “money laundering.” Put simply, true “money laundering” is the process of mixing illicit proceeds of crime with legitimate business revenues in cash businesses. Anyone in the real estate industry knows that the business, end-to-end from land assembly to unit sales, is anything but a cash business, with ever dollar meticulously documented. No, there is no “money laundering” in the real estate business.

What would not surprise anyone, however, is that there may be some proceeds of crime invested in Canadian real estate. Why wouldn’t there be? Crooks are likely to redeploy capital in asset classes that make sense and real estate holdings have always made sense as a part of any rational portfolio.

This is not surprising. Of course, the exact dollar amount of the proceeds of crime invested in the Canadian economy is impossible to determine with any precision. Experts guesstimate the amount at upwards of five

per cent of GDP, but how much of this is invested in real estate is all but impossible to determine. After all, it’s not like the criminals (and their front men) will openly declare their criminal status when acquiring real estate.

Therein lies the rub. Nobody can estimate the amount of criminal proceeds invested in Canadian real estate because it is impossible to know if any given real estate owners are criminals (or fronting for criminals). The transparency conspiracy theorists would have us believe that, if we only built a beneficial ownership registry (and passed laws to require all real estate owners to register the names of the “true ultimate owners”), then anyone (including shell companies) that “front” real estate for criminals in Canada will now suddenly disclose which criminals they work for, and we could then quickly clampdown on such criminal. It is almost like suggesting that we should build a public drug dealer register so that the drug dealers will rush forth and register their true names so we can finally win the war on drugs.

One would think that the absurdity of the proposition would be self-evident, except for the fact that this is already actually happening. British Columbia has already passed legislation implementing a beneficial ownership register for real estate. Furthermore, politicians in other provinces (most notably, Ontario) are now considering doing likewise.

Now, real estate development stakeholders might feel that this is nothing more than yet another layer of bureaucratic oversight (and an ineffective one at that), but that would be naïve. While the additional bureaucratic burden on the industry is a given, the worst case scenario for the real estate development industry is far more than just additional regulatory burden. Instead, it might fundamentally alter how the industry acquires land in the province.

One of the things that developers in British Columbia will find out soon is that land assem­-

June/July 2019

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No, there is no “money laundering” in the real estate business.

bly is going to become far more difficult (if not impossible) in the face of a public register of beneficial owners. Typically, one assembles a greenfield project by acquiring adjoining lands through various numbered companies or lawyers. Imagine trying to assemble various adjacent properties when you are obliged to disclose, on a public register searchable by anyone, who the true ultimate beneficial owner of each parcel is.

The first buy will be easy, but once the neighbours realize (by searching the public

register) who is buying up lands in the area, well, the gig is probably up for almost all subsequent purchases. After all, the beneficial ownership register doesn’t just require criminals to declare beneficial ownership; it requires every registered owner to disclose whom he/she/it might be ultimately holding in trust for.

The irony is that the government already collects much of this information. Currently in Ontario, transfers of beneficial interests already attract land transfer tax and the cor­-

responding obligation to disclose true beneficial ownership to the Ministry of Finance, and Ontario now imposes a Non-Resident Speculation Tax which requires similar beneficial ownership disclosures as well for certain types of real estate. It is very unlikely that the criminals who own real estate in Ontario have disclosed their real names under these existing reporting regimes, and it is unlikely that making the same information searchable in a public register would in any way enhance disclosure and compliance.

Furthermore, for the non-criminals who will in fact honestly comply with such legislation, having true beneficial ownership available through a public register will cripple the development industry’s ability to assemble greenfield projects in the usual manner.

It is probably too late for British Columbia, which has already passed the enabling legislation and is busy building a beneficial ownership register. Let’s just hope that Ontario sees the light before it too goes down a rabbit hole that has no apparent exit.

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powers that be Even Silver Bullets Backfire All too often objective evidence fuels rather than calms the fire of debate.

By Kevin Powers

Kevin Powers is managing principal of Project Advocacy Inc., a subsidiary of Campbell Strategies, and is focused on helping project developers facing public and government opposition.

Find him at www.projectadvocacy.ca or email him at kevin.powers@ projectadvocacy.ca

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Perched on a hill in rural Ontario, a proposed advanced manufacturing site overlooked a handful of farmhouses whose residents were laying siege to the project.

The developer had done almost everything they could think to keep the peace. The facility would blend in to the local topography; it would employ local trades; it would be sustainable; it would be LEED certified; no emissions; no odour. But to no avail.

It was water that separated the two sides.

The facility was water-intensive and would use tens of thousands of gallons a day. The earliest media coverage had suggested that it might have an impact on local water levels, and the neighbours living on wells in the same aquifer were up in arms.

No amount of information could change their minds. Not the fact that the company would be recycling 95 per cent of that water, or that fact that the nearby farms regularly used five times as much water. What’s worse, what the company thought was a silver bullet turned out to be a blank. A recently completed water study definitively showed the project would use less fresh water than five single family homes. But nobody down the hill believed it. Residents instead had glommed on to wording in the report that stated the project was “unlikely” to cause any changes to well levels in the area. To the scientists behind the report — schooled to never say “never” — this meant improbable; to the residents it meant “possible.” But the problem at hand was bigger than different interpretations of “unlikely.”

The developer was facing what political scientists term the “backfire effect,” coined to describe the way that even when given evidence that contradicts what they believe, people will maintain their beliefs and become even more convinced of them.

Information that does not support their beliefs is dismissed, and they claim even greater confidence that they have been correct all along. They may dismiss data as statistical noise, and take even more extreme positions on issues than was initially the case.

In this case, the residents had examined the water study and saw what they expected to see, concluded what they expected to conclude, and then dug in their heels. All too often objective evidence fuels rather than calms the fire of the debate. The problem is that when faced with concerns, the default strategy for developers and politicians alike is to double down with more facts. But the brain is wired to reject those facts if they are contrary to existing beliefs, even if those beliefs are unfounded.

Thankfully, experience with the backfire effect shows a way out of this quagmire.

The key is to move the dialogue away from the facts and towards a demonstration of common values. This is because without an understanding that the two parties share a common set of values, it’s nearly impossible to establish trust. And without trust, facts might as well be opinions.

