All that began to change in the 1950s in Puerto Rico, when legislators there enacted the first condo laws in response to chronic housing shortages. The idea of horizontal ownership – aka strata – spread rapidly, first to Utah, then many other U.S. states, and eventually Canada in the late 1960s. Legal recognition unlocked consumer interest, especially among lower-income households, as well as mortgages and capital for new projects.

In the early 1960s, many people in the United States did not know how to pronounce the word “condominium,” but by 1972 three out of four people knew the term, the scholar Donna Bennett observed in a 2011 paper in Law Library Journal. Today, there are about 7.4 million condos in the United States, accounting for 6% of all homes. In Canada, the proportion is far greater: 15% nationally, and even higher in cities like Vancouver (32.8% of all dwellings), Calgary and Toronto (both just under 24%).

The appeal acknowledges that most people prefer to own a home rather than rent an apartment. In a growing number of cities, the flow of capital for conventional apartment building projects began to thin in the 1980s, while demand for condo apartments expanded. In some markets, like Vancouver and Toronto, the condo model, which promised developers fast returns, came to dominate the purpose-built rental sector. Conventional private apartment complexes were sustained by rental income as opposed to the sales of individual units, and the landlords had to contend with all the headaches that come with managing large properties. The swap took about three decades, with the condo – both owner-occupied and those acquired by small-time investors – emerging in some markets as the undisputed winner in the competition for real-estate-bound investment capital.

I see it as a structural reset and a return to fundamentals.

– Brandon Donnelly, founder, Globizen Group

Such was the case until about the last year or so. Today, in many big cities like Toronto and Vancouver, as well as metros in Florida, Texas and California, the condo market is either way down or comatose. Developers can’t pre-sell new units, so they can’t secure construction loans, so their projects are iced, scrapped or converted into conventional apartment buildings.

Despite these convulsions, housing affordability continues to erode, not just in Canada and the United States, but also in the supposed housing havens in large European cities – with a few exceptions, such as Vienna, where the Austrian government heavily subsidizes rentals.

The blinding speed of the condo market’s collapse – evidence of a speculative bubble just waiting to burst – raises intriguing questions: Is the condo business model dead? And if so, what will replace it? After all, demand for more housing, and affordable housing in particular, hasn’t gone away, and someone’s eventually going to figure out how to meet all that need.

A changing narrative

Most condo industry leaders are in a white-hot panic about the collapsing market, but some have begun to acknowledge that the current condo business model is done, and not just in a cyclical funk. “I see it as a structural reset and a return to fundamentals,” says Globizen Group founder Brandon Donnelly, an Ontario developer.

In recent years, in frothy markets fuelled by financialization, developers marketed ever-smaller units in ever-larger towers to mom-and-pop investors who reckoned they’d make money in two ways: renting out the units as income properties and then selling them for a capital gain; or buying “pre-sale” units by making a five-figure down payment, waiting for the market price to rise, and then flipping them for a quick profit.

“The reason we had this big surge of condo development had to do with the fact that land zoned for high-density residential earned a greater return for condos than purpose-built rental,” says economist and planner David Amborski, director of Toronto Metropolitan University’s Centre for Urban Research and Land Development. “Basically, there was an investor opportunity on the condo side to buy these [units] and rent them.”

Cooperative housing is making a comeback

When interest rates plunged after the 2008 credit crisis, a gold-rush mentality set in. “The irrational exuberance around pre-sale condos that existed during very low interest rates, particularly in the Greater Toronto market, [from] 2019 through to 2023, was sort of the crystal meth of the condo years,” says Mark Richardson, an affordable-housing activist. And as in any other speculative bubble, sales grind to a halt when prices begin to drop because the expectation of price appreciation vanishes.

The condo narrative has played out differently elsewhere. Many U.S. metros have experienced long declines in their condo sectors because of regulatory barriers: federal mortgage rules preventing more than a certain portion of units to be acquired by investors, or regulations that put developers on the hook for structural defects for up to a decade – a consumer-protection measure that drove up prices (the developers had to buy a lot of insurance and fight a lot of legal battles) and depressed sales. As the Urban Land Institute reported in 2022, condo sales, as a proportion of all “multi-family” projects (i.e., apartment buildings) had sunk to their lowest level in half a century in the United States. Which is to say, back to the years when a few pioneering states were passing legislation establishing strata title.

The rise of the missing middle

There are glimpses of how new housing markets might take shape. Non-profits are getting back into the game, using public subsidies to co-sponsor affordable rental projects or acquiring condo apartments in for-profit projects and then sequestering them in land trusts that hold rents low and prevent speculation.

