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Foreign.
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This is Abby and you are listening to Upzoned. Hey everyone, thanks for listening to another episode of Upzone to show where we take a big story from the news that touches the Strong Towns conversation each week. And we upzone it, we talk about it in depth. My name is Abby Newsham. I am a planner in Kansas City. And today I am joined by Norm Van Eeden Petersman, director of membership for Strong Towns. Norm, I love your name. So it's always fun to say.
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Yeah, you get to use the whole Alphabet. It's great.
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B
Yeah, absolutely. How are you doing?
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Hey, I'm doing really well. Yeah. Having a good day? Start a school back in action. I'm coaching soccer again this fall, so I'm looking forward to that. And about to head out to, as we record this to San Antonio to give a couple of presentations. So that's always fun to get down to San Antonio.
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B
Yeah, that's, that's fun. I, I, I've never been to San Antonio, but I've heard really good things. I've had family that have visited there for work and stuff and it looks like fun. Um, by the way, you're coaching soccer. Is this, what age soccer group is this?
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A
Yeah, it's U12, so my son is 10. So it's 10 year olds and 11 year olds. It's house league. So we, we get a whole range of kids and they're, they're mainly just trying to have fun and survive in the midst of the rain. That will certainly come this fall, but we get to play all the way till March and I grew up only being able to play, you know, when the grass was around. But we have turf fields and it's the, the Pacific Northwest, so we get to cope with the weather. So that'll be good. It teaches toughness.
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B
Yeah, yeah, it teaches toughness. Well, it's nice that you have the turf fields that, yeah, that'll be a lot of fun. Okay. So this week we are digging into a story that was published from the Globe that is entitled End users rather than investors expected are expected to drive Vancouver's housing the market higher. This was written by Carrie Gold and this is the Globe and Mail. So this article is basically highlighting a key shift in Canada's housing market which is focusing on end users, that's people that are actually buying homes to live in them. Which is interesting that there's a name for that now. They are increasingly driving demand rather than investors in Canada. For years, investors and speculators, particularly global investors and speculators, were shaping prices and activity throughout Canada and in major cities. And now the landscape is starting to look a little, a little bit differently there with higher borrowing costs and shifting expectations and changing government regulations. The market is starting to feel the influence of families and first time home buyers and individuals that are really just looking for a place to call home and not just an asset. So this raises a lot of very important questions. You know, what happens when housing is driven by quote unquote end users rather than investors? What does that do to affordability, the stability in the market, the kinds of places that we live in and build? And what does it mean for cities across North America broadly that are grappling with housing shortages and overheated markets? So Norm, you sent this article to me. I'm so curious, kind of from a strong town's perspective what, what you're thinking when you read this article about, about what's happening to our friends in the north.
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A
Yeah, thanks Abby. It's fascinating to me as an end user of a home.
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Yeah, me too. I'm also an end user.
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I'm give thought to the deeper sort of mechanics of how we've gotten into a situation where, you know, I was going out trying to find a rental and I was seeing places that were renting for $2,500 a month that as I walked in had visible mold in the stairwells. And I thought something is not right if this is what's available at these prices. And so as I was reflecting on the piece, what was interesting to me is from a strong towns perspective, we would say you need to look at hot cities like your San Francisco or Vancouver or some of these other places that have gone into the stratosphere in terms of their housing costs and ask the question, while the numbers might be extreme in those places, but many of those same sort of pressures are emerging in your own community as well. And so you may not be a destination for international capital in quite the way that Vancouver discovered that it had become one. Particularly there's a great book called Willful Blindness by Sam Cooper that outlines the role of like narco gangs and other groups that were involved in money laundering and using the Vancouver real estate market to basically wash folks funds through the ability for people to be able to take out a mortgage on a property using falsified documents. But then crucially, if they could make their payments on that mortgage for less than $10,000, it didn't get tracked in the same way that anti money laundering normally Tracks expenditures over $10,000 of transactions. And so there was this interesting Sort of supercharging of our system and it didn't work. Well, it sort of, you know, if you want to charge a battery slowly it'll, it'll gain charge but if you try to do it too fast, it'll blow up. And that's what happened to the Vancouver market. The question is how much of that affected some of these other major markets. But the downwind sort of consequences are severe in all sorts of other markets as well. So if all of these condos that were being built were not being lived in because they were being used for people to flip them, to turn around to use them just for the purposes of washing funds, they even would have very little interest in renting them because renting could potentially bring scrutiny. So they would sit empty and idle. And in that context you would then have fairly well paid Amazon employees that were moving up here for work. The people that work not in the warehouse but people that work in the coding side. And they were buying homes to be able to share them between a whole bunch of people because it wasn't worth it for them to, you know, an individual to live in a single condo. And so there was, you see this knock on consequence that really can step in and, and I think that is one of those things we want to be so alert to in our own housing markets.
