Could Canada’s underused public land be the key to solving the housing crisis?

by ketobasereview

Near Halifax’s downtown core, a shabby patch of land lounges in the middle of what urban planners call a “super block.” City staff looking for future housing have been coveting this parcel for a decade. It’s close to bus routes, connected to services, and large enough, by their calculations, to contain a cluster of towering apartment buildings, with green space to spare for the 4,000 people who could live in them.

Instead, this 14 acres of prime housing real estate hosts a one-storey Canada Post mail sorting depot, and a parking lot of trucks. The city has grown up, busy with new construction, while the block with the post office property languishes like the slacker neighbour who gets in the way while you’re trying to work.

This land, Halifax city senior planner Luc Ouellet said, could be vibrant and bustling. “It’s not performing to its potential.”

The Halifax property is just one among hundreds of pieces of underperforming urban land owned by the federal government – including large armouries with empty parking lots, aging post offices, and low-rise office buildings in high-storey streetscapes.

Housing experts have a term for properties like this – “lazy land.” For years, these parcels of public land have been sparking conversations about how they could be better utilized in a country stumbling through a housing crisis, but it was only recently that the federal government officially proposed leveraging them for affordable housing.

Meanwhile, no one has done an exhaustive survey of exactly how much federal land like this exists, or the amount of housing that could potentially be built on it.

So The Globe and Mail went searching.

Using the government’s federal registry of properties, The Globe identified federally-owned land that is at least half an acre in size, sitting vacant or occupied by a building not more than two storeys, and located in municipalities with at least 10,000 people.

After a months-long analysis, The Globe found 613 pieces of of lazy land in cities and towns across the country – a collection of federal real estate large enough to create about 288,000 housing units for nearly 750,000 Canadians. In addition, The Globe’s analysis also found 154 taller buildings close to housing that could be considered for residential conversions or development in their large parking lots.

For decades, Ottawa has either left this land underused, or quietly auctioned it off to the highest bidder to pay down debts and help balance budgets. But in response to the housing crisis, the government’s spring budget proposed a dramatic change of course: to put homes on “every possible” site of federal real estate.

Methodology: How The Globe identified underutilized public land across Canada

To achieve this goal, the government would stop selling off public land almost entirely and start leasing it long-term to non-profits, builders and communities that commit to delivering affordable housing. Cheap land reduces construction costs, and by controlling what kind of housing is built in an expensive market, the government hopes to spur projects that create more homes for low- and middle-income Canadians.

But currently, as budget documents made clear, the government doesn’t even have an accurate accounting of the land it owns, much less which lots would be cost-effective, or even possible, to use for housing. And this scale of development won’t happen quickly. It will require building on parking lots and lawns, demolishing or converting office buildings, post offices and armouries, and in-filling government-owned nooks and crannies in cities and towns across Canada.

All that can only happen after the current residents of the land – government departments, agencies and Crown corporations – either make room, or leave.

Canada Post, for instance, says it has no plans to move its sorting depot from the Halifax location. But as far as Ottawa is concerned, it’s still up for consideration. Housing Minister Sean Fraser told The Globe that the property merits a “significant discussion” with Canada Post and the city to identify how to maximize its public value.

“It’s an opportunity worth pursuing,” Mr. Fraser said.

Finalizing land sales has typically taken years, but the federal government has vowed to speed up the process up so leased public property can get shovel-ready sooner.

The details of how that will be accomplished are sparse. Ottawa’s own estimate is that it can redevelop enough federal, provincial and municipal land to build 250,000 affordable homes in the next seven years. But this assumes the buy-in of those same provinces and cities, and that the country has enough construction workers and dollars to pull it off.

It won’t be easy. But Mr. Fraser says the government wants to move as quickly as possible.

“The circumstance we are living through demands big ideas and new approaches.”

Ottawa’s $82-billion housing strategy is five years into its ten-year goal to improve housing affordability and reduce chronic homelessness by 50 per cent. More than half of the money has been allocated, with projects at various stages.

Yet even at the current rate of construction, the Canada Mortgage and Housing Corp. says the country’s population will need an additional 3.5-million homes by 2030 to restore housing affordability. Much of what’s being built now isn’t housing that’s affordable to Canadians with even moderate incomes – let alone the kind of subsidized rental units that are needed to solve homelessness.

That’s where, experts says, a truly motivated federal government could leverage the game-changing potential of public land.