These have been accompanied by the much discussed “missing middle” zoning reforms that allow multiplexes or accessory dwelling units (i.e., small backyard houses, now popular in regions like California and Oregon) to be built in traditional residential neighbourhoods. As well, a younger generation of builders are looking to enter an industry long dominated by very large players with the capital to finance huge high-rises.

“I do see in my interactions with missing-middle developers a significant shift, and that shift might just have to be with a new generation versus an older generation,” observes Carolyn Whitzman, an Ottawa-based planning and housing researcher, adding that these next-gen builders are interested in more modestly scaled projects.

Some missing-middle advocates are pressing for reforms to North American building-code conventions that effectively prohibit “point access block apartments,” which are legal and ubiquitous in much of the rest of the world. These tend to be low-rise apartments constructed around a single stairwell/elevator shaft as opposed to the standard apartment building configurations in North America, which require long internal corridors with apartments on both sides with emergency exits at either end of a floor (the thinking is that every occupant should be able to reach an escape route in the opposite direction from a fire).

Such safety requirements produce buildings with smaller apartments that face only in one direction. Point access blocks, on the other hand, allow for more livable apartment layouts and enable developers to make more efficient use of space (i.e., no long corridors). Nor is there any evidence that they’re less safe. Some cities, such as New York, Vancouver and Los Angeles, are experimenting with code changes that allow point access block buildings, but their potential, in North America, remains nascent.

The question is whether missing-middle-type development can be accelerated sufficiently to address the need for housing. After all, the condo business model, for all its flaws, quickly generated a lot of apartments. Many housing experts are skeptical and don’t think missing-middle projects will fill the void left by the collapse of the condo industry. Others see a half-full glass: “Right now, there’s a lot of market interest in developing at smaller scales, which wasn’t the case pre-2022,” Donnelly says, citing the “critical” importance of more permissive zoning rules in traditional house neighbourhoods.

What will take over?

The candidate most likely to fill the gap, at least in larger Canadian cities, is large-scale purpose-built rental apartment buildings. In the past few years, deep-pocketed institutional investors, such as Quebec’s Caisse de dépôt public pension fund, have become increasingly committed to underwriting these apartments. Their ranks include public-sector pension funds that have also traditionally invested in malls.

In the United States, while there’s been some growth in the development of rental apartments, the builders of multi-family housing still battle NIMBYism, land-use restrictions and powerful tax incentives that encourage sprawl.

Building and owning rental apartment towers is a very different business than erecting condos. Because there are no small investors to buy individual units in advance of construction, as is the case with condos, apartment developers have to take on long-term mortgages, which means they need healthy balance sheets. It’s not an in-and-out type business. Yet apartment buildings generate exceptionally stable income streams, which appeal to institutional investors like pension plans or real estate investment trusts (REITs). They also tend to be better built than condo towers, Richardson notes. “The developers themselves have some skin in the game long-term.”

The rental market has a carbon problem – here’s how to solve it

Like almost all categories of residential real estate, the viability of rental projects has turned on certain public policies. In the case of apartment buildings in Canada, in the 1960s and 1970s, an obscure federal tax credit permitted investors to write off losses in their non-real-estate holdings against income generated by rental buildings. That measure attracted a massive amount of capital from smaller investors and underwrote an entire generation of slab apartment buildings in many large Canadian cities.

Mark Carney’s Liberals have promised to resurrect this tax break, and the federal government is also plowing billions in loans and loan guarantees into purpose-built rental projects that offer affordable rents to lower- and middle-income tenants. Given the moribund state of the condo business, where developers can’t start new projects because so few people are prepared to put down deposits on pre-sale units, Carney’s timing couldn’t be better.

Whether the rental sector surges, as it did half a century ago, remains to be seen. Donnelly feels the jury is out. “It’s hard to say because the development landscape is very much in flux right now. But the margins on new purpose-built rental projects are significantly tighter than what they were on new condominiums pre-2022. I don’t think we’ll see [purpose-built rentals] dominate in the way condominiums did unless the returns become more attractive.”

Yet, as Amborski notes, investors no longer see condos as a viable asset class that can generate better returns than the stock market or gold, which means all those dollars that flowed freely into tiny investor-owned units have gone elsewhere and may not return any time soon.

Donnelly is optimistic about the fact that the bursting of the condo bubble has driven out speculators, which is good news for people who want to live in the apartments they buy, and also for asset managers who want to invest in rental buildings. Without the condo sector, these firms will no longer be forced to compete for outrageously overvalued real estate with small-time investors looking to make a quick capital gain. “The focus going forward is going to be on meeting end-user demand,” he says. “This is a healthy thing for the market.”

