Issue #32: Crisis Management

Welcome back, everyone! This week finds me getting political, and I don't like to get political here, but it's hard not to, given world events.

With the April 28th election just weeks away and Nanos showing Liberals at 43%, Conservatives at 38%, and NDP at 8%, it's looking increasingly likely we'll see a Liberal government implementing this housing plan. So let's talk about it, shall we?

Have you noticed that everything's a crisis these days? A full-blown, five-alarm, someone-call-the-authorities CRISIS?

The City of Calgary has an affordability crisis and a sustainability crisis. (And judging by the Flames' performance this season, maybe a hockey crisis too.)

The province is dealing with an existential "should-we-separate-from-Canada" crisis that seems to resurface every time oil prices fluctuate.

The feds have accumulated so many crises it's like they're collecting them for some sort of apocalyptic bingo card. Climate crisis. Housing crisis. Healthcare crisis. Cost-of-living crisis.

Meanwhile, President Trump is manufacturing his own crisis south of the border with tariffs that threaten to turn our economy into the financial equivalent of a dumpster fire.

But there's one crisis that's bringing everyone together in perfect crisis harmony: housing. It's the rare triple-crown winner that has municipal, provincial, AND federal governments all claiming emergency status.

Of course, the Canadian housing crisis didn't materialize overnight. It's the predictable result of ambitious immigration policies colliding with chronic underbuilding, restrictive zoning, punitive taxation, and a construction labour shortage that has tradespeople earning more than some doctors.

And now the Liberals have unveiled their solution in a shiny new housing plan – described as "the most ambitious since World War II."

Because nothing says "we're handling this calmly" like comparing your policy to wartime measures...

Frank

SCENE: A canapé-laden launch event for the Calgary Affordable Housing Foundation. The room hums with developers, architects, and nonprofit leaders.

I'm nursing a suspiciously weak gin and tonic when I spot Frank Delvecchio, a legendary Calgary developer whose name adorns half the city's 1970s apartment buildings.

Frank spots me and ambles over, his weathered face cracking into a grin. At 82, he still shows up to these events in the same outfit: pressed jeans, crisp button-down shirt, and a bolo tie that probably costs more than my car.

"Greg! Still writing that internet newspaper of yours?" He claps my shoulder with a hand that's built thousands of units across Western Canada.

"Newsletter, Frank. And yes, just past my 6-month anniversary."

He nods approvingly, grabbing a tiny sandwich from a passing tray. "What's the topic this week? How terrible municipal planning is? That's always a crowd-pleaser."

"Actually, I'm looking at the Liberal housing plan. Have you seen their proposal? They're bringing back a version of MURB."

Frank nearly chokes on his sandwich.

"MURB! Now there's a blast from the past. Son, I built half of Calgary's rental stock thanks to MURB in the '70s." He leans in conspiratorially. "Made a fortune too, before the feds got wise and shut it down."

"How does this new Liberal plan compare to the original MURB days?"

Frank eyes me carefully. "You really want to know what a dinosaur like me thinks about your precious Missing Middle and all that?"

"That's exactly what I want to know."

He sighs dramatically. "These Missing Middle buildings are for all you new wavers with your oat milk lattes and avocado toast." I don't bother telling him these references are already a decade out of date. "In my day, we built REAL apartment buildings. Twelve stories minimum!"

"But what about the Liberal plan specifically?"

Frank sets down his drink, suddenly serious. "Look, I've seen every government housing program since Diefenbaker. Let me give you the quick rundown of what'll work and what won't in this Liberal plan."

Frank's Unfiltered Commentary

1. Build Canada Homes (BCH) – The New Federal Developer

"They're creating a crown corporation to build affordable housing," I explain.

Frank snorts. "A government-run developer? That'll move at the speed of molasses in January. Look, government developers were fine in the '40s when we had millions of veterans needing homes and nobody cared what they looked like. But today? With modern building codes, community consultations, and environmental assessments? Good luck breaking ground before 2030."