When it comes to public land, the owner makes the rules, says Brian Doucet, an associate professor at the University of Waterloo, and the former Canada Research Chair in Urban Change and Social Inclusion.

A government with land can define what kind of housing gets built on it and who builds it, the cost of rent and who collects it, Dr. Doucet says. To build quickly, development on federally-owned land can sidestep some of the local bureaucracy that slows down so many affordable housing projects.

“We need to build the kind of housing that the market is unwilling or unable to build,” Dr. Doucet said. “The best place to do that is on public land.”

When it comes to this land, politicians talk about “unlocking” it as if they’ve just discovered the key to a long-lost treasure. But the most valuable housing asset that Canadians own has been lying fallow in plain sight in cities and towns across the country for decades.

In fact, a choice piece of property is sitting right in the backyard of the very people charged with solving Canada’s housing crisis: acres of underused land are nestled in the backyard of CMHC’s Ottawa headquarters at 700 Montreal Road.

The CMHC property is an excellent prospect for housing, says Rupert Campbell, a Vancouver urban planner who specializes in non-profit developments, and partnered with The Globe on its housing analysis.

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Rupert Campbell, an urban planner who specializes in non-profit developments, stands in front of a Canada Post office on Pine Street in Vancouver.Jennifer Gauthier/The Globe and Mail

In The Globe’s public land analysis, the CMHC property fits into the group of 154 federal properties with buildings above two storeys that are also located close to housing.

Many of these buildings, according to Jean-Yves Duclos, the Minister of Public Services and Procurement of Canada, were already only partially occupied even before the pandemic increased remote work for public servants, and may be good candidates to be converted into housing. Or, as The Globe’s research found, like the CMHC property, they often have land to spare, especially in large surface parking lots.

But when it comes to these properties, there’s an important caveat: not all this land will ultimately work for housing. Some of it may be more suitable for housing many years from now, as the government building ages and the character of the neighborhood changes. Also, adding a lot of new housing, even in residential areas, often requires costly infrastructure upgrades. Demolishing buildings increases costs; contaminated soil that needs to be cleaned up or environmental issues, such as removing asbestos or disposing of concrete, adds more.

Some of the land is home to heritage sites that communities may want to preserve. Some of the buildings will be ones the government wants to keep. Cities will want to weigh in on the choices, too. And once the land is officially offered up, said Mr. Campbell, at the current pace of development, “we’re likely talking years of process to even dig a hole.”

But making the most of this land is “a project for the next generation,” he said. “We are creating homes for our children.”

The largest urban federal landowner by area, not counting park land, is the Department of National Defence; the budget proposed that 1,400 new homes be built on military bases to house armed forces personnel. Those bases are located on large pieces of land, often with low-density buildings. For example, The Globe analysis identified 20 bases with lazy land near or adjacent to existing housing, totaling more than 65,000 acres. If 25 acres per site were hived off for housing, the land could potentially create 20,000 units of housing.


There’s nothing remarkable, at a glance, about public land number 16686 in the Directory of Federal Real Property.

The 26-acre rhomboid field at 530 Tremblay Road has been growing over alongside Ottawa’s Queensway highway since the federal government bought the land from the province in 2009. You can watch the fence weather on the Google street view timeline.

For 15 years, this land, ripe for development, was left idle while the country ran out of homes. Prospects for the property moved forward and then stalled. Plans for one government agency to occupy the space fell through. A mixed-use development proposal that included residential units and government office buildings presented to the community in 2019 has been in limbo since the pandemic, when a call for construction offers was withdrawn. Public Services and Procurement Canada says the property’s future is now being reconsidered in light of the government’s reduced office needs, but provided no timeline on a decision.

Meanwhile, a private residential project on an adjacent property has been delayed, because infrastructure upgrades hinge on the government finalizing its plans, says city councilor Marty Carr. And a promised pedestrian bridge across the highway to the new LRT station hasn’t been built.

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In addition to Tremblay Road, where Ottawa city councillor Marty Carr is standing, there are two other large underused federal properties awaiting development in her ward.Dave Chan/The Globe and Mail

This isn’t unusual. Surplus government land has often languished, left underused or even vacant, while trapped in a time-consuming approval process. The federal government has buildings that have been virtually empty for years, maintained at taxpayer expense. In addition to Tremblay Road, Ms. Carr says there are two other large underused federal properties in her ward, awaiting development for housing.