In the case of the site on the hill, they had made the mistake of letting the facts speak for themselves. They had designed the building with utmost concern for the neighbours, from its location to its environmental footprint. And they had released the water study, again, with the neighbours in mind. They had presented all of this information to council. Everyone had read about it in the media. But the company had never actually sat down one-on-one with the neighbours to get to know one another.

And in this case, that was all it took to turn things around.

Over the course of two weeks, the company’s president personally visited every house down the hill. He talked about his childhood in a community very much like theirs. He talked about the company’s plans to raise money for the local hospital. And he listened to their concerns. Company reps started showing up at local events, and even walked in the Labour Day parade. In short, they started acting like a neighbour, rather than an invading army. To their surprise, within a few short weeks, the water issue became water under the bridge, and they got their permits to build in the community.

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The Road to Right

IMPROVEMENTS in Indigenous development are coming, but not without hur dles.

By John Lorinc

Building.ca

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The Cree Nation of Eastmain, a remote fly-in settlement on the eastern shore of James Bay, may seem at first glance to be an unlikely candidate for one of the Federal government’s Smart City grants.

Despite the odds, the members of the tiny community pulled together an ambitious plan to develop or refurbish ultra-efficient residential buildings, all of which reflect the outcome of an intensive consultation and prototyping process that has played out in Eastmain over the past two years.

Eastmain, with a population of approximately 800 people, has about 250 dwellings, which is 50 short of what is required to accommodate future growth. The community serves as one of the Cree Nation’s hubs, with government offices, medical facilities, a hotel, radio station and the headquarters of the Cree Regional Trappers network.

The Smart City housing plan, submitted in the $5-million grant category, calls for the creation of new affordable housing by reducing energy costs, improving performance and finding more efficient and sustainable ways of constructing new structures, says architect Bill Semple, the consultant who worked on the proposal with members of the band council and the community. “We’re going from standard 2x6 beams, R40 insulation and fiberglass batting to net zero buildings,” says Semple, a former CMHC official and a member of the Indigenous Task Force of the Royal Architectural Institute of Canada (RAIC).

He stresses that the proposal reflects a sustained engagement effort that began with a canvas of the community’s elders and ultimately resulted in “culturally sustainable” design elements. The five proposed six-plex apartments evoke a long house structure and feature communal spaces as well as areas set aside for older residents. They are also oriented along an east-west axis, to reflect the movement

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of the sun. Five proposed single-family dwellings will have similar features. “The cultural sustainability is huge because all the members of the community are going through the healing process which is trying to address the legacy of colonialism and residential schools,” says Semple, who notes that most reserve housing in Canada’s north has failed to reflect Indigenous concepts of space.

Beyond the architectural particulars, Eastmain’s plan also pivots on a focused skilled trades training program that will enable Eastmain residents to construct these structures as well as fit them out with the specialized HVAC equipment, solar panels and smart sensors that will deliver the net-zero energy performance.

While Eastman was selected as a finalist in the Smart City competition, it didn’t win.

But Semple says the community is now actively looking to secure long-term funding to replace the $5 million it hoped to secure through the competition. Some funds have

been earmarked, however. Construction on the first of the proposed structures, an accessible home, will begin this summer, with the second phase proposed for 2020.

Long-standing Deficiencies In some ways, Eastmain’s story reflects the long-standing frustrations that the residents of many northern Indigenous communities have faced in their attempts to confront profoundly substandard and inappropriate housing. Yet it also reveals an important and perhaps historic shift that’s taking place in many locales across Canada, from the most isolated communities in the north to some of the most urbanized spots in the urban south.

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Due to a confluence of factors, many but not all of which trace back to the 94 calls to action in the 2015 Truth and Reconciliation Commission report (TRC), there appears to be a surge of interest in Indigenous design and planning approaches, a shift that some practitioners also attribute to the 2015 establishment of the RAIC’s Indigenous Task Force.

Its members provide informal advice on incorporating Indigenous design approaches to a range of projects. “We’re finding that governments, universities, developers and construction companies are going to the RAIC website and phone us,” says Patrick Stewart, who chairs the 16-person group and practices in Chilliwack, B.C. He also points to a recent vote by the members of the Architectural Institute of B.C. to adopt several motions calling on the profession to address the TRC, making it the first provincial body to take that step. “We have a growing momentum and there are a lot of things we get involved in.”

Besides the housing, school and culture/ community centre projects that have long been developed by First Nations communities, much of the most recent investment has flowed from government agencies and post-secondary institutions seeking to “Indigenize” campus spaces and create amenities for Indigenous students and faculty in response to the TRC’s various recommendations aimed at the justice and education systems. The symbolic capstone of this wave is Unceded: Voices of the Land, Canada’s first ever Indigenous submission to the Venice Architecture Biennale. The project was created for the 2018 event by Douglas Cardinal and co-curated by artist Gerald McMaster and Laurentian University’s recently appointed architecture faculty director David Fortin, who describes the multi-media undertaking as a “challenge to conventional notions of spatial understanding.”

the mainstream is coming closer to how we saw the world for 30,000 years.

Beyond such marquis commissions, Indige­ nous architects point to a growing number of examples of non-Indigenous development projects that consciously embody Indigenous design (e.g., non-linear or circular meeting spaces, extensive use of wood, and symbolic details) or reflect the low-emission principles that have become increasingly commonplace as climate change concerns crest.

“It seems to me that the mainstream is coming closer to how we saw the world for 30,000 years,” comments Brian Porter, principal of Two Row Architect, based in Six Nations of the Grand River. He cites KPMB’s Manitoba Hydro Place project in downtown Winnipeg, an office tower that features vertical shafts for ventilation and heat rise. Porter says his firm is now in negotiation with a

Opposite page In its Smart City Plan proposal, the Cree Nation of Eastmain pledged to construct quality, energy-efficient homes that are affordable for its members, including an inventory of single-family homes, an Accessible House and Multi-Client Six-Plexes.

Above Unceded: Voices of the Land was Canada’s official entry to the 2018 Venice Architecture Biennale. It featured the work of 18 Indigenous architects and designers through multi-media installations.

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Commissions Making Change Universities and college administrators, especially those serving significant cohorts of Indigenous students, have been among the most active clients in commissioning new projects for campuses in recent years. Brook says his firm’s Indigenous Design Studio has worked on undertakings for several, including Mohawk College, Algonquin College and Humber College, as well as the universities of Toronto, Winnipeg and Manitoba. Some are place-making installations, such as outdoor gathering spaces featuring structural elements, seating and landscaping. Others involve details as commonplace as signage: at Laurentian, where a tenth of the students are Indigenous, campus way-finding is now trilingual.