John Lorinc is a journalist and author specializing in urban issues, business and culture.

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A handful of start-ups, many based in California, see all that plant matter as a potential feedstock for making products routinely used in housing construction – think insulation, flooring, panelling and concrete additives.

Not only would these bio-based products greatly reduce a building’s carbon footprint; in side-by-side comparisons, building materials made from straw, hemp, flax and cellulose are more fire-resistant than their conventional counterparts – a top-of-mind concern in the Golden State following the January wildfires that razed more than 50,000 acres of land, destroyed more than 16,000 structures and killed at least 29 people.

British Columbia and other parts of Canada have likewise experienced extreme weather events, from flooding to wildfires. “There’s going to be a really big push to create more houses in the near future,” says B.C.-based Elli Terwiel, owner and lead engineer at Sage Structural Engineering.

Terwiel is part of a growing movement of engineers, designers and architects that are trying to convince the construction industry that natural materials such as grain straw, corn stover (the stalks, leaves and cobs left over after the corn harvest), husks and even sewage sludge can be turned into high-performance building products. “The question is, how do we build those buildings better?” she asks. “How do we make these buildings the best that they can be for Canadians? And I do think that bio-based materials, whether just as insulation or the entire structure, there’s a place for them in the conversation.”

A recent report put out by RMI notes that many bio-based products are market-ready and are at or near cost parity today, despite most of these products not yet having reached the economies of scale of the incumbent building materials.

Mainstreaming natural building systems could, essentially, decouple economic growth from greenhouse gas emissions by transforming the high-emitting building sector into a carbon sink.

How did we get here?

The buildings and construction sector is by far the largest contributor to climate change, accounting for at least 37% of global emissions. In the United States alone, new home construction emits nearly 30 million tonnes of GHG emissions each year.

Until recently, architects and engineers have focused on reducing carbon emissions generated by the maintenance and operations of a building – the GHGs created from heating, cooling and lighting, which are projected to decrease from 75% of the sector’s total emissions to 50% over the next few decades.

But this assessment of a structure’s carbon impact doesn’t account for so-called embodied carbon. Embodied carbon refers to the GHGs released during the entire life cycle of a building, starting with the extraction of the raw materials used for construction through manufacturing, transportation, installation, use and disposal. The built environment relies on concrete, steel and aluminum, which are especially difficult to decarbonize and are responsible for a considerable proportion of a building’s embodied carbon load.

Studies have shown that as much as 60% of an average building’s carbon emissions are embodied as opposed to operational.

Everything old is new again

Bio-based building products are a highly effective way to reduce embodied carbon. Roughly 50% of the weight of plants is photosynthetically sequestered carbon. Buildings that pack mostly plant matter into their structures store substantially more carbon than the amount required to process and transport the materials themselves.

Straw, which is plentiful and a natural by-product of wheat, rice, rye and oats, sequesters 60 times more carbon than it requires to grow, making it one of the most powerful carbon-storing building materials in the world. “You’re taking what would be an agricultural waste product,” Terwiel observes, “that might break down in the field, and you’re putting it into a building. You’re storing carbon in buildings.”

Using natural building materials is not an entirely new idea. Cob, a mixture of clay and straw, is a traditional building technique in the United Kingdom, where cob houses dating back several hundred years still stand. Traditional straw bale construction has been employed for more than a century in the United States. Using cellulose (finely shredded cardboard fibres and recycled paper) for building insulation dates back many centuries in both the United States and Canada.

Code work

David Arkin, a principal at Arkin Tilt Architects, a firm that specializes in ecological planning and design based in Berkeley, California, has built dozens of straw bale structures as well as a four-unit townhome project in Oregon that achieved an 85% reduction in embodied carbon through the use of natural building materials.

The challenge of such structures – and there are several – is that straw bales, like so many biomass products, must be purchased directly from the source, in this case the local farmer. “It’s a matter of scale,” Terwiel says. “You have these very small producers who are at the early adopter stage, who haven’t achieved scale to be able to go after Rona or Home Depot. You have to know where to look to find these products and the people who know how to work with them.”

Moreover, walls insulated with plant matter tend to be much thicker than typical ones. While this has its benefits – excellent thermal properties, soundproof rooms – it can also be impractical in high-density, urban settings. Which is why Anthony Dente’s firm, Verdant Structural Engineers, also based in Berkeley, has been developing a drop-in structural wall panel made from straw bales that fits conventional dimensions, complies with California’s building code and eliminates the need to visit the local farmer. Verdant plans on launching the panels in early 2026.