“The fact that the federal government sat on all these assets for so many years in prime locations like Tremblay Road is frustrating,” Ms. Carr said. “It has consequences beyond just office space for civil servants.”

When it comes to transforming land like this into a collective public good, Nicholas Gefucia recognizes the social value – and the business opportunity.

In 2019, the Bay Street lawyer went to work for EllisDon with the idea that the construction services company could play a role in ramping up affordable housing construction in Canada.

He’s the senior vice president of the community builders division, a group created to advise municipalities, non-profits and Indigenous groups proceeding with housing developments.

EllisDon, Mr. Gefucia points out, is in the business of managing and building large infrastructure projects – such as hospitals, jails and courthouses – and Canada’s housing shortage is a large-scale infrastructure problem.

“The current approach just does not bring us too close to the level of supply that is required across the country to meet the needs for all Canadians,” he said.

When people think of the government making land deals for affordable housing, they might imagine the social housing communities of the ’60s and ’70s, when low-income tenants were clustered together on a large, single site managed by an often inefficient or overly paternal bureaucracy.

That’s not the vision held today by most housing experts, including Mr. Gefucia, who instead describe an arms-distance role for governments and a more mixed-housing approach for non-profits.

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Nicholas Gefucia went to work for EllisDon’s community builders division in 2019 with the idea that the construction services company could play a role in ramping up affordable housing construction.Laura Proctor/The Globe and Mail

For one thing, as research shows, non-profits are more financially sustainable when they have market units to cover the cost of their affordable ones. In Europe, countries have had success with projects where one-third of the units are deeply affordable or subsidized housing, another third are rent-controlled for moderate-incomes, and the rest rent at market rates.

“It’s not like this kind of government housing is ugly. It’s not like it’s boring, or a waste of money,” said Carolyn Whitzman, an Ottawa-based housing consultant who has analyzed the potential of public land in Canada and Australia. Designed properly, she says, these developments become innovative, trendy communities where people want to live.

In Mr. Gefucia’s concept, Ottawa would lease the land, with conditions, to a public-private partnership, leave the construction to companies such as EllisDon, and the operation of the housing to capable non-profits. Everyone, including government, would be at the table from the beginning to build housing that the matches the needs of the community – such as more family-sized rentals instead of the smaller units common to many market developments.

Public land would remain in public hands, homes would be built more efficiently, and they would stay affordable for the long-term.

Mr. Duclos told The Globe that this was “an excellent model that we will pursue,” although he didn’t exclude other options, including deals with private developers, if affordability requirements are met.

What those requirements will be, the government has yet to say. But Mr. Fraser explained that the goal is to build not only low-income housing but also housing that is attainable to middle class families.

Specifically, he discussed partially occupied office buildings where workers could be moved into a single location, leaving the empty building available to be converted to housing – or build residential units on top of the low-storey building. While a significant portion of the developments will be rental housing, he said, Ottawa is also investigating a model of homeownership where residents buy the building but not the land.

Leasing land at low or no cost instead of selling, Mr. Fraser said, will allow the government to make more properties available while enabling more affordable housing than the private market can currently achieve.

For those skeptical of Ottawa playing a larger role in providing housing, Mr. Fraser said that is not the plan.

“This is not a scenario where the government is intending to significantly expand the bureaucracy to start managing thousands of properties,” he said. “Quite the contrary, we want to enter into long-term leases to put those who are expert in building and managing properties in charge of properties for a long time.”

This new approach to public lands comes at a time when private developers have made it increasingly clear that affordable housing is not economically feasible without significant government support – especially given escalating construction costs and high interest rates.

But land, on its own, is not the full solution. To make housing affordable, developers and non-profit housing groups say they will still need low-cost loans, and other financial relief – a reality both Mr. Duclos and Mr. Fraser acknowledge. Non-profit organizations, especially in smaller communities, may not have the experience and resources to manage complex developments. And like any real estate, public land may require work to become shovel ready, and an upgrade of city services before housing can be built. (In April, the federal government announced a new $6-billion fund to help municipalities, provinces and territories improve water, sewage and other infrastructure.)

These upfront expenses can overwhelm many non-profits, who will already need to increase staff and financial resources to take on large projects. “If I am offered land that is contaminated or needs a building to be demolished before I can use it, then it is not truly free,” said Stephen Bennett, chief executive of B.C.’s Affordable Housing Societies.

