CBC Early Edition - Ways to Advance Housing Affordability. August 20, 2025

At 7:10 this morning, David Ley and I were invited to join Chris Walker, (the CBC Kelowna morning host who is filling in for Stephen Quinn) to discuss a letter sent by a group of planners, architects, and academics to David Eby and Christine Boyle on how to advance housing affordability. This letter was similar to the letter sent to Prime Minister Mark Carney and federal housing minister Gregor Robertson, and referenced in some of the previous posts on this blog.

At issue is what is the best way to address housing unaffordability and stimulate production at a time when the presale condominium market is dead, and many purpose-built rental projects are also stalled or being put on the back burner.

Chris Walker noted that while I signed the letter to the federal government, I didn't sign the most recent letter to the province. The reason is that I differ somewhat from the rest of the signatories in terms of what needs be done to stimulate new projects and the role of the private sector. I also have a difference of opinion in terms of how we should finance growth. 

More specifically, the signatories generally think we should look at the current crisis as an opportunity. We must not continue doing what we have been doing which has got us into the current situation. Governments should focus on the construction of non-profit and rental housing and the conservation of older apartment buildings that offer affordable housing. 

While I agree with this, especially since I was once CMHC's manager of social housing in the mid 1970s, I also think we need to figure out how to put the private sector back to work, since without new projects many people in the allied professions and construction trades are going to be put out of work. While more housing does not necessarily lead to more affordable housing, if we stop building, the situation will not improve.

The real problem. As long as banks insist on presales, developers must design and market their projects to investors. 'End-users' including move-up buyers and move down 'empty nesters' do not want to buy a home three years before it is completed.To my mind, this is the real problem. So what's the solution?

Back to the future. When I first started in the housing development business, there was no such thing as a presale requirement before a condominium project could be financed by the bank. The lender reviewed the developer's market analyses and track record, and underook its own analysis. It then made a decision on whether to finance a project or not. As the project neared completion, model suites were set up and the homes were sold.

To a certain degree, this changed in the mid-80s as a result of a project by Tridel in Toronto, called The Polo Club. The presale program included 'priority registration', the brainchild of Stan Kates, a Toronto marketing consultant. It was the first significant pre-sale condominium project with buyers lining outside a sales trailer on Bay Street. 

The success of this marketing program was featured on CBC's The National anchored by Knowlton Nash. Developers across Canada took notice.

I know about this since at the same time I was involved with the development of The Lagoons in False Creek in partnership with the Belzberg's First City Financial. Brent Belzberg saw people lining outside the sales centre and asked me to invite Stan and his sidekick Marty Atkins (with whom I went to highschool) to Vancouver to see if they could work their magic on our project. They came to town and we put them up at the Hyatt. But once we showed them our plans, they told us we had the wrong type of project. For their program to work we could not have more than three different unit designs!

Eventually Bob Rennie and Dan Ulinder began implementing presale programs in Vancouver. I believe the first project was for Wall Financial on Howe Street. Before we knew it, aggressive marketing programs offering smaller condos targetted to investors became the norm and lenders soon decided that rather than try to properly assess a project's feasibility as they had done in the past, they would simply demand presales as proof of a project's viability. And the situation ballooned from there.

So, to my mind, the best way Mark Carney and David Eby can bring back some normalcy to the housing market would be to tell the banks to stop demanding presales. Allow projects catering to homebuyers, not investors to proceed, because once they are finished, if they offer good suite layouts and fair pricing, they will sell upon completion. 

Now you might reasonably ask why all the current unsold condos aren't selling?

For several reasons. Firstly, there is a lot of uncertainty in the market. But more importantly, too many of the unsold condos in Metro Vancouver are smaller studio, one-bedroom and 'junior' two-bedroom suites designed to be purchased by investors and rented, not lived in by end users. Unfortunately, since rents have come down, (yes, a good thing if you're a renter), and there is little expectation that prices are going to keep going up, the economics of buying and renting these small units no longer work.

While our 11 minute time limit this morning didn't allow me to get into all of this, you can listen to this morning's interview at the link below:

ps. Someone observed that Chris Walker seemed very prepared for the interview. That's because like Stephen he's obviously a very intelligent guy. But credit should also go to Caroline Chan, a journalist and story producer at the CBC with whom I spoke yesterday afternoon and asked some very thoughtful questions.

https://www.cbc.ca/listen/live-radio/1-91-the-early-edition/clip/16164622-ways-advance-housing-affordability