Time to Think Bigger and Work Together (Maybe Stop Taking Tips from Japan)

Ah, the Canadian housing market—a rollercoaster ride that few of us asked for, but all of us are on. If you’re in Toronto, you know that buying a home can feel like trying to solve a Rubik’s Cube blindfolded. Condos are currently a buyer’s market, with supply stabilizing and even trending downward. So if you’re looking to snag a condo, now might be your golden ticket. Houses, on the other hand, are generally favoring sellers, but savvy buyers can still find opportunities if they know where to look.

Municipalities: The Speed Bumps on the Road to Affordable Housing

Let’s cut to the chase: local governments often act like the friend who insists on reading the entire menu before ordering—slowing everyone else down. Their red tape and susceptibility to NIMBYism (Not In My Backyard) make building new housing a Herculean task. It’s as if they’re saying, “Affordable housing? Absolutely—as long as it doesn’t change anything around here!”

Provincial Powers: Using MZOs as a Quick Fix

In response, the Province has been wielding Municipal Zoning Orders (MZOs) to override local hurdles. Think of it as hitting the “easy” button to get things moving. While this approach can jumpstart projects, it’s more of a Band-Aid than a cure. To genuinely tackle housing affordability, we need a strategy that’s both comprehensive and collaborative.

The Eisenhower Strategy: If You Can’t Solve It, Enlarge It

Remember the saying, “If you can’t solve a problem, enlarge it”? It’s time we embrace that philosophy. By elevating housing approval powers to higher levels of government—provincial or even federal—we can dilute local interests that often stall progress. It’s like switching from a local bus that stops every two blocks to an express train that gets you where you need to go efficiently.

Japan’s Housing Model: A Square Peg in a Round Hole

Some voices in the real estate world, including an outspoken brokerage owner, are pointing to Japan as the magic solution to our housing woes. All while seemingly oblivious to the fact that such policies might sink his own ship—and that of his well-heeled clientele. Hint: properties in Japan depreciate to ZERO in thirty years.

In Japan, houses are more like disposable cameras than long-term investments. According to a 2008 study by Richard Koo and Masaya Sasaki, the average Japanese house lasts about 30 years before it’s demolished and rebuilt. Homes depreciate faster than you can say “sushi,” turning them into consumer goods rather than assets that build wealth over time.

Wealth Building: The Canadian Dream vs. The Japanese Reality

In Canada, homes are often seen as nest eggs—assets that appreciate and contribute to personal wealth. They’re the cornerstone of many Canadians’ financial futures. In Japan, however, homeowners often lose money when selling, and have to save extra just to rebuild. This has led to a culture where cash and deposits dominate personal assets because homes can’t be relied upon to grow wealth.

A Collaborative Approach Beats a Combative One

Here’s where we need a reality check. Adopting Japan’s model would be like trying to fit a square peg into a round hole. Yes, we might boost housing supply, but at what cost? Devaluing existing homes would wipe out significant portions of Canadians’ net worth. Millions who have invested in real estate as their financial bedrock would find themselves on shaky ground.

Rather than following a combative plan that pits different levels of government against each other, or imposes top-down solutions without local input, we need a collaborative strategy. One that brings together federal, provincial, and municipal governments, along with developers and communities, to build more homes faster. This cooperative approach is more likely to produce sustainable results than any unilateral policy that could inadvertently worsen the situation.

Current Market Snapshot: Opportunities Amidst the Challenges

Back to Toronto’s market dynamics: condos are ripe for the picking if you’re a buyer. With supply stabilizing, it’s an opportune moment to make a move before the scales tip again. As for houses, while many areas favour sellers, there are still hidden gems where buyers can capitalize. The market isn’t monolithic, and policies need to reflect these nuances.

Federal Intervention: The Key to Unlocking Affordable Housing?

To genuinely address housing affordability, we need to elevate the conversation to the federal level while ensuring collaboration across all tiers of government. This isn’t about Ottawa dictating terms but about setting national standards and providing resources that enable local governments to support housing growth effectively. Incentives, infrastructure investments, and streamlined regulations can empower cities to facilitate development without sacrificing community input.

Quality and Quantity: Learning from Japan’s Mistakes

While increasing housing supply is essential, we shouldn’t sacrifice quality for speed. Japan’s focus on rapidly building homes led to smaller, less durable houses that didn’t stand the test of time. We don’t want to flood the Canadian market with properties that become burdens rather than assets. A balanced approach that emphasizes both quality and quantity will serve us better in the long run.

A Sprinkle of Irony and Humor

Isn’t it ironic that a real estate mogul is pushing for policies that could devalue real estate? That’s like a fitness instructor advocating for unlimited pizza Fridays. Perhaps next, he’ll suggest we invest heavily in typewriters and rotary phones.

Conclusion: Let’s Build Bridges, Not Walls

Housing affordability is a complex issue that won’t be solved by copying another country’s model—especially one that doesn’t align with our economic realities. We need to think bigger, act smarter, and most importantly, work together. A collaborative plan that accelerates homebuilding while preserving the value of existing properties is not just more productive—it’s essential.

What are your thoughts? Is a collaborative, multi-level government approach the way forward, or do you believe in a more combative strategy? And should we really be taking housing cues from a model where homes depreciate faster than last year’s smartphone? Join the conversation and let’s find a solution together!

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