At the same time, unlocking more cheap land can allow for co-ordinated projects on multiple sites across a city, Mr. Gefucia suggests, creating economies of scale for developers. Scaling up saves on construction costs; a 2020 Harvard University study estimated that building more than 100 affordable rental apartments at one time can save up to 42 per cent of median unit costs.

And research suggests that discounted public land can achieve significant savings, especially in expensive cities. A 2019 consultant study for Metro Vancouver found that giving or leasing land for free saved roughly one quarter of the cost, while making the project non-profit meant rents could be reduced by nearly one third, and the development would still break even.

A 2014 housing analysis published by McKinsey and Company, an international management consulting firm, concluded that cheap land in costly housing markets was “the most critical step” to building affordable homes, one that could save as much as 23 per cent of total project costs.

Without low-cost land, social housing providers struggle to even break ground. “Right now,” said Julia Deans, president of Habitat for Humanity in Canada, “the single biggest constraint most affordable housing providers have is access to land.”

In next year’s election, Canadians will have a clear choice to decide the fate of public land. Unlike the Liberal plan, the Conservatives have proposed to continue with the current practice of selling, not leasing public land – by listing at least 15 per cent of federal buildings and “all acceptable land” for affordable housing.

The Liberal’s housing policy to date has mostly focused on increasing supply, mainly by helping private developers build as much housing as the market will bear as quickly as possible

Back in 2017, when Tyler Meredith was co-authoring the country’s new national housing strategy, this was the thinking around the table in the Prime Minister’s Office: increase supply and affordability would follow.

Ottawa had “lost the muscle,” for building homes, Mr. Meredith explains, after the federal government stopped funding community housing in the 1990s.

The idea was, “if we bring the cash, others will build it,” says Mr. Meredith, who left his position as lead economic advisor in the PMO in 2022 and is now a fellow at the Maytree Foundation, an anti-poverty think tank.

To be fair, he points out, cash was what everybody wanted.

The largest portion of the money in the housing strategy is focused on giving low-cost loans to private developers to build purpose-built rentals with loose affordability conditions. Land was an afterthought: until the April budget, the only program in the strategy that was specifically designed to provide discounted federal land for affordable housing was a $200-million fund spread out over 10 years – a relative pittance when compared to the strategy’s price tag of more than $82-billion.

As a result, the $51-billion committed so far in the strategy has primarily helped private developers build mostly market-rate housing, based on the idea that if you create enough new homes, the old ones will get cheaper. Economists call it “filtering,” the trickle-down theory of housing.

But the idea that building new homes for the relatively wealthy will, on its own, free up housing for the poor, has long been challenged by other researchers, and social housing experts.

“If anyone is using that argument now, they are out to lunch,” says Andrejs Skaburskis, a professor emeritus at Queen’s University’s department of geography and planning. In 2005, Dr. Skaburskis analyzed Canadian rental and housing prices from the census over several decades and found that filtering worked too slowly to be part of a government strategy to increase housing affordability for low-income people. Notably, his analysis found that the country had a serious shortage of affordable housing – and that was 20 years ago.

As people moved back into the city from the suburbs, Dr. Skaburskis said that heritage buildings and older neighbourhoods were no longer being vacated to make room for lower income Canadians – a trend that had made filtering work in the ’60s and ’70s. Instead, wealthier residents and real estate investors were moving in, renovating and gentrifying, and displacing the people living there. Today, an expensive housing market means fewer Canadian tenants, even those with above-average incomes, can afford the leap into homeownership to free up those lower-cost units.

That makes urban public land an important lever, experts argue, not only to build affordable housing in expensive parts of the city, but to grow back a balanced mix of housing stock.

“Governments can throw lots of money at that problem,” says Mr. Meredith, who now sees the use of public lands as an innovative way to save on cost while delivering lower rents. “That seems like a win-win for everybody.”

For decades, however, the government has been selling swaths of this valuable asset to the highest bidder, through its land-brokering Crown corporation, the Canada Lands Company.

Since the 1990s, massive amounts of public land were sold off with the privatization of CN Rail, Petro-Canada, air navigation system Nav Canada, mostly to private developers who built condos, office towers and warehouses. Half of all military bases were declared surplus between 1994 and 2000.