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B
Yeah, I remember when I was a student in school there was a class where we were actually, we spent a couple class class periods studying what was happening to the housing market in Canada. And if I remember correctly, another layer to that was that they government was intentionally attracting foreign investment and kind of, you know, if you had a certain net worth or a certain amount of money that you would pay or invest that people could, could move to Canada from other countries. And so it was attracting a lot of wealth, particularly from places like China, but you know, other countries as well. And of course that's going to inflate. I mean it's like global gentrification essentially to your cities. And it is really interesting now that that is starting to be reversed. The article mentions that the government has stepped in. They have more rules around, you know, how, how long you need to hold a property before you can sell it. You know, otherwise you have to pay some really hefty taxes. There's, you know, in addition to just all the macroeconomic changes that have occurred with interest rates and just the cost of money, there's a lot the government is stepping in intentionally and trying to shift things away from where it's gotten. And I think the question is what does that do to the kind of financialized system of housing in Canada and more broadly? And is it the same as what would happen in North America or I'm sorry, the United States, if that were to happen?
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I really think that there's a few things that protect many markets if they're not sort of in the global sort of network of core cities that people identify as soft havens for foreign capital to come into. Certainly things like retail, or not retail, but real estate visas where if you commit upfront to a pre sale that funds the development of another tower in a major city that then you get access to citizenship. The United States has been a lot more careful about that though. There certainly are paths for people with funds to be able to step in. But the other thing that stands out to me is that a lot of what we need to really bring the focus to is that work to legalize small, legalize like small scale development is interesting because it, we have recognized it does not benefit from some of the high volumes of capital that are available. Lending rates tend to be higher because you're not, you know, going in on a $600 million project or you know, whatever the scope of how big these massive projects are. But those massive, massive projects to build out towers and stuff also come with a whole series of buttons that sometimes get pushed. And those are the ones that trigger really nasty things, really bad things like capturing way too much of tax credits so that there's little left for everybody else, carving off all sorts of weird financial transfers that are being masked through the real estate system. And so I don't know enough about things like beneficial owner registries and things like that in the United States to be able to say that you're immune from it. I suspect there is this going on. It just didn't reach the crescendo that it has in, in Vancouver as an example. But we saw this also in Toronto, another major market, where the amount of flipping on pre sales, and I'm not sure if in Kansas City, if they do pre sales where you can say I will put down a deposit and then I will pay an agreed upon amount for, for my unit the moment that it's ready. That can be a great way to fund development. Someone that upfront commits money with a deposit and what they were then doing, and many people were putting 80,000, $90,000 borrowing from family members. Because if you were middle class or trying to join in, your pathway in was you buy the pre sale and then you wait a few months, you flip it and you Basically take your 16, 20, 40,000 because the idea was this train only goes upwards. The consequence of that is if the investment is actually about the flip rather than about the unit, you're going to care a lot less about what that unit is like. It's just a unit. And this is where to me the language that we use really matters. Do we talk about homes? How many homes are in that tower? No, it's how many units are in that tower. It's how many commodity sort of exchangeable units do we have? And that can be that, that trouble that develops quite quickly. So the pre Sale flipping, the B.C. government cracked down on that. The federal government said you need to actually pay taxes on any of your windfall. All of a sudden a lot of people got cold feet with that. We're also seeing now that a lot of people that bought expecting to flip can't find anybody to flip to because of some of the things that have stepped in the way and now they're stuck. And on the one hand I, I understand if you're out 80 grand and you'll never recover from that because that was never your money to begin with. You're, you're in a tough spot. But the game was bad to start with. And that warning, there's no quick easy money should have been heated a lot earlier. So one of the core things that the B.C. government introduced was the