The risk: BCH will likely struggle with the same permitting delays and regulatory hurdles as private developers, but with added bureaucracy and political interference. And in Alberta, anything with "Canada" in the name already faces an uphill battle, although, Calgary has certainly embraced CMHC’s MLI Select.

2. The Return of MURB – Tax Deductions for Apartment Investors

Frank's eyes light up. "Now THIS I like. The original MURB program was a gold mine. It let high-income folks like doctors and lawyers deduct rental property depreciation against their personal income. Suddenly every professional in Calgary wanted to invest in my buildings."

The potential: The tax sheltering aspects of MURB could attract significant private capital into purpose-built rental at a time when we desperately need it.

The risk: Without strong affordability requirements, we might just end up subsidizing luxury rentals while doing little for those most in need. As Frank put it: "The original MURB had no affordability strings. We built what the market wanted, not what social planners thought people needed."

3. Half Off Development Charges for Multi-unit Housing

"They're promising to cut development charges in half for multi-unit buildings," I say.

Frank laughs. "You know what we call that in Alberta? A solution to a problem we don't have." He's right – Compared to Canada’s other large cities, Calgary's development charges are already among the lowest. "Toronto might see $40,000 in savings per unit, but here? Maybe $5,000-$7,500. It's peanuts compared to construction costs."

The issue: This policy disproportionately benefits Toronto, Vancouver, and other cities with sky-high fees, while offering minimal benefit to Calgary and Edmonton, further reinforcing the perception that federal housing policy is designed primarily for central Canada.

4. $25 Billion for Prefab and Modular Housing Manufacturers

"They're going big on innovative construction," I mention.

Frank looks skeptical. "Prefab has been the 'next big thing' for 50 years. Remember Expo 67? Everyone thought we'd all be living in factory-built homes by 1980." He shrugs. "That said, labor costs are killing traditional construction, so maybe prefab's time has finally come."

The potential: Western Canada has abundant timber resources and manufacturing capacity that could benefit from this investment.

The hurdle: Building codes and municipal permitting processes weren't designed for modular construction and would need significant overhauls to avoid becoming bottlenecks.

5. GST Exemption for First-time Homebuyers (Under $1 Million)

"What about removing GST for first-time buyers?" I ask.

"Not bad," Frank admits. "5% off is 5% off. But it's a band-aid on a bullet wound if supply doesn't increase."

The reality: In Calgary's market where starter homes typically run $400-500K, this could save first-time buyers up to $25,000 – meaningful but not game-changing. In Vancouver or Toronto? Good luck finding anything under the $1M cap.

Denouement

Frank drains his drink. "Look, son, I've been in this game for over 60 years. I've seen every housing program come and go. The trick isn't the flashy new initiatives – it's fixing the fundamentals."

"So what would you do differently?" I ask.

"I'd reform immigration to match housing supply. I'd force municipalities to approve projects in weeks, not years. And I'd fix the damn building code so we can actually build affordably." He straightens his bolo tie. "But nobody wants to do the hard stuff. They'd rather announce a shiny new program with a fancy name."

I can't argue with his assessment. "Any final thoughts for my readers?"

Frank's eyes twinkle. "Tell them what my old man told me when I started developing: 'In real estate, by the time the government gets around to solving a problem, the market's already moved on to the next one.'"

As I watch him walk away to corner another victim with his unfiltered opinions, I wonder if he's right.

Housing programs come and go, but the fundamentals of supply and demand remain eternal.

Whether the Liberal plan represents transformative policy or electoral theater remains to be seen.

But one thing's certain – in Western Canada, we've learned through decades of experience to be skeptical of grand federal solutions to our local problems.

If this was an interesting take, reply with “More”, and I will phone Frank and ask him about the Conservative housing plan for next week.