“I’ve given a lot of presentations to architectural firms,” Dente says. “I don’t talk about how they can buy 100 straw bales from the farmer and have a bunch of their friends stack them up in their walls. I’m talking to them about product development and efficiency and material science development and that they can start bringing these materials to their more conventional clients.”

The majority of plant-derived products, however, have yet to appear in building codes. Projects tend to be small-scale one-offs as a result, and mostly residential.

The compostable house

“Building for disassembly” refers to buildings that are designed so that every component can be removed and reused rather than tossed into a landfill where carbon is released into the atmosphere. For instance, hempcrete, derived from the hemp plant, is a superb insulating material and can also be used in place of concrete; it is lightweight, fire-resistant and entirely recyclable or reusable. “At the end of life, when you remove the finishes, you can take a building made with natural materials and it will compost itself. And that, I think, is pretty incredible,”  Terwiel says.

The RMI report cites a project that compared two residential homes, one built using standard, off-the-shelf materials, the other incorporating bio-based products in the flooring, panelling, rooftops and insulation. Equal in size, the carbon-storing model showed a 107% reduction in net emissions, tipping the building into net storage territory.

“By 2030? I’d like it if California has adopted and green-lighted the use of clay construction,” Dente says. “Clay construction is incredibly fire-resistant and high-performing – we make ovens out of clay! It’s kind of silly how hard it is to use a system that’s such a no-brainer fire solution.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

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“A number of us were working in food-security and food-systems advocacy and seeing the interconnection between food insecurity and the housing crisis,” she recounts. “We [took] those skills that we had in grassroots community organizing and said, ‘Let’s become housing developers.’” None of them, Harris admits, had a clue how to do it. 

Five years later, Propolis has secured a piece of land, raised $1.1 million through a community bond and attracted private backers. They’re currently applying for a low-interest loan from Canada’s $1.5-billion fund to increase co-op housing nationwide, launched in 2022. 

The group will also apply for a municipal building permit this summer, allowing them to construct a six-storey apartment building with 53 units, some community and retail space at street level, a rooftop garden and a car share program. “We’re working really hard for there to be a consistent level of affordability across all of the units,” says Harris, who is Propolis’s executive director, “understanding that the real benefit of cooperative housing is that it becomes permanently affordable.”

At a time when even basic housing has become unattainable for many in advanced economies, the housing co-op movement – which was born in England in 1844 and reached peak popularity in the 1960s and 1970s before a multi-decade decline – is making a comeback, at least in Canada. In February 2025, an Abacus poll of 6,000 Canadians found that three in five respondents “believe there isn’t enough non-profit and co-op housing in their communities, and 61% say increasing availability should be a top priority.” 

“This is a high moment,” says Tom Clement, the executive director of the Co-operative Housing Federation of Toronto (CHFT). “I’m very optimistic.” Julie LaPalme, secretary-general of Ottawa-based Cooperative Housing International, agrees. “Affordability is affecting all ages, [but] it’s different with younger generations in that they’re pretty much priced out of the purchasing market,” she says. “The resurgence [of cooperative housing] is driven by necessity.”

Read more from our collective economy series

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The confidence barometer, however, varies by geography. About half of the 1.2 million co-op apartments in the United States are located in New York City. These are infamous for their exclusivity and low rents, but there’s not much growth elsewhere. Likewise in the United Kingdom, the co-op housing sector is “stagnant,” says Rebecca Harvey, executive editor at Co-operative News, a Manchester, U.K.–based trade publication. But, she adds, the movement has made rapid gains in Europe and Australia and will get a plug at the United Nations’ Second World Summit for Social Development, in Doha in November. “There’s going to be a big co-op delegation heading there to present the cooperative case for a lot of the issues that exacerbate housing issues around the world.” (A March 2025 report by Housing Europe estimates that there are about 7.9 million co-op dwellings in the European Union as well as non-EU countries like Iceland, Norway and Switzerland.)

Cooperative housing, Harvey explains, isn’t just about affordability. The sector is defined by seven guiding principles, which delineate the democratic ways in which cooperative housing societies are managed. Residents own them jointly, on a not-for-profit basis. They are expected to take part in the work of running their dwellings but also to participate in the communal life of communities where tenants will share everything from amenity spaces to bikes and tools. 

