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Too much has changed in the last 80 years to suggest that the blueprints of the past can still work today
Published on December 25, 2023 • Last updated 2 days ago • 4 minutes reading time
A construction worker works on a house in a new housing development in Oakville, Ontario. Photo by Richard Buchan/The Canadian Press Files
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The deepening housing crisis has led Canada's federal government to invoke wartime rhetoric and adopt construction strategies from a bygone era used to house returning World War II veterans, but perhaps too much has changed in the last 80 years , to draw conclusions about the blueprints of the past can deliver today.
Housing Minister Sean Fraser recently announced the federal government will release a catalog of pre-approved building designs and construction plans for developers to speed up the construction process. In doing so, he draws on an 80-year-old example of postwar construction efforts to mass produce housing for war-weary veterans returning from a war in Europe that had left them financially and physically ruined. Many of these houses built after the war still stand, but are increasingly being converted into or replaced by newer and larger apartments.
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The government believes that what worked seven decades ago will work today. But his optimism is somewhat misplaced, considering that ongoing massive social and economic changes will make older recipes less relevant and effective today. Furthermore, the housing plans of the 1950s did not work as smoothly as the government likes to believe.
At least in theory, the government's plans are a step in the right direction. The aim is to develop a catalog of building designs of various types in consultation with industry and most likely local planning authorities. The result will be standardized housing designs, the approval of which will be shortened by reducing bureaucracy and the construction time will be shortened.
But what works in theory may only work sometimes in practice. Consider that the real real estate boom in Canada occurred in the 1970s, when construction began on nearly 2.5 million homes, the highest in a decade since the early 1920s. This boom was not due to pre-approved catalogues, but rather to a whole series of initiatives to mobilize developers, investors and lenders, supported by the government. Most purpose-built rental apartments today date from the late 1960s and early 1970s.
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The volume of housing construction in the post-war period was significantly lower than the volume of housing construction in the 1970s. While almost 2.5 million apartments were built in the 1970s, only 500,000 were built in the 1940s and around 1.1 million in the 1950s.
Another critical misunderstanding is the assumption that construction only began after the end of the war, which is not true. The government sponsored the construction of thousands of rental houses during World War II to house workers building munitions for the war effort. To accommodate these workers, more than 20,000 units were built, primarily as rental units. After the war, workers were given the opportunity to buy these houses.
The cultural, demographic, financial, and spatial differences between today and the mid-1940s are significant and may limit the utility of cataloged designs in triggering a construction boom. For example, local governments in the 1950s had fewer powers than they do today. The municipalities were small in size, budget and scope. They were willing to accept state-approved designs because most municipalities did not have enough staff to handle the complexity and volume.
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Land was also readily available within and around core communities. Many homes were built on undeveloped land with septic tanks and well water. NIMBYs had not yet been born and had not formed supply-limiting alliances with municipal representatives. Veterans and new European immigrants provided plentiful construction workers. However, the financing problems remained.
Equally important, consumer tastes in the '40s and '50s had not yet evolved, and buyers drove from one open house to the next to find the ideal home in a chic neighborhood. The designs pre-approved today are likely to be simple homes that can be built quickly and cheaply. The challenge for builders of cataloged homes will be to find buyers and tenants whose elegant living ideals can be limited to small, simple apartments.
The federal government intends to consult relevant stakeholders next year and publish the cataloged plans by the end of the year. This requires building consensus on designs and specifications between builders, developers and municipal regulators. The provinces also have to participate. The catalogs are expected to be available in 2025 and construction could begin after that.
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The next federal election is planned for October 2025. The date could be postponed if the current government or its leadership no longer enjoys the trust of Parliament. When Canadians go to the polls in 2025, housing will likely remain a hot, if not the most important, issue.
Housing starts fell 22 percent in November compared to the previous month, suggesting that housing construction is still not picking up steam despite the government's rhetoric. Increased borrowing costs and excessive development fees are just two of many hurdles that cataloged building plans may not overcome.
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“The difficulty lies not so much in developing new ideas as in escaping old ideas,” John Maynard Keynes once remarked. Although marked by historic successes, the government's planned catalogs must be complemented by contemporary solutions to meet the unique needs of our time.
Murtaza Haider is director of Regionomics Inc., a consulting firm specializing in predictive analytics and machine learning. Stephen Moranis is a real estate industry veteran. They can be accessed on the Haider-Moranis Bulletin website at www.hmbulletin.com.
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