🧠 AI "Mastery" of Land Development

Riding high from last week's AI proforma success, I got cocky and prompted: "You are an expert land developer. Design me the best mixed-use community subdivision plan for a 15-acre parcel with wetland features, transit access, and variable topography (the prompt was actually much more complicated)."

Behold the masterpiece below…

…which apparently was designed by an AI that believes:

• People enjoy living in perfectly rectangular parcels

• "Wotiand" is the proper spelling for wetland features

• "Mixed Use" and "Multi-Use" are meaningfully different land use categories

• Roads should be exactly 15.0m, 16.0m, or 22.5m wide (nothing else!)

• "PUL" requires no explanation (Public Utility Lot for the uninitiated)

• "BUFFAULODRRU" is a reasonable street name

• A creek can be represented by two parallel blue lines and are also street names

We've come far with AI, friends, but not THAT far. If you need actual development planning, maybe stick with humans for now.

🤔 Stuff From The Week

We Need More Trades!… Wait What?:   A new report from the BC Construction Association (BCCA) reveals deep concerns over payment delays in the province’s construction sector.

Conservatives: Poilievre vows to "streamline environmental reviews" for resource projects, which is politician-speak for "letting developers build wherever they damn well please." Coming soon: luxury condos in moose habitats!

Liberals: Carney promises free national park access this summer. Because nothing says "solving the housing crisis" like letting homeless people camp in Banff for free.

NDP: Jagmeet Singh pledges $16 billion to build 3 million homes by 2030. At $5,333 per home, expect a lot of very cozy garden sheds with "charming minimalist features."

🔀 Trends From GROK (weekly summary so you don’t have to)

Here’s a fresh summary of trending topics in Canadian real estate development, covering the week of April 6–12, 2025. These points are distinct from last week’s trends (multi-unit surge, distressed assets, sustainability, policy impacts, regional differences) and reflect the latest industry shifts (← Thanks Grok 😉).

• Industrial Sector Slowdown Signals Caution: New industrial construction has dropped significantly, with reports indicating a 30% decline from its peak, driven by high costs and shifting demand. Annotation: This pullback, noted in commercial real estate analyses, suggests developers are reassessing industrial projects—once a hot sector—amid economic uncertainty, potentially opening opportunities for adaptive reuse in urban markets.

• Office Market Shows Early Recovery Signs: Suburban office properties are seeing increased transaction activity, particularly in cities like Toronto, hinting at a gradual office sector rebound. Annotation: After years of stagnation, this “green shoot” trend points to a flight-to-quality shift, where well-managed, modern offices are regaining investor interest, though downtown cores lag behind.

• Rental Supply Pressures Ease Slightly: New rental housing completions are starting to temper rent growth in urban centers, with some markets reporting modest declines in condo rental rates. Annotation: While demand remains strong, this influx of supply could offer temporary relief for tenants, though experts warn immigration trends and affordability challenges may quickly offset gains.

• Trade Tariff Threats Cast Uncertainty: Looming U.S. tariffs, potentially starting as early as April 14, 2025 (rumoured escalation date for broader or more punitive tariffs, based on speculative chatter in real estate), are raising concerns about an economic slowdown and its impact on housing demand. Annotation: With British Columbia estimating a $69 billion economic hit by 2028, developers are bracing for reduced buyer confidence and higher material costs, a key watchpoint for your readers.

• Innovative Financing Gains Momentum: Developers are increasingly turning to private capital and syndicated deals to bridge funding gaps, especially for stalled projects. Annotation: This creative approach, highlighted in industry discussions, reflects a response to tight lending conditions, offering a lifeline for projects while signaling a shift toward risk-sharing models.

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👉 Facing development challenges that keep you up at night? Whether it's navigating byzantine zoning bylaws, optimizing your pro forma, or finding that perfect strategic positioning in a crowded market, I've seen it all in 30 years in the development trenches.

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See you next Friday.

Cheers,

- Greg

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