Some sectors of the movement are seeing especially robust growth, such as student housing co-ops, land trusts and intergenerational projects. “Loneliness of elderly or older people is being mitigated by having a mixed-use cooperative housing where older people and younger people are in the same space,” Harvey says. “Actually, that works really, really well.”

The real benefit of cooperative housing is that it becomes permanently affordable.

— Lindsay Harris, executive director, Propolis Housing Cooperative

LaPalme points to Zurich, where the municipality adds co-ops on a yearly basis, with a goal of reaching a third of all housing in the city. One of the most notable is Mehr als Wohnen, which means “more than living.” Built on a former industrial site owned by the city and leased to the cooperative for a century, Mehr als Wohnen is a cluster of 13 six- to seven-storey blocks constructed between 2008 and 2015, with more than 370 apartments for some 1,300 residents, as well as amenities such as daycares, cafés and co-working spaces. It offers leases 20% below average market rates in Zurich. The project attracted serious architectural talent and was backed by 35 Swiss co-ops, which collectively contributed the professional and financial heft to bring such a large venture to fruition. 

Despite the long decline of public support for co-op housing in Canadian cities, the Toronto federation, Clement says, continued to create or refurbish some co-ops over the past 25 years – a total of 548 units in six projects between 2000 and 2022, compared to 2,500 to 3,000 in the 1980s and 1990s. 

Yet the recent public policy pivot has resulted in some landmark new ventures. Case in point: a newly approved three-tower joint venture between CHFT, Civic Developments and Windmill Developments to construct 612 co-op apartments and 306 condos in three towers on a city-owned property next to a major transit hub. It’s the largest co-op to be built in Canada in three decades. 

There will likely be more at this scale, given the new federal funding and municipal contributions of land. Vancouver City Council, for example, voted last fall to fast-track social and cooperative housing projects. Not all communities, however, have welcomed these ventures. In March, the eastern Ontario city of Kingston blocked a $127-million/248-unit co-op proposal.

In Kamloops, Propolis is now vetting architects and contractors and grappling with the task of translating lofty design principles – resilience and energy efficiency, for instance – into bricks and mortar. 

“It requires so many people pulling together to make it happen,” Harris says, echoing the essence of the co-op philosophy. 

John Lorinc is a journalist and author specializing in urban issues, business and culture.

The post Cooperative housing is making a comeback appeared first on Corporate Knights.

In the report, CCI suggests that permissive land-use policies coupled with a pervasive lack of awareness of climate risks could lead to more than 760,000 homes being built in areas prone to flooding or fire – an outcome that could cost Canadians as much as $3 billion in damages each year.

“The most affordable home is the one you don’t have to rebuild after a disaster,” Ryan Ness, the CCI’s director of adaptation, said in a release. “Our new report outlines the tools policymakers have to steer new housing to safer ground and support affordability in the process.” Wielding those tools could deliver savings, especially in flood zones: “redirecting just 3% of new homes away from the highest-risk flood areas to safer ground could save nearly 80% of all losses by 2030,” the report authors write.

British Columbia is far and away the most exposed, with new housing facing $2.2 billion in annual damages from flood and wildfire combined under a worst-case scenario. Out of the 20 municipalities most exposed to wildfire threat in Canada, 16 are in its westernmost province. Constructing new houses in the wrong places could more than double wildfire losses in Canada, tripling them in B.C.

Manitoba comes next, facing $360 million in damages to new housing, mostly in flood zones.

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“Building more homes in unsafe places would be an incredibly costly mistake,” CCI president Rick Smith says in the release. “Fortunately, there are ways to build millions of much-needed homes that avoid these future costs.”

Policy gaps contribute to increased climate risks

The report finds major gaps in land-use policies across much of Canada, where most provincial and territorial governments delegate responsibility and decisions to municipalities that “often lack the capacity and political leverage to prioritize long-term risk prevention over immediate housing needs and local economic pressures.”

Ontario and Saskatchewan buck the trend here, both provinces named as leaders in land-use policies.

“Provincial and territorial governments should urgently enact or enhance land use regulations that explicitly direct development away from the most flood- and wildfire-prone areas,” the report authors say.

Other policy gaps stand to further increase the odds of new housing being built in hazard zones. Infrastructure funding programs that lack a climate lens will worsen the problem, as will insufficiently restrictive disaster-assistance programs that encourage municipalities to “rely on post-disaster recovery rather than proactive risk avoidance.”

As well, Canadians at large, including municipalities, developers and homeowners, remain severely under-informed about the climate risks to housing, the report warns. The authors call on all levels of government to develop accurate, up-to-date flood and wildfire hazard maps and make them freely accessible.

