Redeveloping properties requires the temporary displacement of tenants, creating a significant challenge for housing providers and developers. The dual hurdles of finding suitable interim housing and managing financial constraints make the process complex and, at times, overwhelming.
Some social housing providers attempt to address this issue by keeping units vacant in other properties to house displaced tenants during redevelopment. While this helps to a degree, it is not an ideal solution as it reduces the overall availability of affordable housing—a resource already in critical demand.
This challenge is not limited to non-profit housing providers. Many development companies face the same issue with older buildings ready for redevelopment. Even when existing tenants are guaranteed housing at the same rental rates in the new development, the pressing question remains: Where can they be housed during the interim?
In addition, new housing legislation that permits gentle density increases on residential properties offers a promising opportunity. With tens of thousands of potential sites in Vancouver alone for secondary suites, Accessory Dwelling Units (ADUs), duplexes, and multiplexes, we have the means to address this challenge—but a coordinated strategy is essential.
A Long-Term Solution
A sustainable approach requires a forward-thinking strategy to minimize disruption and ensure housing continuity during redevelopment. The solution lies in building ‘transitional or interim residences’— dedicated, purpose-built housing that can accommodate displaced tenants over the extended periods required for redevelopment.
Key features of this approach include:
• Strategic Development: Purpose-built interim residences designed to house tenants temporarily, minimizing displacement and disruption.
• Mixed Housing Options: Incorporating affordable, mid-market, and revenue-generating units to ensure financial sustainability.
• Leveraging Legislation: Utilizing newly available density opportunities to create ADUs and multiplexes, providing additional housing capacity.
By proactively funding and creating sufficient interim housing, we can transform redevelopment from a disruptive necessity into a seamless and sustainable process. Together, we can ensure that redevelopment enhances communities without sacrificing housing security.
Integrated Delivery Platform: Building the Way Forward
The challenge of constructing 3.5 million additional homes by 2030 may seem monumental, but it is achievable if we take action now. To meet this goal, Canada must increase its building capacity by 150%. This is a call to action for the housing sector: build better, faster, and more cost-effectively. It’s time for a national building spree to address the housing crisis and meet our communities’ needs.
The Way Forward: Key Strategies
1. Affordable Housing VENN Approach
• Reduce Development and Finance Costs:
Streamline processes to lower costs and accelerate timelines, leveraging mixed-income and mixed-use developments.
◦ Examples: Incorporate sustainable revenue streams like hotel rooms, student and workplace housing, short-term rentals, and executive suites, alongside affordable homeownership and rent-to-own options.
• Increase and Speed Up Development:
◦ Simplified Permitting: Reduce permitting and approval timelines, which currently take up to 11 months for single-family homes and over three years for mid-rise construction in cities like Vancouver.
◦ Automated Production Systems: Use advanced technologies for faster delivery of housing solutions.
2. Housing Bonds for Affordable Funding
• Low-Interest Financing:
Develop housing bonds to provide long-term, affordable funding for construction loans and mortgages.
◦ Target: Achieve a 2% bond rate to significantly lower housing costs.
◦ Innovative Incentives: Enable a portion of bondholders to donate their interest back in exchange for a charitable tax credit.
• Current Context:
With mortgage rates at 4 TO 5.5%, the cost per month for a 600 sq. ft. unit exceeds $1,000 on a 25-year term. Housing bonds can make these costs more manageable for developers and homeowners alike.
3. Reducing or Eliminating Land Costs
• Creative Land Use:
Reduce land costs by leveraging strategies like:
◦ Long-Term Leases: Secure 60–99-year leases to eliminate upfront land purchase costs.
◦ Community Land Trusts: Retain land ownership within communities for long-term affordability.
◦ Land Donations: Encourage donations from governments, industries, and landowners.
◦ Redevelopment Opportunities: Utilize underperforming assets, such as aged-out buildings or strip malls, where landowners donate a portion of the land in exchange for density bonuses and reduced capital gains exposure.
4. Modular/Prefab Production and Delivery
• Next-Generation Housing Systems:
◦ Scale modular and prefabricated construction methods for faster, more efficient building processes.
◦ Utilize advanced technologies for low-, mid-, and high-density projects.
5. Leveraging SaaS (Software as a Service)
• Automating Housing Development:
Implement SaaS solutions to streamline and de-risk housing production, benefiting non-profits, builders, and homeowners.
◦ Simplified Processes: Use SaaS to automate permitting, legal, logistical, and financial tasks for non-market developments.
◦ One-Click Access to Resources:
▪ Enable access to self-directed RRSP funds to purchase housing bonds.
▪ Simplify pre-approvals, bulk purchasing, and permitting for laneway homes, low- and mid-rise developments.
▪ Integrate smart contracts and pre-sale systems to expedite project timelines.
By adopting this integrated delivery platform, we can address the housing crisis with innovative, scalable, and sustainable solutions. Together, we can build the homes Canada needs and create thriving, inclusive communities.