Yes, Rezoning Can Help Reduce Homelessness

Rent and rental vacancy are key factors in rise and fall of homelessness. Rezoning can help.

by Inam Teja

As someone who works at an emergency shelter and affordable housing organization, I’m constantly confronted with the heartbreaking situations of people losing their homes. Housing is so foundational to our existence - the concept of “home” is what we typically build our lives around and housing is a human right for a reason.

I’m also someone who likes to focus on the big picture, which for my work means thinking about the inflows and outflows or people experiencing homelessness in our city.

Homelessness in Calgary, 1992-2022. Source: Calgary Foundation

Over the last decade, it looked like we were making strides in reducing homelessness in Calgary since adopting a more Housing First approach. But recently, we’ve run into a challenge - Housing First only works when we have housing. And even if you don’t subscribe to housing first principles, everyone agrees that we eventually need houses for people to move into!

When we consider the challenges of homelessness from an inflows and outflows perspective, you can see how a housing shortage doesn’t just hurt us by making it harder for people to find housing to exit homelessness, but it also creates challenges on the inflows side of the equation. Vibrant Communities Calgary estimated in 2021 that 350 people enter homelessness for the first time every month. Unless our homeless-serving sector is able to house 350+ people per month, then homelessness will continue to rise.

So with that in mind, how did we end up with a housing shortage?

It all starts with some trends:

• A rapidly increasing population (approximately 202,000 new Albertans in 2023)

• Household sizes are shrinking across Canada, so we now need more houses per person to meet demand. 

• Since the pandemic, people are using more residential space for home offices, requiring more rooms in a dwelling per person.

• Many seniors are choosing to age in single detached homes, meaning there are way more empty bedrooms. This means more houses per person are needed.

This trend is actually so intense that according to Canadian Mortgage and Housing Corporation economists, “in many of Canada’s large cities, seniors living alone or couples over age 75 are more likely than young families to live in single-family homes with three or more bedrooms.”

So the demand for housing has exceeded the supply - what does that mean?

The basic economics of supply and demand tells us that it means higher prices. We have certainly seen those in Calgary, with rents increasing around 40% between 2020 and 2023.

Intuitively, this makes sense: with more people filling rental applications landlords can choose the tenants they want (spoiler alert: they choose the tenants that will pay more and complain less). Where does that leave those without the means to pay more? Well, they try and move into a smaller and cheaper place along the housing continuum.

For example, a dual-income family who could previously afford a two-bedroom dwelling may now need to pool their incomes to share a single-bedroom unit, which could displace those trying to compete for that unit but only have one income. This effect continues to topple like dominoes until some of those people who are unable to compete resort to cohabiting with roommates, friends, family, or maybe they start sleeping in a camper or in their cars (or even worse, move back in with a violent ex-partner).

And if those options aren’t available, they can end up being one of the 350 Calgarians a month who enters homelessness for the first time every month.

When housing remains scarce and inaccessible at any point along this continuum, it is consistently the most marginalized who bear the brunt of the consequences.

While we notice this happening in Calgary, the correlation between housing supply shortages and homelessness is borne out in the data from other cities in North America. Two academics, Gregg Colbern and Clayton Page Aldern, sought out the answer to the question “why is homelessness more prevalent in some cities than others?” So they examined factors that could explain the difference in homeless population sizes among major cities and counties in the US including substance use, weather, mental illness, and poverty. They found that rent and rental vacancy rate were the two variables that were best able to explain why homelessness was higher in some cities than others. They wrote an aptly titled book about it called Homelessness is a Housing Problem that I recommend to anyone who wants a deep dive on this. 

So if low vacancy rates and high rents are the result of a housing shortage, what can we do about that?

We can start by building more housing! Every new housing unit built in our city reduces the number of people competing against each other for the rest of the homes that exist. The more we build, the closer we get to a scenario where landlords have to do things like maintain the quality of their units and keep rent prices low (imagine!) just to get a few applications.