foreign buyers tax. So if you are outside of Canada and you want to buy in Canada, in our air, in our markets, you have to pay extra. New Zealand, did this other place have done this. We talk about policies that can begin to tamp down the viability or sort of the, the attractiveness of this for institutional investing. These are some of those tools that can be really helpful for this. Even while allowing that we do want institutional investors that are stable pension funds, others to buy additional, you know, many units, make them available for rent. I need somebody who is an investor so I can live in their home. Like we, we sometimes vilify like oh, multifamily units are all owned by BlackRock. It's like well no. But also like if they are holding it as a lasting financial asset, it means you're going to have decent housing security, you'll have security of tenure, you won't get booted. The moment that another flip happens and yet another change of ownership occurs and then the tax that they had of the anti flipping tax I think is also suggestive that for a while we were like doing, you know, hgtv flipping was you know, a hot thing and it was a great path to, you know, double your income until we realized this is not helping and we needed to step back from them.
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Yeah, it makes me think about just the impact of money and movement of money from all over the place into local markets and how that in many ways is. It's really invisible to people, although there's impacts that will pop up that are not as clearly connected to the money itself. And I think that it's. It's almost hard to imagine what a market looks like when it's actually, actually driven by locals. If outside investors are just, you know, not really coming in, flipping or speculating. Holding land in Kansas City, where I'm from, that's definitely something that we're faced with. It's nowhere near what we see in Canada, but we do have a lot of impact that is caused by speculators and out of state investors that buy and hold property. And I kind of wonder, if that were not the case, what would the market look like locally in terms of actual locals participating in improving, renovating properties? Would there be more people that are keen to enter that market to fill in the gaps or. I don't know, it's just, it's interesting to imagine what that actually might look like.
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Yeah, and your comment reminds me that if we identify that people buying and holding property in our communities and just sitting on it is harming our communities and we recognize that the drain on vitality that that can present, one of the ways that we could address that would be by taxing the land more and not necessarily putting all of the tax on the improvements. But even if we ever got to that point, what this article is describing in Vancouver is what happens when the next stage of buy and hold kicks in of newly constructed homes that are not being used for that purpose, that language, you know, not being intended for the end user, but instead as an investment product. And so it certainly underscores, you know, the claims and the argument that Chuck and Daniel make in the housing trap book, but it really touches on the idea, like there's a cautionary tale here that things like an anti flipping tax requiring that your ownership actually have a name, not just a numbered company on the registry or of who owns this, so you can actually trace and track what is going on with the properties in your system, that they're not just sort of flushing through and recognizing that if we can keep down that in a sense the volume of repeatable, predictable patterns, you actually allow it to just be about housing. And it's one of those things that Chuck talks in the book that like when it becomes too predictable and then the quants can move in. If it's a machine and you can just figure out how to nudge a few decimals around and make millions, you're going to, you're going to be inclined to do that. And we see this in the Vancouver example. You know, in many large cities are grappling. We've got towers with no people in them, which on the one hand means property taxes without somebody using a, you know, a rowing machine at the gym. But when we think, is this going to contribute to the lasting vitality, it's the equivalent of that buy and hold property speculator who never shows up to the community barbecue, never employs anybody locally, doesn't, you know, do anything. And as a result, if we allow just for the sustained pattern of not doing anything, we see that the impact that it has on our places and, and you know, then my hat is off to everybody that's trying to do something. You know, I think of, you know, Monty Anderson or Neal Haller or others in our network, they can look in the eye of the person they're borrowing money from to collaboratively do a project with all those participants, all have a hand in it. I'm like, that's what gets me energized. Not some big grand unveiling that all of a sudden completely upends our market, but just the slow, careful. Well, not even so much slow, methodical process of building out capacity where we live.