At the time, Heather Whiteside, a researcher at the University of Waterloo writes in a 2019 paper, government officials suggested that the military was “hoarding land” and spoke of using all that urban acreage for “public purposes,” such as social housing. In fact, she says, those former bases mostly became expensive subdivisions.

Many of these sales happened quietly, with little public accounting or attention, unless a community caught wind and protested.

The Canada Lands Company, for instance, does not publicly share the number of hectares or properties it has sold. The corporation only shares overall revenue generated from its real estate sales; in the past five years, according to the company’s financial reports, this amounts to $447-million.

Based on the government’s own data, affordable housing has rarely been pursued in those land sales – at least not at any sizable amount. In November, Mr. Duclos acknowledged at a press conference that three decades of Canada Lands deals had created only about 2,500 units of affordable housing across the country – about 85 homes a year.

Selling land outright also doesn’t protect affordability for future generations, says Dr. Whitzman, author of the forthcoming book Home Truths: Fixing Canada’s Housing Crisis. She points to what became known as the Victory Houses, which were built on public land in the decades after the Second World War, and sold for about $7,000, the equivalent of $91,000 today. Those Toronto-area homes can now sell for over a million dollars.

“It’s the land value that has gone bananas,” Dr. Whitzman says, “and it seems terribly wasteful for the government to put all of its resources into building these houses, and then not controlling the affordability past the sale.”

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Ottawa-based housing consultant Carolyn Whitzman says that, when designed properly, development built on public land with mixed levels of affordability can become trendy communities where people want to live.Dave Chan/The Globe and Mail

The federal government actually owns only a portion of the country’s urban public land. Canada’s cities contain vast tracts of lazy municipal and provincial property – parcels also getting renewed attention for their housing potential. For instance, the Toronto District School Board owns so much land – more than 600 properties, valued at roughly $20-billion – that it has its own land sales company.

According to a study conducted by the Housing Assessment Resource Tools group at the University of British Columbia, in the city of Ottawa alone, all three levels of government together own 567 acres of land moderately or well-located for affordable housing that meet The Globe’s lazy land definition, with buildings no higher than two storeys on a parcel at least half an acre. (HART used a similar approach to The Globe, but scored land based on proximity to amenities such as schools and parks, rather than proximity to housing.)

Some of this land will also face the environmental, cost, or community obstacles to development. But as James Connolly, an associate professor of urban studies at UBC and one of the lead researchers in HART’s public land study, observed, “Even if half of that land is off the table right away, you still have a lot of land to consider.”

Dr. Connolly, who also provided guidance for The Globe analysis, said the location and use of public land in Canada has too often been hidden behind paywalls, poor record-keeping and bureaucracy, making it impossible to consider them as a collective resource.

To make it possible for cities to ask for land, Ottawa has promised a more detailed list of its real estate by this fall, a step Dr. Connolly welcomes. “If we don’t understand the full possibilities, we can’t plan.”

Ultimately, Dr. Connolly says, optimizing the use of public land isn’t only about better city planning, and building more homes. Making collective use of this common resource is also about equity and fairness, and designing communities that serve everyone.

“There’s no new land coming,” said Dr. Connolly. “So let’s have that conversation together.”


Methodology

The Globe and Mail assessed nearly 2,000 pieces of Crown-owned land listed in the Directory of Federal Real Property as of February, 2024. We focused on parcels larger than half an acre in municipalities with at least 10,000 people. Land designated for uses such as prisons, airports and bridges, national parks, forestry and fisheries research were excluded, as well as most heritage sites (but not buildings) and museums. Using Google Maps, Google Earth and municipal zoning maps, we analyzed properties individually for proximity to housing, surrounding density and height of existing building. To estimate the potential amount of housing that could be built, we used a method created by Montage Development Consultants that calculated potential units based on land size, current use and density, accounting for commercial space and parking, as well as green space. The team also compared the results against several highly-regarded developments at different scales.

More details are available in the complete methodology.



Credits

  • Reporting by Erin Anderssen and Rachelle Younglai
  • Data analysis by Chen Wang and Erin Anderssen
  • Development and speculative renderings by Jeremy Agius
  • Aerial photography by Dean Casavechia
  • Editing by Micah Toub
  • Photo editing by Clare Vander Meersch
  • Satellite imagery by Google Earth, Landsat / Copernicus, Maxar Technologies, CES / Airbus
  • Housing analysis assistance by Rupert Campbell, Rudrasen Amol Sheorey and James Connolly

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