“A visual identity is what those projects are about,” says Brook, noting that many of these commissions tend to be relatively inexpensive, are often funded by donors, and, in the case of purpose-built spaces, prove to be highly popular for a range of uses.

Porter cites one of his firm’s recent campus commissions: an Indigenous student services space at Seneca College, called Odeyto, and designed in partnership with Gow Hastings.

Meant to serve as a “home away from home,” the $2.8 million facility, which opened last year, repurposed an 1,800-sq.-ft former classroom space into a cluster of offices and com-

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Tom Arban Photography

Toronto-area residential developer about creating a subdivision that includes more communal spaces and renewable energy features.

“Mainstream consumers will be ready to try a different model,” he predicts. “There’s a focus on sustainability and aligning [design] with natural forces instead of the focus on commanding the land.”

Calvin Brook, principal of Brook McIlroy, adds that some high profile corporate clients are also looking to incorporate Indigenous design elements to “start the process of truth and reconciliation.” He cites Ivanhoe Cam­ bridge’s new CIBC Square project, a soaring tower that will straddle a railway embankment in the heart of Toronto’s financial core. Its corporate boardroom reflects Indigenous design principles and materials, and has been stewarded by Brook McIlroy’s six-person Indigenous Design Studio team, which is led by Ryan Gorrie, a Winnipeg-based architect. “It’s obviously not enough, but it is helpful to have spaces where cultural training can happen.”

puter labs, as well as a kitchen and dedicated areas for Indigenous elders. As with many such ventures, this project embodied the outcome of intensive consultations with those who will use the spaces, as well as community elders.

One of the findings, Porter explains, is that college can be seen, symbolically, as a stop on life’s journey, or “odeyto” in Anishinaabe.

The designers sought to express that insight by outfitting the exterior of the space with a structure meant to evoke a canoe tipped on its side. The interior features 28 curved wooden ribs, an evocation of both the canoe’s structure as well as the number of days in the lunar calendar. It is aligned along an east-west axis to acknowledge the movement of the sun, with red doors at either end to remind visitors of the legacy of missing and murdered Indigenous women and girls. An exterior cladding in variegated corrugated metal reflects the process in Indigenous design of taking something inexpensive and commonplace and adding value to it.

Other commissions are as much about Indigenous-inflected consultation processes as specific design elements. Porter mentions other campus projects – at Ryerson University and

Above Conceptually, the addition and renovation of Odeyto was inspired by the image of a canoe pulling up to a dock, similar to students making a stop at Seneca College to gather knowledge before continuing on life’s journey.

Ontario Institute for Studies in Education – that aim to humanize some of the Brutalist structures that sprang up on campuses through the 1960s. One involves opening up a corner of Ryerson’s library. Part of the design process involved Two Row setting up a booth on one of the campus’s thoroughfares to solicit student feedback, with 1,200 response cards helping inform Porter’s goal of bringing light into a forbidding and fortress-like space. “One of the ideas we’ve tried to bring is that architecture shouldn’t be anonymous,” he says.

It’s important to note, of course, that these kinds of projects, because they involve large public institutions in large population centres with the infrastructure required for complex

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Bob Gundu

development projects, still represent the low-hanging fruit of Indigenous-focused design and development, including the sort of net zero or low-carbon projects that many municipalities now encourage.

Some impediments are subtle. For example, LEED or other sustainability standards reward urbanized amenities, such as the presence of bicycle racks, but fall silent when it comes to developments that aspire to generate local economic development, engage elders, or foster capacity building, as is the case with remote Indigenous projects. In other cases, says Eladia Smoke, a principal at Smoke Architecture, communities using Federal funds for projects may want to incorporate local materials, especially timber, in projects. The catch-22 is that those supplies, because they aren’t always certified as sustainable, don’t pass muster with the National Building Code.

“It means you can’t source locally,” she says.

For more remote communities looking to replace substandard housing, the absence of construction and skills infrastructure remains a huge obstacle, says Kim Walton, principal at Bow Crow Design, in the foothills community of Sundre, Alta. Rather than one-offs or pre-assembled dwellings hauled in by trailer at great expense, she says it would be far more effective to transport basic building materials to modest workshop/warehouses situated in remote communities. There, they could be assembled into pre-assembled components that can be stored in dry locations to prevent moisture infiltration at the front end of the construction process. Walton points to one facility, in Invermere, a community near the Alberta-B.C. border which has a workshop space with basic tools for sawing and blowing insulation. “Setting up that 40 by 60-foot shop isn’t a big deal,” she says.

“That’s the missing piece.”

In Eastmain, this kind of facility was a key piece of the housing and capacity-building proposal submitted to the Smart City challenge. It will almost certainly continue to figure in the community’s bid to secure new sources of funding from other sources.

Bill Semple says that despite Eastmain’s limited resources, its residents remain determined to realize on the grassroots vision and design process that culminated with its ambitious application to Federal officials. “The community is still very much behind the project,” he says. “They want to move ahead.”

Laurentian’s Indigenized Architecture Faculty Founded in 2013, Laurentian University’s McEwen School of Architecture is not only the newest design faculty in Canada, it is also the first to have Indigenous design principles baked right into its professional DNA. The decision flowed organically from the Sudbury institution’s commitment to providing a tri-cultural educational environment to its predominantly northern Ontario student body. “Because of Laurentian’s mandate, it was obvious we would create a program that would fill that hole in Canada’s curriculum,” says director David Fortin, an associate professor at McEwen and a member of the Metis First Nation in Ontario.

At the most practical level, the McEwen faculty is aiming to create a cohort of architects attuned to working in Canada’s northern cities and communities. Yet Fortin points out that the 330 students

— undergraduates and graduates, as well as about 15 who self-identify as Indigenous — aren’t just taught about the aesthetics of Indigenous architecture and design. Rather, McEwen’s approach is to weave Indigeniety into every course, with a particular emphasis on practice issues such as decolonizing the planning process, forging deeper collaborative connections between communities and architecture and observing the principle of reciprocity. “When that happens, design can be a path to reconciliation,” Fortin says.