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B
Yeah, absolutely. And that's where, I mean, just thinking of large towers that are empty, that yes, are paying property taxes, but they're not adding anything else. I think that that gets to the point of we talk about value per acre and having productive cities and the importance of having a fiscally potent city that can support its infrastructure. But it does get beyond that point of, of the numbers. And you know, you want to have people in your city as well. You don't want to just have a dysfunctional market of towers that don't actually have people in them using them at that point. It doesn't, it's not really much of a city, is it? If that's, that's really very dysfunctional. And so this shift in Canada is, I think, really notable because it is shifting, shifting things back to, you know, quote, unquote, end user. You said words are important. And I just think it's really, it's, it's strange that that's, that's a word that we're using for like the people who are kind of intended to use the housing that, that, that's like a technical term here, but it does, it does kind of make you wonder about what the impact will be on the broader housing market because our markets really have been set up to work when investors are piling in and adding money into the system and when transactions are happening. And obviously that's a sign of a system that is dysfunctional and not really aligned with historically how housing markets were supposed to be set up. They were supposed to serve families and workers and everyday people and support the, the viability of our cities. But really now everything's so financialized. So it does make you wonder about what that means for Canadians or Canada's housing market and you know, the Canadian pivot to being more focused on the end users, which I think is the right, the right thing. But what, how does that impact the broader market? And will, will it cause the financialized system to break?
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Yeah, and we're seeing those signs. I think our federal government is doing everything it can to prevent the breakage because it knows how bad it could be. So that looks like making sure that interest rates still aren't actually being used to fully address inflation, instead just managing them to try to not allow a market to just begin to collapse. And, and this is the struggle that we have. You know, there's a quote here in the article from the author. Uh, it's the places that are livable right now, for lack of a better word, that are in demand and not those that are driven by investors. And, and that's telling that there's this fragility that's built into our system. And, and I can share a quick anecdote. My son's school is they are ahead of schedule on completing the expansion, a four classroom expansion to add more capacity to the school. One of the core reasons why is the contractor was able to bring in all of the trades much sooner and actually at lower costs than at first we expected because most of our large projects have either been paused or being slow walked to basically manage capital really carefully. And most of the sales, they're halting them because they are concerned that even if they build it, they're going to be selling at prices that they previously didn't expect. And this is the struggle that we have is that when we ride that roller coaster going up, we think, wow, our city is growing. But if you get hooked on that kind of money on those types of massive projects, the struggle is like the collapse is real. And I don't know how soon that collapse occurs. There are more and more warning signs on both sides of the border. The question is, will that collapse the entire market or will you see these islands of, hey, that's actually a home that somebody can live in, so that's going to sell and continue to be exchanged as value. But a lot of people are sitting on their checkbooks right now, and that's making the whole real estate market, which is transaction driven, so their incentives are just to keep transactions flowing. And the development industry, which is also transaction flowing, especially when you don't even care so much about what the quality of the end user's experience in that unit is. Um, that is. That's very different. And so I. I don't know about you, Abby, but I. I find I sit in my place, I'm like, I know what it costs me to rent here, but like this, this is way bigger than me and trying to then grapple, like. So when we say if we allow just a few coach houses to be built in people's backyards, that that will make a difference for individuals. And then when we allow a few cottages to pop up in places where they didn't previously belong, like, that is addressing it in the other way. And it's steady. It's. It's actually a bit more predictable because we know if somebody has done one project, they're likely to take on another project unless we made it so hard for them to do. And this is, you know, to me, my passion is like, how do we get out of the way of the very things that we want to see? How do we. How do we stop making it so difficult? And I can't remember who the council member was in our region who asked one project, a smaller project developer said, I'm going to walk. Can I attend every meeting that you have with my city, with the staff? And they basically went every time that they had a meeting, whether it was at the counter or whether it was behind the counter with the planning director, whomever, they just sat in and they couldn't