Here is an interesting chart, from Mike Moffat, that looks at housing completions — both ownership and rental — in the province of Ontario. The way to read this chart is that, for each date, you are looking at completions for the previous 10 years. (It says 12, but that seems to be a mistake.) For example, Q4-1964, which is the start of this chart, equals all homes built between Q1-1955 and Q4-1964.
Three things will probably immediately stand out to you:
- We built a lot of multi-family housing in the 1960s and 1970s. In fact, we built more than we’re building right now and that wasn’t just the case in Toronto and Ontario. In Canada as a whole, the majority of building permits (60%) issued between 1962 and 1973 were for multi-family buildings. More specifically though, this was a rental apartment boom, as opposed to a condominium boom.
- We then said: “Nah, let’s not build so many apartments anymore. Let’s go back to building more single-family houses.”
- And that’s what we did — by a fairly wide margin — until the early 2000s when the next great multi-family boom started to take hold. This time, though, it developed into a condominium boom.
Both multi-family booms have mirrored periods of overall economic expansion. But you also need to look at what government was doing. In the 1960s and 1970s we made it attractive to build rental housing (whereas today it’s a very challenging asset class to underwrite). And then more recently, we decided that much of our growth should happen in existing built-up urban areas. That generally means more multi.
But multi-family is a fairly broad term. Are we talking about 4-storey walk-ups or are we talking about 40-storey tall buildings? For those of you who are able to look through this chart to what’s happening in the market, you’ll know that we are far more effective at the latter. We have a lot of work to do when it comes to the in-between housing scales.
BRANDON DONNELLY 
It was the Federal Government cancelling the Capital Cost Allowance in the early 1970s that ended the rental apartment boom of the 1960s, which proves to me that our lack of rental housing is a taxation problem, not a planning and development problem.
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If the right incentives were in place, lots of developers would love to be building rental
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This also lays firmly at the feet of weak city councils and NIMBYS who have effectively pushed approvals density to specific nodes, resulting in higher density being the solution.
Putting intermediate density on inner streets has been political suicide and avoided by most.
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Correct
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No one said, “let’s stop building apartments”.
In 1975 Ontario introduced rent controls. The government made it impossible to build and finance rental properties when the ROI does not make sense.
The real estate industry is reflective of taxes. Not unlike the history of Paris where the Mansard roofs were a by-product of a taxation policies, accompanied by the Boston Tea Party, and the reason there is no salt in the bread in Venice.
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That was actually the point I was hoping to make. Doing things to make it “impossible to build and finance rental properties” is the equivalent of saying “let’s stop building apartments.”
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