Single-family zoning: reserving land for the rich
Illustration by Michael Wiebe
Michael Wiebe is an economist and data scientist, no relation to the former city councillor.
The result of single-family zoning is that less wealthy people can’t pool their money to buy land.
Typically there’s a developer who wants to build the apartment building, but they’re basically a middleman. Ultimately, it’s the future residents who pay: the cost of constructing a new purpose-built rental building comes from the stream of future rental income. Or in the case of a condo building, it comes from owners who buy individual apartments. (There’s also cases where the future residents of the building get together and act as their own developer, like Little Mountain Cohousing.)
When you reserve land for wealthy people in this way, people who live in apartments need to fight with each other over limited parcels of land.
A similar argument, using AI-generated images.
Another example, from Deny Sullivan, describing a 1600-square-foot house in Halifax, built in 1944, that was completely renovated and recently sold for close to $1M. Renovations are sucking labour and investment away from new homes.
Why didn’t the owners decide to build a new build? Well, currently, the house is zoned as ER-2. Meaning you can only build a duplex (+basement suite). That is despite it being smack-dab in the middle of Halifax, 100 meters from Robie street and the QEII hospital. Effectively, given current zoning, it’s most profitable to completely reno the house and sell it to a doctor.
With the (proposed) Housing Accelerator Fund (HAF) reforms, the owner of this property would have been able to build 4 units, and potentially up to 8 units depending on lot size.
I am willing to bet 2 nurses cannot outbid 1 doctor. But maybe 4 can. And I think surely 8 nurses can outbid 1 doctor. That is the key part of the importance of our zoning regime. It prevents the natural upsizing of cities, and then funnels resources into unproductive renovations because that’s the most profitable choice available under the constraints.