believe the labyrinth, the uncertainty. And this was a city that was trying to get it right. And the council member said, but we're still tripping over ourselves in finding new and novel ways to mess up people's projects. And so this council member ultimately then said, and I can't vote in favor of your project, or, you know, I won't vote on it because I've been vested in what you're doing. But then I. That is speaking to some of the things that Edward Erford talks about with various cities is actually go through your process, take a look at it. It's not just cut the red tape because you need to know what is a red flag which warns against quality problems and what's red tape which is just necessarily snarling people. But we need to get used to the idea that we can build just simple structures again and that it doesn't matter too much if it's already in places that we've set aside for housing, that it should go there. Rather than the idea that like, well, to meet our provincial housing targets in the province of B.C. we have housing targets for each city that has been slow in building enough capacity. And my city council members see it, they're like, yeah, Norm, we can either approve 1500 units right away in a tower or we can try to find 1500 small scale developers. But like, we're just not seeing those applications come in. And I said, I know why that's happened because you made it so difficult to build a cottage. We have a tiny home manufacturer in our community who builds amazing mint tiny homes. They're beautiful. You're not allowed to use them in our community because our zoning forbids that very thing. And I'm like, we could get there, but the difficulty is now that 1500 unit tower that we approved, it's not getting built because of financing. So I'm like, we're still not getting the things, you know, we went all in on. Let's get bigger.
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B
The big, the big project. Yeah. And the thing is, you know, when it comes to small development and trying to make that happen, that just doesn't happen through, you know, big annual targets and top down policies and programs. Because you need to have a market of people who are doing this kind of work. You may have the one person in town that has a company doing tiny homes and can barely get a couple of done because, because of red tape and that they're not allowed to actually build them. But if, if it were easy to do those types of structures, you would not only have this person doing more of them, but you would get competition. More people would start doing it. I mean people generally, business grows around markets that are, you know, profitable and, and you know, where you can actually make things happen. I mean, that's why incremental development, small scale development is such a niche kind of thing to do. And it's not something that people are flocking to go do. It's, it's people who care and are mission driven really. And I think that that's, that's one of the things that it Takes patience. Even if you legalize things and make it easier and cut red tape, it. It takes patience to build up a culture of people that build in a certain way. Like, it just takes a very long time. It doesn't happen overnight. And I don't think that, that, I don't think that way of thinking about things is really well aligned with like, whatever the program of the day is for a city and it's driven by a city council person and they want to see results. You know, it's, it's not. It could take a decade, it could take longer to actually build up the individuals, the people, the ecosystem that makes this a viable way of building. I just don't think that that is, for certain people, that that is not good enough.
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And if you can head off the dysfunction that Vancouver has experienced by doing those types of reforms now, I think that's the best time to get at it. Right. Like, this is the, you know, that shift that all of these cautionary tales from these, these out of whack cities should be the thing that then gives added confidence. Yeah, we got to do this rather than, you know, we were down in doing presentations with Urban 3 in Utah and it was amazing to hear the community leaders from really small towns describing their housing crisis. And it just baffled me because I said, how, how is it possible that you also have a housing crisis? But it was severe because they said the inflow of people into our state with opportunities created by the industries that we want and the jobs that we want to see created, are now contributing to either existing residents being priced out or existing residents just not being able to find anything that suits their needs as well as all the new incomers saying, I'm going to have to settle for something or I'm going in. But I wish that I could have done something different. I wish that I could have built, but it wasn't worth it. I wish that I could have, you know, set up a simple arrangement for myself. And so that is, I think, the warning that this is severe. I'm going to be up in Northern Michigan delivering a talk at the Housing North Summit, Traverse City. That's a long ways away from sort of the centers of global capital, and yet they're struggling with a housing crisis. And so I hope that, you know, Strong Town's ideas and approaches can really help to seed the ground for just doing what we can right now, even if we know that it's not, you know, gonna magically sort of turn it around overnight. And so patience. But it's costly Right now?