“The community has to be involved.”

These approaches, which have been adopted in a growing number of architecture schools in the past five years or so, present an important challenge to the conventional professional expectations of what designers can draw from community consultations. “It’s a slower process,” he notes.

“Because of the cultural translation that has to happen, you can’t simply arrive in the community and get what you need from a one or two hour meeting. The value system is complex.” The end result, however, is design more thoroughly aligned to the principles and values of the members of the community in which new buildings land.

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Who Are We Really Building This For? By changing how we look at the people in our target audience, we c an build buildings that will m ake them happier and also m ak e mor e money. By David Allison

I spent more than a decade as the founder

and president of a marketing, creative and strategy firm that specialized in real estate development. We helped create brands and campaigns for residential, commercial and recreational projects all over North America and beyond. It’s been almost four years since I sold the firm, and while the rate of change in the industry has been aggressive, at least one aspect of the business remains the same.

Ironically, it’s perhaps the most flawed component of the process.

It always started the same way. When I sat in those boardrooms for all those years, there was always someone full of certainty about who was going to show up and buy or rent the suites and therefore how the building or community in question should be designed and built. They often expressed their ideas about the target audience in the form of a demographic description, occasionally going as far as writing up the profile of a typical prospect.

You know the document I’m talking about.

It would include things like “Sally and Bob are Baby Boomers who are looking to start a new life in an urban and walkable neighbourhood. They had three kids who have all left home now, and want a two-bedroom floorplan so that the kids will have a place to stay if they come to visit. They both drive upscale vehicles, and Sally wants the spare

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bedroom as a place to keep her scrapbooking supplies when it’s not being used for overnight guests.” It would carry on from there, telling a nice story about this typical couple who were going to snap up all the homes.

But the most peculiar thing kept happening.

Years later, after the building had sold or the suites had been rented, we’d look around and see who had actually decided to live there.

And while there may have been an occasional ‘Bob and Sally’ they were only there by chance. The building had sold to all kinds of people who most often had no apparent demographic similarity to each other at all. An entirely different audience had ended up buying than the one that had been targeted. Looked at another way, an entire building or community had been built for people who never showed up. It happened over and over again, but we all more or less shrugged it off, because after all, the building had been a success and it was fully sold or rented. So what did it matter?

And we’d all go off and repeat the process on some other building somewhere else.

What if the people we thought were coming had actually shown up?

What if there had been accurate predictive insight behind the target audience profile, instead of well-meant guesswork and opinions about Sally and Bob? Not only would

the risk of every decision about the design and marketing of the building been minimized, but we’d have been confident and bold. We’d have created more specialized product that the occupants truly loved. In turn that love would have rubbed off on the development company brand, making every project that followed easier to sell or rent.

How can we make this happen? Sociology is the science of understanding the behaviour of groups of people, and if our goal is to more successfully predict the behaviour of target audiences, we need science on our side.

Ask any first-year sociology student what makes people decide to do things and you will get the same answer: what we value determines what we do. If you value family more than anything else, you will consciously or subconsciously make every decision based on how that decision will impact your family. If we could detect what people care about more than anything else — read: the values of a target audience for a development project — we could predict their behaviour.

There has been a major obstacle to doing this. In order to accurately profile the shared values of an entire target audience, we’d need an enormous amount of data about values from all kinds of people. Until recently, data collection technologies that allowed for a complex dataset like that didn’t exist.

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Algorithms to the rescue Thanks to algorithmic data collection and analysis techniques we can now amass enormous datasets that were previously unimaginable. For the last three years, working with a university research team, we’ve assembled 100,000 surveys in a format that statisticians refer to as a “random stratified statistically representative sample.” Simply put, it is a miniature replica of the real world, with the same proportionate number of people of all ages, incomes, education levels, marital

Roy Gaiot

Data collection in the real estate sector has always been about two things: first, we are really good at analyzing past sales of similar projects, or past purchasers from a sales database. That’s a great way of finding out how people behaved yesterday, but not a great way to predict how they will behave in the future. Second, we occasionally send out surveys by email or have a few focus groups with people who match the “Sally and Bob” demographic description. But those methods mean developers are placing multi-million-dollar bets based on the opinions of a handful of people who might share similar birthdays or income brackets. Or people who bought real estate before. It doesn’t help us detect the values of the people who will buy today, and understand how they will behave.

status, geographic locations, and so on. The dataset contains 380 metrics about 40 core human values, and which values are most important to which people, and why. The data is +/- 3.5 per cent accurate with a 95 per cent level of confidence.

To start with, we found two fascinating things. First, we discovered proof that demographic profiles are not effective. Across all those surveys, Baby Boomers disagree on everything 87 per cent of the time, and Millennials disagree 85 per cent of the time.

How can we make decisions about targeting groups of people who disagree so wildly?

Those numbers indicate that for every dollar or hour you spend targeting Boomers or Millennials you will have about a 13 to 15 per cent chance of triggering a shared value, and therefore influencing behaviour. On further examination of the data, using any traditional demographic segment, you are going to get those same dismal results.

We now have proof that demographics, and the stereotypes attached to them, are only negligibly effective. Don’t get me wrong, we still need to define our target audiences using demographics. 18-year olds are not going to buy $3-million penthouses, after all. But using demographic stereotypes about those penthouse buyers to determine what they want, how to motivate them, and how they will behave? The stats show just how dangerous that can be.

Second, we verified that the sociologists were right: values are an extremely powerful way to profile and predict the behaviour of a target audience. Values-based groups agree with each other across all those 100,000 surveys and 380 metrics as much as 89 per cent of the time. That’s a factor of seven or eight times more agreement, more similarity, more predictability for a target audience than demographic profiles provide.

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What did we learn about real estate developments? The data was unmistakably clear on this point: no one wants to live in a building full of people who match their demographics.

Across all ages and incomes, everyone agreed that monoculture buildings or communities full of people who were demographically the same sounded like an undesirable place to live. But the real shocker was that everyone also agreed that they’d pay more — as much as 15 per cent more, on average — to live in a building with people who cared about the same things, regardless of how much they resembled each other from a demographic point of view.

Let’s combine some of these ideas.