Over the last 30 years, there have been a few years in Calgary’s history where our average rents actually dropped relative to inflation. Want to guess what went up right before the rents went down? Yup: it was our rental vacancy rate. 

The cool thing about this effect is that it happens regardless of the price/rent of new housing units, because as long as there is demand from a willing buyer/renter, that’s one less person with wealth submitting really generous rental applications for the units that the rest of us want.

The other cool thing about this effect is that it’s good for home buyers, but even better for renters. Research suggests that a 1% increase in housing supply results in a 1% decrease in home prices. Lots of finicky factors influence home prices (like interest rates, mortgage rules, construction costs, etc.), but rents are influenced by fewer variables, so the impact of new supply on rent is way larger.

In fact studies suggest that a mere 1% increase in overall housing supply can lead to an average rent decrease of 10%-30%! Even a quarter of that would be enormously helpful for Calgarian renters.

So we have to build more housing - how do we actually do that?

Governments have many policy tools at their disposal to help or hinder the building of more housing, but land use regulations are one of the most impactful. You may already know that on April 22nd, Calgary’s City Council is considering a proposal that changes our land use regulations to allow for up to four primary units (plus corresponding accessory dwellings) on the nearly two thirds of our residential land where you can currently only build single detached homes or duplexes.

This proposal to update the base residential district to allow for more housing density is not unprecedented. Cities like Aukland and Minneapolis have done this and both cities saw an increase in housing supply and (surprise, surprise!) a decrease in rents compared to peer cities that share the same macroeconomic environment but did not rezone. Connecting this back to homelessness, Minneapolis actually experienced a decline in homelessness since their city created more permissive zoning districts, despite the rest of the state of Minnesota at large seeing an increase in homelessness. 

To see a decrease in homelessness means that the inflows/outflows equation has reversed - people were broadly able to move into housing faster than they were losing their housing - hooray!

Is it really that easy?

I wish. We are still a ways off from flipping that inflows and outflows equation in Calgary, and this rezoning change alone won’t realistically get us there. Zoning is one barrier to the creation of more housing supply - another one that I worry about is around the bottlenecks in the actual construction process. The construction labour shortage is alarming, material and input costs keep rising, and housing just generally takes a long time to build.

Beyond a general lack of supply, Calgary has an acute lack of non-market housing. Only 3.6% of Calgary’s housing stock is non-market, which is below the national average and about half of the OECD and G7 averages - we are really lagging behind on this. Calgary has taken some positive steps to rectify this recently, but it’s going to take a ton more investment to even get us where we need to go. Non-market housing units medical supports, the ability to smudge indoors, wheelchair accessibility, that are pet-friendly, and have proximity to other services are so rare in our city, and we won’t be able to end homelessness without these kinds of housing options available - they are particularly critical to help end people’s experience of homelessness (the outflows side of the equation).

Thankfully, the city’s housing strategy includes specific actions to address these issues as well.

There are other innovative solutions out there that we should be examining further in Calgary - ideas like single-egress stair designs, modular housing, and pre-approved universal design templates. We ought to be considering everything that can help, instead of arguing for one thing over another.

Where does that leave us?

We can talk about supply vs. demand, inflows vs. outflows all day, but ultimately for me it all comes back to the universal basic right to housing. Our city — like many others — is in a situation where having a home isn’t the guarantee that it should be. As a city, we can start making choices to fix that and build a prosperous future, or we can decide to accept the status quo by plodding down ineffective policy pathways. Building a future takes hard work. It takes sending emails to our government officials, having tough conversations with the people around us, and maybe even speaking at a council meeting or two - ideally the one on April 22nd to support the rezoning changes. It will mean dealing with the inevitable growing pains of an expanding city and (hopefully) even welcoming more neighbours in our communities. 

I choose to believe in a future with more neighbours; a future where everyone has a home in my hometown.

Inam Teja has a master’s in public policy with distinction from the University of Oxford where they concentrated on housing policy. Inam recently published a policy paper on ‘Zoning for Affordability’ for the Calgary Drop-In Centre.