The CCI also urges all jurisdictions to “leverage data from private firms to guide housing decisions” and recommends that real estate and insurance regulators mandate disclosure of flood and wildfire risks in all sales and rental transactions.

Indigenous communities face unique housing challenges

Minimizing flood and fire risk to new homes in Indigenous communities is particularly challenging. Key obstacles include the acute need for housing, capacity and funding challenges, and infrastructure issues that range from isolation to melting permafrost. “Policies and practices that are having success include training programs, cultural burns, [and] merging Western science and Indigenous traditional knowledge,” the report states.

To address the specific challenges faced by Indigenous communities looking to build climate-resilient homes in safe places, CCI commissioned a companion report on Indigenous housing and climate resilience.

This article was first published by The Energy Mix and has been edited to conform to Corporate Knights style. Read the original story here.

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But what makes this development – which includes 12 deeply affordable apartments to be operated by a local non-profit – unusual is that it is hooked into a geo-exchange system. That means it is tapping the earth’s heat, rather than conventional gas-fired boilers, to warm and cool the building’s interior spaces. 

According to Adam Molson, vice-president of the Daniels Corporation, the project’s developer, Uniti is one of the first completed projects in the company’s 2030 decarbonization strategy, which begins with geo-exchange systems or air-source heat pumps in all its new rental projects, followed by the use of low-carbon concrete, efficiency improvements in the building’s exterior walls, rooftop solar and mass timber. 

“We broke the ice and got over the fear factor,” Molson says of the geo-exchange system. “That essentially opened the floodgates to us being able to move to geothermal as our default heating system. Unless there are site-specific reasons to pursue another technology, which there may be, we’re not using natural-gas space heating anymore.” 

The one-two punch of the climate crisis driving up utility bills in buildings that already generate 40% of global carbon emissions, while the housing crisis leaves few affordable rental options, puts units like the ones in Uniti in high demand. 

Across North America, rental units represent roughly one-third of dwellings, and steep rent hikes in many metropolitan areas have added enormous strain to those household budgets. A March 2024 research report for Canada’s Task Force for Housing and Climate recommended that purpose-built rentals account for 35% to 40% of all new starts for the balance of the decade. 

With condos, there’s little incentive for developers to invest in low-carbon systems because the benefits don’t accrue to the developers, whose goal is to sell off the units as quickly as possible, nor their investors – that is, the people who buy condos and rent them out, and thus pass on the utility costs to their tenants. But the math works quite differently for an asset manager that’s going to own and operate an apartment building for decades, especially if their institutional investors have explicit ESG (environmental, social and governance) targets, including emission reductions, as is the case with Choice Properties, the real estate investment trust that partnered with Daniels to build Uniti. What’s more, geo-exchange infrastructure, which remains costly to build and install, is ideal for larger buildings that can create the economies of scale necessary to deliver those lower operating costs over the long term. When the planets align, the sustainability investments yield meaningful emission reductions and a payoff for the owner. 

Investors are shopping for rental buildings

In fact, there’s good evidence in both Canada and the United States that investment capital is now flowing into rental apartments at a pace not seen in decades. There are various reasons for the shift, including the high interest rates of recent years that have scared off condo buyers, as well as the fact that all forms of housing, including condos, have become so expensive that most people are completely priced out of the market. 

While the market transition toward purpose-built rentals may bring about more lower-carbon housing because landlords have a financial incentive to minimize energy costs, the change isn’t sufficient to guarantee a payoff that is both green and affordable, nor does this trend assure a supply of affordable rentals. Deep retrofits of drafty older rental stock remain financially daunting, especially for affordable housing providers. Some landlords have struggled to comply with strict decarbonization regulations cropping up in jurisdictions like British Columbia and California, among them building code requirements to “fuel switch” (i.e., from gas to electricity), slash carbon embodied in building materials (e.g., by constructing with mass timber to reduce concrete) or add battery storage systems. 

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Others, meanwhile, have resorted to greenwashing, touting essentially cosmetic environmental improvements in their buildings as a way of justifying rent hikes and displacing low-income tenants. Case in point: a rental high-rise in northwest Toronto, where tenants last year staged a rent strike, accusing the owners of using an energy retrofit renovation to justify above-guideline rent increases of as much as 7% to 10% (Ontario landlords are permitted to increase rents by no more than 2.5% per year but can apply for more if they’ve renovated the building significantly). “This year, my rent went up from $2,100 to almost $2,400 per month,” one tenant told The National Observer. “I don’t know any tenants in Ontario right now who are getting a 10% increase in their income every year, including myself.” (The landlord, Dream Unlimited, disputed the accusations.)