If we profile a target audience using shared values we can more easily and boldly design and market homes that people will flock to, and love, and only leave reluctantly. Then if we do that work properly, and build homes that reflect the values of our target audience, they will pay more than market value to rent or own there. We will need to make it obvious that their values have been considered, and

How can we make decisions about targeting groups of people who disagree so wildly? clear that they will be living in a vertical village filled with people who are there for the same reasons.

So it turns out the old saying is true. Birds of a feather do flock together. But not because of how old they are, or how much they resemble each other on the outside. It’s what’s inside that counts.

WHERE ENGINEERING LEADERS ARE MADE.

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David Allison is a best-selling author and consumer behaviour researcher. He speaks internationally about his Valuegraphics Database that can detect what a target audience wants, and what messages will motivate them most. His latest book, We Are All The Same Age Now, was chosen by INC Magazine as one of the top leadership books of the year.

Visit www.Valuegraphics.com for more.

Discover the UBC Master of Engineering Leadership in High Performance Buildings.

Get the business management, leadership and specialized engineering technical skills you need to progress in your career.

Take the next step and advance your skills with a comprehensive 12-month professional master’s degree at one of the world’s top 40 universities. mel.ubc.ca/architect

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Lakeside Disruptor

Andre Carriere

Move over, Toronto and Vancouver.

Look to the wilds of Muskoka, where Cayman Marshall has created Canada’s latest real estate Hothouse. By David Lasker

This is a business -story twofer, with

two new disruptive business models incubated by an innovative real estate firm not, as one would expect, in the hothouse markets of Toronto or Vancouver, but in the wilds of Ontario’s cottage country.

Cayman Marshall International Realty, with offices in Huntsville, Port Carling and, since 2017, in Toronto, sells luxury real estate using a counterintuitive method. Company

president and founder Todd Adair, seeing an underserved market niche in Muskoka, is also the designer and developer of speculative turnkey modern high-end houses priced from $5 million to $15 million.

His firm is on a roll, having won the 2017/2018 Best Real Estate Agency Canada prize, awarded by London, England-based International Property Awards. Last September, Canadian Business and Maclean’s put Cayman Marshall

at No. 251 on their 30th annual Growth 500, which ranks Canada’s fastest-growing companies based on five-year revenue growth.

Since opening in 2012, the firm has consistently doubled yearly sales. This past Christmas, it hit $1 billion in cumulative sales.

What is most remarkable, perhaps, is that Cayman Marshall, with only seven sales agents, is dwarfed by its brokerage competitors, some of whom have over 100 agents in

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Data-mining Cottage Country Although born in Cochrane, Adair grew up in Muskoka, acquiring a love for and knowledge of the region. While studying economics at Ottawa’s Carleton University, he opened a small information-technology business, the first of many he would buy, start or sell during the next 20 years. After three years at Carleton, he worked as a business consultant for financial-services giants Macquarie Group and Arthur Andersen, then became a software developer, creating proprietary programs that he sold to U.S. realtors to generate leads. He subsequently adapted it for Cayman Marshall’s exclusive use in Canada.

With it, he was able to build a database of high-net-worth clients and prospects.

“I started this business with only my technology and no listings. I intentionally didn’t take any listings my first year because I was trying to figure out how to make my technology work in Canada, based on the success I had selling into the U.S. market,” he says.

“My focal point was the Internet, which is

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Andre Carriere

Muskoka alone. “We’re David to their many Goliaths,” says Adair. “As a new business, we went straight to the top of our local market. We’re definitely a disruptor.” Adding to the firm’s singular approach is its emphasis on buyers rather than properties. To that end, it boasts a “secret sauce”: a database of highnet-worth individuals built with proprietary lead-generation software.

When Adair bought what was then a small, obscure firm in Muskoka, named after its founders’ sons, “I started the business with the intention of doing something completely different. I wanted to create a brokerage for people who were fed up with brokerages,” says Adair, a licensed realtor and member of the Ontario Real Estate Association, Toronto Real Estate Board and the Muskoka Real Estate Board. “My first year selling real estate, I was the top-selling agent in our board and I had no listings at all. Instead, I focused strictly on where the buyers were.”

The average selling price for a Cayman Marshall listing is $2.2-million; most sales are for Muskoka waterfront property. “The big three lakes—Joseph, Muskoka and Rosseau— are where the big high-end sales are,” he says. “But anything that touches water, that’s our cottage-country specialty.” As for his unusual way to generate leads, “the software was 15 years in the making.”

all about buyers. My fixation from the beginning was on buyers, not sellers. I focused strictly on where the buyers were and how to get people to call or email me to buy a property. That’s not usually where you start.

We got known very early as the brokerage team that has all the buyers, instead of the brokerage team that has all the listings.

“Funnily enough, when you get known as the team that has all the buyers, you end up getting all the listings, because for a lot of these big properties it’s not like selling in a densely populated market where people could line up to spend five or six million dollars. In Muskoka, it’s more like, ‘Who can even find me a buyer for this damn place?’ because some of these places are almost impossible to sell; they’re big, beautiful and expensive vacation properties. You need to cast the nets very far and wide, not just locally, but internationally.”

A more recent device to augment lead-generation is the firm’s quarterly controlled-circulation coffee-table magazine, Cayman Marshall Collection, delivered to upmarket addresses in Muskoka and every home in Toronto with an assessed value over $4 million. Feature stories on lifestyle and local businesses are peppered with brokerage listings that comprise the magazine’s ads and function as teasers.

“We give very little information. The reader has to go to the Internet to get more; our

Previous page and above “The plan of each house I build is a balance of having each space the right distance and elevation to the water and view, which is why most of the houses sprawl lengthwise,” says Adair.

website will get them to subscribe. We want their information to be part of our database so we can send them listings and communicate with them forever. Our database becomes our strong horsepower. Everything funnels around it: the magazine, our website and social media.”

Different ABCs “A lot of people have a really bad taste from realtors,” says Adair, circling back to the mission statement of creating a brokerage for people fed up with brokerages. “When they list your property, they’ll go there, take some pictures on their smartphone, put your property on MLS, sit back and wait. There’s an old-school mentality of ‘List something to last.’” In other words, the typical real estate agent waits for the phone to ring.

“We get approached by people who have experience, but I’m not interested in them. I won’t hire anyone who has previous experience in real estate.” Still, he’s had no trouble

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The firm made the 2018 Growth 500 list with fiveyear revenue growth of 1,600 per cent. recruiting employees. “Some walked in the front door and said, ‘I really respect what you’re doing. How can I be a part of it?’ Most of them didn’t have a license.”