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B
Yeah, it's, it's tough. And I mean, as Chuck often says, predicaments have outcomes. Right? I mean, this is, this is a situation where I agree with you. I work with communities, rich and poor, big and small, all different regions of the country. And everybody has some version of the housing crisis occurring in their community in every context. And it's really fascinating to hear different perspectives of how housing is impacting people. But there's no doubt that, I mean, I've now, I have yet to work with any community that says that they don't have some kind of housing crisis going on. And, and some of it is financial, but some of it is also just physical, like the physical type of housing that people need and generational changes, demographic changes. It's, there's just a lot of change happening right now, not just with, you know, generations changing. Right. We have the boomers that are phasing out and retiring and you know, millennials are becoming the middle aged people. I mean, we have all these changes happening there, but people are also moving around, especially post Covid. And so with that change, it's creating all kinds of pressure in addition to just these bigger kind of macroeconomic challenges that we often talk about on this show. And, and you know, certainly relevant in Vancouver and in Canada with, with foreign investment as well.
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A
And you know, I mentioned the HGTV like flipping craze and if I come back to that, you know, the idea that, you know, there's a one to two year cooldown before you're allowed to like turn around that property, otherwise you're going to get a significant tax on it. If flipping had included making it a duplex, making it a triplex with a backyard cottage, if it was more than just we put in granite countertops and you know, some daylilies that are going to wilt the moment that, you know, the TV camera turns off. Like, if, if that flip involved what we would describe as like taking that next step towards that next increment of development, we would have been fueling a trend that would have been really valuable. And maybe what we need is, you know, incremental development alliance, you know, inking deals with, with Viacom to be front and center as like this new trend sweeping the nation.
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B
Imagine, I would love that. The thing is, it's fun to make fun of the house flipping shows, but I'm not as mad at the house flipping shows as many people get because it is just like individuals and I understand it's like a lot of the times they're Just doing an open concept and putting countertops in. South park has a great episode about house flipping, but it's. It is. I. I'm less inclined to, you know, point the finger at them, but they are trying to do incremental development. If there was some more mission alignment to what they're doing, like you said, if they're, you know, renovating a duplex or building a backyard cottage, I think that would be a really cool story that people would actually be interested in seeing kind of neighborhood based development, local based development, and highlighting that and making it a trend. I love that idea. Should we. Do we have any people from HGTV who listen to this?
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That's right. We need a producer. But. But imagine that producer. So say 10 years ago when it was in the. I think if I'm dating myself, right, that about when it was really big. Then at that point. Yeah. Imagine going to the producer and saying, like, all right, we just got the keys. And it's like, all right, I sent the camera crew and, you know, heartwarming, like, you just bought it. I just submitted my application to the city to turn it into a triplex. Okay, great, let's film that.
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B
Yeah. And then it becomes very dramatic. And then it's a reality show.
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A
So you're saying that they haven't reviewed your plans? No, not yet. We'll get back to you. So you're saying that they had some trouble with where your fence line, you know, or your setback, all of these things. So you're saying that you're having to cut down every single tree because there's a rigid setback rather than sort of a general setback requirement. So. So you're still. Oh, you still have to go to a property, meet the planning and zoning commission. So you still. And all of those steps along the way. And they're like, but none of this is good for camera. We just want to see a sledgehammer. And you're like, oh, producer, wait. Because we won't get to the sledgehammer stage until ages from now. There's a reason nobody was doing it. So when we talk about housing ready cities, it's housing ready or sort of flip ready cities. In one way. We could say, because you're saying we're getting you. So that that producer says, whoa, there's action every week. If that is our standard for our building trades in our community. That, like, there's action every week. This is, you know, Chuck will use a somewhat romanticized idea of like, walk in at 9am with a ninth grade education and by noon you leave with your development permit to build up the next increment. That's, that's HTTP ready like that is. You didn't pay, have to pay a camera crew very long to be there. So hey, if you're a producer, help us identify on the housing ready cities, map the places you should go and we'll get you in touch. It'll be the newest hottest thing.
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B
I love that. Okay, well, hopefully we get some at least credit at the end when they roll the end credits. We get some notoriety when they air this show. That's a great idea. That would actually be really fun to watch and I think even with permitting and all the hurdles that that small scale developers have to jump over, I think there would be a lot of fun drama to watch.