Indeed, as tenant advocacy groups point out, there’s no guarantee that the benefits from energy-efficiency improvements – everything from installing new appliances to replacing drafty windows or baseboard heaters – will trickle down to renters in the form of lower rental rates or reduced energy bills. “We do believe that in many ways, tenants and landlords have differing interests,” says Eddy Roué, chair of the Central Ottawa chapter of ACORN (Association of Community Organizations for Reform Now), a tenants’ advocacy union that recently launched an “eco-tenant” platform for its membership. “But when it comes to things like energy efficiency, this can absolutely be a win-win scenario.” The wrinkle, he adds, is finding the right way to pressure property managers to make the investments. 

Roué cites ACORN’s advocacy strategy, which includes calling for reforms such as anti-eviction covenants on publicly subsidized retrofit projects, free heat pumps for low-income tenants, and a requirement that landlords “demonstrate that the retrofits will result in benefits for tenants, particularly in cases where the landlord pays the energy costs.”

What it takes to green a retrofit

Retrofits on older rental apartments are capital-intensive because they involve the transplant of vital organs – from mechanical HVAC systems to insulation, windows and exterior cladding – in structures filled with tenants. Many property managers will stage these retrofits over a longer period, replacing the various elements only when they’ve reached the end of their usable life. Some cleantech start-ups are also developing approaches to take some of the pain out of retrofits, such as New York–based Hydronic Shell Technologies, which is developing a concept for exterior facade panels that incorporate heat pumps. 

The question confronting policy-makers is how to accelerate this transition. 

Certain jurisdictions have made energy retrofits mandatory. New York City, for example, enacted Local Law 97, which requires landlords of large buildings, many of them rentals that use carbon-intensive heating oil, to meet emission targets or face stiff fines. Some New York landlords have also experimented with so-called green leases, which are structured so that the property manager and tenants share the upfront capital costs for retrofits while also dividing up the savings from lower utility bills. 

Other governments have opted for carrots instead of sticks. The State of Massachusetts last year established a Community Climate Bank to fund low-carbon projects aimed at affordable rental housing agencies. The Canadian government, in turn, has begun offering loans for purpose-built rental development and retrofit projects in multi-family buildings.

It can sometimes just be cheaper to knock down a building rather than retrofit it. It’s hugely destructive and very environmentally unfriendly.

—Tom Wainwright, London’s Royal Holloway University

Yet some places have seen backsliding from earlier efforts to decarbonize rental housing, including housing targeted at low-income households. Before the election of a Labour government in the United Kingdom last summer, initiatives to backstop energy-efficiency programs targeting private rental housing were either stalled or cancelled. 

Real estate expert Tom Wainwright, a professor of strategy and entrepreneurship at London’s Royal Holloway University, also points to unresolved policy contradictions. In the U.K., rental housing developers no longer pay value-added taxes on their projects. However, there’s no such exemption for retrofits, which creates a perverse incentive for landlords, including the removal of existing apartments from the market. “It can sometimes just be cheaper to knock down a building rather than retrofit it,” Wainwright observes. “When you think about all the embodied carbon in the concrete that gets knocked down or landfilled and doesn’t get recycled, it’s hugely destructive and very environmentally unfriendly.” 

Even in climate- and rental-friendly jurisdictions, like Germany, the payback on energy retrofits is difficult to realize. As a 2022 University of Regensburg study found, landlords couldn’t expect to recoup their investment by charging a “green premium” for retrofitted rental units, even after the government kicked in some of the carbon levy as an incentive. 

Scaling low-carbon rentals

The prospect of building new low-carbon rental projects involves far fewer obstacles and has attracted the attention of not just policy-makers and investors, but also innovative designers eager to push well beyond the familiar green benchmarks, like LEED certification.

Shawn Lapointe, a principal with Vancouver-based Henriquez Partners Architects (HPA), describes one such initiative the firm has created with developer Westbank, dubbed Prototype. It’s an attempt to determine an optimal design for a 25-storey mass timber building in Vancouver (that will use some steel) while minimizing cement-hungry underground parking and exterior windows (floor-to-ceiling “glass curtain walls” being incredibly inefficient). They’re also folding in plans for a connection to a local district-energy utility. (District-energy systems distribute low-emission forms of energy such as deep lake water for cooling or recovered sewer gas to run boilers to generate steam for heat.) Prototype, moreover, will be entirely rental, with 20% of the units set at below-market rates and a third suitable for families with children. The project is located on a transit corridor in Vancouver where the city is encouraging rental development by offering density bonuses to builders willing to forgo the condo model.  