In the 1992 film about realtors, Glengarry Glen Ross, adapted by David Mamet from his 1984 Pulitzer Prize-winning play, the plot turns on a contest. The top seller will win a Cadillac El Dorado, second prize is a set of steak knives and third prize is a Trumpian “You’re fired!” While the film exaggerated the cutthroat atmosphere of a traditional real estate office, it sets up Cayman Marshall as the workplace polar opposite.

“No one who sells here has to pay for promotion, advertising or lead generation.

That’s all provided for,” says Adair. “We generate up to a hundred quality leads a week.

Not a day goes by that a team member doesn’t get a lead. As an agent, you know where you’re getting your business from, every single day you come here. I don’t think any other brokerage can make that claim.”

As the gatekeeper, he matches a lead with his most suitable agent. “I’m the quarterback.

When a lead comes in, some of my staff is better in certain geographic areas, some with certain personality types, such as elderly or youth. Some are better with long-term, incubated buyers who need a year to shop around.”

For all his data mining to keep in touch with client prospects, he still believes in intuition

and gut feelings to seal the deal. “Selling expensive properties isn’t about being a good salesperson, it’s about being a good problem-solver. The client likes the property, but it’s missing the right boathouse. They like it, but the landscaping’s bad. Or, ‘Find me this, but on a different part of the lake.’ You can’t ever push somebody into a property they don’t like, is my point. There has to be an emotional connection. They have to think, ‘This feels right.’”

Another unusual aspect is the annual distribution of bonuses. The pool is based on the agency’s gross sales. How that pie gets sliced is determined by peer-ranking. “It’s not just how well they play in the sandbox,” he said. “At the end of the year, they evaluate each other based on how respectful they are within the team, how willingly they share information and listings. We set up five criteria. Their percentage of the bonus is based on how they score one another.

“I’ve never heard of this capitalist-socialist model anywhere else. They’re evaluating themselves on how kind they are to each other, but they’re also competing against each other. I’m trying to create balance. I want them all to do well, but I also want them to look after each other.”

Serve the Need As Adair began observing that many listings on choice waterfront sites were difficult to

sell because the existing structures were aging, ramshackle teardowns, he saw a new market niche: a desire for high-end contemporary speculative housing. Surprisingly, he didn’t see the need for the cachet of a “name” architect or interior designer in the new venture. “I see a lot of plans every day. I always get advice from architects and designers that I respect. But I’m confident that I know what people want.”

If that sounds like the hubris of a tragic hero tempting fate, his pride was justified: he’s sold 12 of these spec houses so far.

They’ve gotten progressively larger and more costly, ranging up to $15 million.

While expensive, taking a year or two to sell after completion, these sales account for 10 per cent of Cayman Marshall’s total revenues, a figure that he expects to maintain in coming years. “I always put the builders that I work with first. I give them first crack at every opportunity. I don’t want to lose them so as long as they keep building and investing.”

When it comes to the realtor’s mantra of location, location, location, the desiderata are proximity to “amenities, topography, construction cost—some lots require a million dollars for blasting [their hard Canadian Shield granite], which becomes a math issue— and, of course the view and sun exposure.”

This is Muskoka, after all.

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Welcome Home Ontario Needs Rental Housing. What’s Stopping Us? By Tony Irwin

Basic economics teaches us that when

there’s demand for a product or service, supply will follow. So why hasn’t that been the case with rental housing in Ontario? Rental demand in Ontario has continued to expand at its fastest rate in more than 40 years. This growth in demand is a mark of success. Over the years, Ontario has attracted millions of net new immigrants fueled by economic strength, an embrace of diversity and the need to supplement our home-grown workforce.

More and more residents are attracted by a vibrant urban lifestyle and want to live downtown, but that desire runs smack up against the lack of new rental supply. Demand is high, and it’s driven up the price of home ownership, making rental housing an even more essential option. Yet Ontario has a supply deficit of 70,000 to 100,000 units over the next decade. Purpose-built vacancy rates in Ontario currently remain below two per cent for the second consecutive year, which hasn’t occurred since 2000-2001. The City of Toronto’s vacancy rate was even lower at just 1.1 per cent last year.

It could not be clearer: we need more rental apartments, especially in Toronto and the GTHA. So why has supply not kept up. Two words: “policy failure.”

Skeptics say that government policy is just an excuse and that developers don’t want to build rental housing. Facts tell a different story. Last fall, the Ford government created an exemption from rent control for new units occupied after November 15, 2018, reversing a change by the previous administration. The impact was immediate and dramatic. According to a new Urbanation report, the number of purpose-built rental apartments that opened

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their doors to tenants in the GTA reached a 25-year high of 1,849 units in the first quarter of 2019. That is almost five times the number of new units added per quarter in recent years. Developers had taken the Tories at their word, anticipated the change and invested again in rental housing to meet the burgeoning demand.

The report also finds that the pipeline for new supply is ballooning, with applications filed for almost 43,000 new units of purpose-built rental housing, nearly 50 per cent higher than just two years ago. Yes, policy can make a difference. That’s why the rental industry wants to work with governments, at all levels, to encourage new supply so that everyone who wants to rent will have that choice. As rental-housing providers, we believe there is much that can be done on a number of fronts:

GENTLE DENSIT Y — Ontario needs a policy-led “spark” to spur construction of rental housing in places where it makes sense.

Through provincial authority, the government could provide pre-permitting and “as-of-right” zoning for rental housing developments around transit stations, declining retail locations and under-utilized employment lands.

Land costs — Land represents approx-

Faster building approvals — It

imately one quarter of the cost of a typical rental housing project in Toronto. It’s a significant barrier to development. Government policy must maximize the use of privately-held lands that have a low-cost base. Properties with existing rental buildings that have room for additional towers, referred to as “unicorn sites,” represent untapped potential to put new units on the market without any cost to buy new land. These “unicorn sites” need to be treated like a strategic asset and optimized.

Government should also consider innovative ways to dedicate surplus lands for rental housing projects.