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A
Right? Yeah, yeah. And rapid aging, but that's the other challenge.
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B
Rapid aging. Yeah. Suddenly it's like their hair is grayer than it was in the first episode.
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A
Yeah, yeah.
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B
Awesome. Well, I think we can leave it there. I appreciate you bringing this story to me and you know, but we'll have to keep an eye on the Canadian housing market and see what happens next here.
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A
Yeah, I would love to.
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B
All right, well, before we wrap up, it is time for the down zone, which is the part of the show where we can share anything that we have been up to these days, anything that's been taking up our time and attention. Norm, what do you have for me today?
- [36:03]
A
I have a book. So the book is you'll pay for this. How we can afford a Great City for everyone Forever. And it's by Michelle Durand Wood, who is my brother in law. Full disclosure, but it is a fantastic book. If you are interested in just sharing Strong Town's ideas with somebody, but you know that they're either not going to read a book or they are just like put off by the whole topic. There are throughout the whole thing. You're going to laugh and uh, it's written in a very sort of not whimsical way. But like if you've ever read Mitch's work on the Dear Winnipeg blog, he uses humor and sort of weaves that in and, and walks you through how it is that we've gotten into the situation that we've gotten ourselves into in terms of the long term financial outlook for our cities, especially looking at the city of Winnipeg, starting with the question like, why is it that our parks used to have gardeners in them and now we can't even afford to turn on the fountain? How did we go from Having the capacity to do things to not. And the biggest insight to me that I would love people to pick up is that the funds that you allocate in your capital budget are just future operating budgets. So anything that you say, we're putting that in our capital budget for future years. That just means when you get to that year, you're going to be paying for it. And so that is, you know, obviously part of our long term planning. But we've made it so that every year you balance the budget, but you do so by taking out of either future years budgets or by taking out of previous year's budgets where you kept a little bit in reserve. And in our places where we've not kept money in reserve, every time that we make a commitment, we're basically withdrawing future funds. And it's one of the best ways of demonstrating the intergenerational dine in dash that we find ourselves in. So definitely check it out. It's. You'll pay for this. How we can afford a great city for everyone forever. It's very strong towns. Definitely recommend it.
- [38:02]
B
I love that. And I love, I love the dine and dash way of thinking about it. Yeah, that's great. Well, you know, for me, I've just been. Life has been very busy these days. I am happy to announce that right now I am sitting in a finished small renovation project of my home. And it's finally clean and not filled with tools and equipment. And I painted over the weekend. So everything in this part of the house is like perfectly the way I want it. So that is what I can report is just finally finishing this project that has been going on for the last several weeks and getting to have a little desk space that I'm at right now that is free of dust.
- [38:51]
A
Congrats. That's awesome. And have you put a ceremonial like first dent in anywhere? Just to say, all right, I'm going to put that first dent in. So that way then I don't have to worry when the next one comes.
- [39:02]
B
No, I haven't. But I'm not too precious about it. So eventually I'll definitely, I'll definitely create dents here and there. But I did hang up a picture. So I've got a hole in a wall that.
- [39:16]
A
There you go.
- [39:16]
B
Had no holes in it. Now, now it's ruined.
- [39:20]
A
It's lived in. That's. That's the key.
- [39:22]
B
Lived in, Absolutely. Yep. Then this is not even the end. I have more, more work that will be happening, but for now it's peaceful.
- [39:32]
A
I love it. Yeah.
- [39:33]
B
Yeah.
- [39:33]
A
A little bit of relief from the noise. That'll be the best.
- [39:36]
B
Yeah. Yes, exactly. And my. My pets are happy about the quiet as well.
- [39:42]
A
Yeah.
- [39:44]
B
Okay. Well, hey, thanks, Norm. I appreciate you joining me today. And thank you everyone, for listening to another episode of Upzoned. Thanks, Norm. Bye.
- [39:57]
A
This episode was produced by Strong Towns, a non profit movement for building financially resilient communities. If we. What you heard today matters to you, deepen your connection by becoming a Strong towns member@strongtowns.org membership.