How do you solve a housing crisis?

According to the Canada Mortgage and Housing Corporation (CMHC), Canada is short 3.5 million homes. And there’s no single smoking gun to blame.

Supply has lagged demand for decades. Record population growth means more people than ever need a place to live. The building industry faces rising material costs and labour shortages. Canadians struggle to afford what’s on the market as rents and interest rates soar. And as the climate crisis escalates, floods and wildfires threaten more of the country’s existing housing stock while potentially causing families and entire communities to be displaced.

So how do we tackle that huge, complicated mess? Too often, the discussions pit landlords and investors against tenant rights groups and organizations fighting homelessness. But two key organizations — the Canadian Alliance to End Homelessness and REALPAC, a national association of apartment investors, financiers and landlords — recognized they had shared interests.

To explore that common ground, they approached Mike Moffatt, one of Canada’s foremost experts on housing policy and a key leader in the partnership between Smart Prosperity and The Natural Step. “We were seen as a trusted third party. We understood the issues, but we didn’t have a preconceived position.” says Moffatt.

Finding consensus

In June 2023, Moffatt and his team brought together more than a dozen different representatives from industry, the social sector and academia to discuss how federal policies could create more rental housing — and make more of it affordable.

“We basically locked ourselves in a room for eight hours and said, okay, nobody leaves until we figure out how to solve this thing,” Moffatt recounts.

The process could have easily gone sideways, he said. Instead, participants found a surprising amount they agreed on, starting with the seriousness of the situation. Everyone in the room truly believed Canada is facing a crisis.

The next step was looking at the wide range of bottlenecks — from the lack of cross-sector coordination to lengthy approval times. Defining those issues allowed the group to then debate ways to address them. “We had difficult conversations, but nothing ever went off the rails,” Moffatt says. “We left the room with a general, very high-level consensus of what the solution should look like.”

That consensus laid the groundwork for a National Housing Accord published in August 2023, which was subsequently endorsed by more than 70 organizations across the country.

Informing federal action

The report provides a 10-point plan for bringing together public and private builders, the non-profit housing sector, investors and labour to address Canada’s rental shortage. Several of its recommendations found their way into the federal government’s fall economic statement, including eliminating the GST/HST on purpose-built rental housing and creating a catalogue of designs pre-approved by the CMHC to help fast-track construction.

That still leaves plenty more to do. But as Moffatt points out, Canada has successfully managed housing crises in the past — like the massive crunch following World War II. And that means we can do it again.

“Policy doesn’t change that quickly. And even when it does, homes take a while to get built,” he says. “But I’m cautiously optimistic that we are moving in the right direction.”

Giving office buildings a longer lease on life

In 2019, Integral Group wanted to set up a new office in downtown Calgary. But they didn’t want to put pressure on the municipal landfill. So when they fitted out their 68,000-square-foot space in the TELUS Sky tower, they got creative.

Instead of drywall, they used cladding made from discarded crates. Salvaged fir moulding was repurposed into baseboards. Window samples formed a stunning feature wall. The list goes on. As a result, the project produced zero waste at no extra cost, thanks to the savings on landfill and material fees.

Sustainable approaches like this are becoming increasingly crucial in the construction sector: the largest consumer of raw materials worldwide and the source of an estimated 40 per cent of urban solid waste. And there are important climate change implications as well, because harvesting and processing raw materials — from timber to cement — produces a significant volume of greenhouse gas (GHG) emissions.

“If we want to get to net zero, we actually have to think about the materials in our buildings and how we use them,” says Paul Shorthouse, managing director at Circular Economy Leadership Canada (CELC). “We don’t have to constantly extract new materials to build all the time.”

Partnering for circular insights

Partnerships are essential to better understanding the challenges and opportunities in the circular building space. CELC scoped out a project that brought together diverse players from across the construction and real estate value chain in order to explore the economic and carbon benefits that could come from extending the life of Canada’s 300 million square feet of office buildings.

“It wasn’t an easy task because a lot of this data doesn’t exist,” says Shorthouse. That’s where collaborations with CSA Group, industry, and federal government agencies — including the National Research Council and Natural Resources Canada — helped fill the gaps.

A consultant was hired to analyze different circular strategies, from extending the life of older buildings through adaptive reuse, to innovative leasing models, to exploring ways of minimizing construction waste by upcycling materials during renovation. Another consultant conducted lifecycle assessments (LCAs) comparing the carbon impact of retrofitting different types of office buildings versus demolishing them and replacing them with new energy-efficient buildings. (spoiler: retrofitting reduces GHG emissions in every scenario examined.)

Partnering with the Building Owner and Management Association (BOMA) Canada, builder EllisDon, commercial real estate firms including Hullmark and Jones Lang Lasalle (JLL), and other players across the value chain provided crucial insights.

In 2023, CELC published the findings in a first-of-its-kind Guide for the Real Estate Sector that quickly found a receptive audience.

Helping an industry hungry for solutions

Cutting carbon emissions is a priority across the industry. At the same time, the pandemic has fundamentally changed how we work, dramatically increasing office vacancies.

“The conditions are ripe for rethinking the use of our office building stock through upgrades, renovations, conversions and other creative forms of adaptive reuse,” CSA Group’s Ivica Karas told participants in a 2023 online webinar. “We just needed a catalyst. That is why we are very thankful to CELC.”

And as the report emphasizes, circular practices do more than reduce carbon emissions. Upgrading spaces to make them more energy-efficient leads to happier tenants and lower operating costs. Meanwhile, as the price of materials increases, renovating and repurposing buildings, rather than building from scratch, limits financial risks.

“The business case exists,” says JLL’s Hazel Sutton. “What we need to do now is just keep repeating it.” And not just for office buildings — but across the entire building sector and beyond.