Development charges — 18 per cent of the cost of a typical rental housing project in the City of Toronto can be attributed to

HST, development charges (DC) and other government-imposed fees and charges. Once the City of Toronto finishes the phase-in of its latest round of DC increases in 2020, development charges in the City would have increased an astonishing 1,700 per cent since 2004. This means as projects are delayed due to red tape, the cost to the project business case resulting from development charges keeps on going up.

can take years, even a decade, to shepherd a project through all the needed municipal and local approvals. Time costs money, which goes into the rents charged. There must be a faster way. Premier Ford has promised to cut the development approval times to a maximum of one year. It’s an ambitious goal, but one worth striving for.

Unfair property tax for apartment buildings — Purpose-built rental

housing falls under the multi-residential property tax class, which bears a significantly higher tax rate than the residential (i.e. single-family homes) property tax class. In fact, the average property tax rate for apartment buildings is more than double that for single-family homes. Higher property taxes

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Quarterly purpose-built rental completions in the GTA

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make the already challenging operating environment for landlords worse and rents higher than they should be. This is patently unfair to tenants, who on average have incomes far lower than homeowners. This stark inequity in the property tax system should be addressed by equalizing the multi-residential and residential tax rates Improving the operating climate for rental housing — The current

stock of rental housing in Ontario is relatively old. Over 80 per cent of units were built before 1980 and only seven per cent have been built since 2000. Vacancy decontrol is the mechanism that allows for rental providers to raise rent to market level after a tenant leaves, and is how rental providers ensured a revenue stream to address the cost of major capital expenditures. As the supply gap is increasing, turnover has gone down dramatically. This coupled with rising pressure from organized groups fighting legal above-guideline rent increases has made the climate for operating rental housing very challenging.

We need a balanced rent control system to allow for capital investment, since the annual rent increase guideline (set at CPI) is explicitly not designed to cover the costs of major renovations. Under the present structure, the landlord makes improvements in the building, and then applies for a rent increase (capped

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at three per cent for three years) to recover part of the cost. The process creates uncertainty for both the landlord and the tenant, neither of whom knows if the AGI will be granted or not. More adjudicators and a properly resourced Landlord & Tenant Board to clear the backlog of applications would benefit landlords and tenants and provide greater certainty.

On May 2nd, the Minister of Municipal Affairs and Housing, the Hon. Steve Clark, released More Homes, More Choice: Ontario’s Housing Supply Action Plan, and proposes major policy changes that would streamline the development approval process to remove unnecessary duplication and barriers, make costs and timelines more predictable, and simplify the process for getting new purpose-built rental units to market. The proposed changes to the Development Charges Act will freeze DC rates at the time of the application to provide more certainty for developers. For rental housing projects, the government is also deferring the payment of development charges until occupancy and payable over five years. Smaller landlords who choose to add a secondary suite will also benefit as they will soon be exempt from development charges altogether.

More Homes, More Choice proposes other important policy changes as well. The government is moving to change back the rules so that the Local Planning Appeal Tribunal can make decisions based on the best planning

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outcomes and is able to hear fresh evidence to inform its rulings. The legislation has given the Minister of Municipal Affairs and Housing the authority to require a local municipality to adopt a mandatory development permit system to streamline planning approvals to 45 days in prescribed areas.

The government has also introduced a framework to make community benefit related costs more predictable by introducing a community benefits charge that will be capped as a percentage of the land value, keeping municipalities “whole” while providing greater certainty and getting away from a culture of councillors playing “let’s make a deal” on planning matters. Removing barriers to supply and easing operating challenges won’t be easy. But the alternative – ever-tightening rental markets and far too many people without real housing choices – is not an option.

The Ontario government deserves credit for taking dramatic steps in the right direction.

With these kinds of changes, the conditions to create more purpose-built rental housing are starting to come within reach. Although more is needed to meet demand, there is hope that sanity is being restored to the rental market. The rental housing industry is ready, willing and able to work with all governments to get us the rest of the way.

Tony Irwin is president and CEO of the Federation of Rental-housing Providers of Ontario.

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Source: Urbanation Inc.

2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0

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ER744 SBD CA AH RES Testimonial AD_Print.pdf

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Dig deeper into sustainability and earn incentives for your building project.

Wigwamen Terrace,

Briarwood Development Group,

AFFORDABLE HOUSING ADDITION

RESIDENTIAL DEVELOPMENT

Savings

by Design Affordable Housing Program

Savings

by Design Residential Program

The Enbridge Savings by Design workshop brings together a number of experts in the performance of buildings systems and components that helped the Wigwamen Terrace Roof Addition project team to have a holistic and real-time interactive view of the potential measures to implement to improve the overall building addition performance.

The project team and the building owner were able to acquire insightful information on a number of best practice solutions, in areas that range from building envelope, mechanical systems, and heath & wellness that ultimately have been implemented into the final project. The selected strategies encompass an overall insulated building envelope (beyond what is required by local codes), increased efficiency of ERVs, VRF heat and cooling systems on new added suites, and Amenity room, including partial retrofit of existing suites.

These measures are expected to help significantly decrease the energy consumption and greenhouse gas/carbon emissions of the building addition by 28% and 25%, respectively, over NECB 2015 requirements.

— Antero Fonte, Associate, LGA Architectural Partners

While all homes must be built to code, builders like Briarwood Homes know that homes built to Savings by Design (SBD) standards have energy performance beyond code. In Briarwood's residential development in Jackson's Point, Georgina, for example, SBD-inspired design choices included envelope upgrades like ENERGY STAR windows and Tyvek exterior envelope, and mechanical system upgrades like 95% efficient furnaces, heat recovery ventilation, and 94% efficient domestic hot water heaters. For homeowners, these choices will mean lower energy bills, better indoor air quality, increased comfort, and future proof durability.

“Our customers will not only save money by buying an energy efficient home,” says Briarwood Homes Vice President Project Development Fausto Saponara, “but they will also make a positive contribution to the environment that we all share.”

— Fausto Saponara, VP Project Development, Briarwood Homes

To learn more, visit SavingsByDesign.ca BLD JunJul 19.indd 26

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site visit Middle Ground

Haeccity Studio Architecture’s new project in Vancouver fills a void in contemporary housing design.

By Shannon Moore

THIS PAGE Sandwiched between a seven storey heritage building and a two-and-a-half storey heritage house, the project needed to respond to spatial limitations as well as parameters set by municipal policies and the West End Community Plan.

Photography by Sama Jim Cazian

a

On downtown Vancouver’s Comox Street, wedged between Edwardian and Elizabethan-style homes, sits Haeccity Studio Architecture’s new Infill Housing Project, a three-storey walk-up on a modest, 33-ft. by 121-ft. lot. Responding to the city’s “Missing Middle Typology,” the building offers modern urban amenities while still respecting the character and charm of its historic block.

“When we started this project, ‘Missing Middle’ was not a well-known phrase,” says Shirley Shen, co-founder of Haeccity, of the building typology that calls for multiunit housing on a small and dense scale.

“What emerged is a model that can be

applied in a widespread approach, providing much more housing choices across Metro Vancouver and other cities.”

Previously home to a single-family bungalow, the same site now contains six rental units: two fully accessible; two single bedroom; and two family units, one of which contains three bedrooms and a rooftop deck.

“Being able to extract all of that from a lot that previously only served one tenant has a lot of value,” says principal Travis Hanks.

The building’s pitched roof, lapped siding and punched windows are a deliberate nod towards the historic homes in the area, while its central courtyard, careful network of paths

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THIS SPREAD Comox Street embodies the desirable qualities of a missing middle typology, including walkable urban living, accessibility to a middle-income household, and housing diversity. Its modern expression nods to more traditional typologies of the neighbouring Mole Hill Houses, articulated through the sloped roof, separate exterior dwelling entrances, and a network of intimate paths and walkways.

Photography by Sama Jim Cazian

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and walkways, and separate exterior dwelling entrances (a common element of “ground-oriented” housing in Vancouver) foster an intimate and important sense of community. A green roof and existing mature Cypress tree were also incorporated to improve green space and general quality of life.

When confronted with challenging zoning and bylaw limitations, the Haeccity team saw an opportunity for innovation in their design.

“It’s easy to look at the building, see the cantilever and all these unique formal moves, and think they’re simply driven by the architect’s desire for stylistic or formal expressions,” explains Hanks. “But in actuality, these moves were determined by site conditions and constraints.” Zero lot lines, privacy concerns, fire access regulations, parking requirements, tight setbacks and spatial limitations, among other challenges, greatly impacted the final design. “The space still makes sense and nothing was really compromised,” adds Shen. “In fact, it made it more interesting.”

In the end, Haeccity’s Infill Housing Project has become an attainable and realistic model for cities in need of increased housing options in the face of limited space. Serving a higher population of tenants on a more thoughtful scale, the project demonstrates how tricky regulations can be successfully navigated to achieve an effective and aesthetically-interesting architectural design.

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from the bullpen Should Growth Pay for Growth?

Striking a balance between housing supply and city amenities is more important than ever.

By Ben Myers

Ben Myers is president of Bullpen Research & Consulting, a boutique real estate advisory firm that works with land owners, developers, and lenders to better inform them of the current and future macroeconomic and site-specific housing market conditions that can impact their active or proposed development projects.

Follow Bullpen on Twitter at @BullpenConsult or find Ben at www.BullpenConsulting.ca.

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The government has been diligently looking for ways to increase housing supply in Ontario. In May, the Hon. Steve Clark, Minister of Municipal Affairs and Housing rolled out a new plan to tackle the crisis entitled More Homes, More Choice: Ontario’s Housing Supply Action Plan. The development industry was generally optimistic that the plan would reduce the time required to secure planning approvals, but the City of Toronto planning department concluded that the plan would not increase housing supply.

Neither developers nor planners have accepted any blame for the skyrocketing house prices in Ontario’s capital, with developers ignoring their aggressive land purchasing strategies, and planners patting themselves on the back for the approvals they’ve already granted, despite the record-low vacancy rates and daily bidding wars a glaring reminder of the massive undersupply.

However, increasing housing supply can have negative consequences including unwanted shadows; increased traffic; congested subways; crowded sidewalks; disruptions due to construction; the loss of lower priced housing; or the demolition of a favourite place. Municipalities have financial tools to help offset some of these outcomes, like development charges and parkland dedication fees that are used to improve, refresh, renew, and build public spaces and transit.

As they say, growth is intended to pay for growth, but almost all of the increases in these growth-related fees get transferred to new home buyers, driving up housing costs and reducing affordability. Developers don’t automatically eat those fees and accept a lower return, they try to either buy land for less or reduce other costs, but the typical result is higher prices or a shuttered project.

According to public space advocate Jake Tobin Garrett on ParkPeople.ca, the new Supply Action Plan “combines parkland dedication (Section 42) and density bonusing (Section 37) into one tool called a Community Benefit Charge. It severely curtails the ability of cities to require developers to provide parkland onsite.” Garrett mentions that

Sections 42 and 37 “compel developers to pay for a portion of things like water and sewer infrastructure, transit, daycares, public art, etc. All things that are important for quality places to live.” The question ultimately becomes: where is the trade-off? How do you maintain housing affordability, create enough housing supply to meet demand, while still requiring new home buyers (and tenants) to fund parks, public art, and transit?

A survey conducted as part of the government’s consultation prior to releasing the Action Plan asked people what their priority was when looking for a home: 52 per cent said the price or rent of the residence was most important, while 23 per cent chose nearby services, and 14 per cent chose the type/size of the real estate. Cities can fund all the parks and public art they desire, but if only the most affluent people can afford to live near these amenities, they have failed.

I’m not advocating for a massive increase in greenfield development, as cities like Dallas seem to have done, but they do make it easy for businesses to flourish, they don’t have restrictive planning policies, they deliver a lot of rental and ownership product, and house prices have been relatively stable. Some people don’t like the idea of making life easier for developers, but keeping the cost of living stable and predictable is an admirable policy goal.

Many anti-supply and anti-development advocates like to respond to new housing proposals with “You’re building for whom?” implying that new housing isn’t desirable, or a benefit to the community because it is expensive. You could ask the same thing about new parks: why are new home buyers in tiny condos covering the bill for a public space that equity-rich single-family homeowner will share?

There are no easy answers to these questions, but striking a balance between housing supply and city amenities is more important than it’s ever been. It is commendable that the government is trying to address the housing crisis, and the best long-term solution to that problem is more homes.

June/July 2019

2019-06-07 2:10 PM

Exhibit at our 3-Day Expanded Trade Show!

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