What’s more, the design is intended to be portable, meaning that all of HPA’s calculations can be put to use in other locations. “We wanted to make sure that what we’ve developed works for a variety of different sites and conditions, so it can be as replicable as possible,” says Lapointe, who is overseeing Westbank’s Mirvish Village development in downtown Toronto. “We’re also hoping to be able to share that information with others.”

As he looks at Daniels Corporation’s project pipeline, Adam Molson reckons that the current policy and investment climate favours low-carbon purpose-built rentals. With governments scrambling to meet public outcry over the lack of affordable housing, the public policy environment has become highly receptive, with grant programs and tax credits meant to assist both affordable rental and previously unattainable carbon-reducing features, such as geothermal heating. 

There is one storm cloud in Canada, however: natural gas prices, which are now high enough to make the math work on the geo-exchange infrastructure planned for future Daniels/Choice rental projects. But if a future Conservative government slashes or eliminates Canada’s carbon-pricing system, all bets are off. “Right now, you have a payback that might be 10 to 15 years,” Molson says. Without carbon pricing to prime the pump of sustainable rental housing, “you could have a payback that’s well in excess of that, and maybe no longer under-writeable on a purely economic case.”

In that case, it’s hard to imagine that the much-touted financial benefits of “axing the tax” will trickle down to renters living in all those gas-heated buildings. Either way, sky-high rents and energy-inefficient apartments are a burden millennials and Gen Z simply should no longer tolerate.

John Lorinc is a journalist and author specializing in urban issues, business and culture. 

The post The rental market has a carbon problem – here’s how to solve it appeared first on Corporate Knights.

Yet, for millennia, civilizations knew how to shelter humans in hot and dry climates.

As an architectural designer and researcher studying urban resilience, I have examined many of the techniques and the lessons these ancient civilizations can offer for living in hotter and drier conditions.

With global temperatures rising, studies show that dangerously hot summers like those in 2023 and 2024 will become increasingly common, and intense storms might result in more power outages. To prepare for an even hotter future, designers today could learn from the past.

Sumerians: Keeping cool together

The Sumerians lived about 6,000 years ago in a hot and dry climate that is now southern Iraq. Even then, they had techniques for managing the heat.

Archaeologists studying remnants of Mesopotamian cities describe how Sumerian buildings used thick walls and small windows that could minimize heat exposure and keep indoor temperatures cool.

The Sumerians built their walls and roofs with materials such as adobe or mud that can absorb heat during the day and release it during the nighttime.

They also constructed buildings right next to each other, which reduced the number of walls exposed to the intense solar radiation. Small courtyards provided lighting and ventilation. Narrow streets ensured shade throughout the day and allowed pedestrians to move comfortably through the city.

Ancient Egyptians: Harnessing the wind

The ancient Egyptians also used materials that could help keep the heat out. Palaces were made of stone and had courtyards. Residential buildings were made of mud brick.

Many people also adopted a nomadic behaviour within their buildings to escape the heat: they used rooftop terraces, which were cooler at night, as sleeping quarters.

To cool buildings, the Egyptians developed a unique technology called the mulqaf, which consists of tall wall openings facing the prevailing winds. These openings act as scoops to capture wind and funnel it downward to help cool the building. The entering wind creates air circulation that helps vent heat out through other openings.

The mulqaf principle could also be scaled up to cool larger spaces. Known as a wind catcher, it is currently used in buildings in the Middle East and Central Asia, making them comfortable without air conditioning, even during very hot periods.

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When buildings mimic nature

Ancient Puebloans: Working with the sun

Civilizations on other continents and at other times developed similar strategies for living in hot and dry climates, and they developed their own unique solutions, too.

The Puebloans in what today is the U.S. Southwest used small windows, materials such as mud brick and rock, and designed buildings with shared walls to minimize the heat getting in.

They also understood the importance of solar orientation. The ancient Puebloans built entire communities under the overhang of south-facing cliffs. This orientation ensured that their buildings were shaded and stayed cooler during the summertime but received sunlight and radiated heat to stay warmer during the wintertime.

Their descendants adopted similar orientation and other urban-planning strategies, and adobe homes are still common in the U.S. Southwest.

Muslim caliphates: Using every drop of rain where it falls

Modern water management is also rarely designed for dry climates. Stormwater infrastructure is created to funnel runoff from rainstorms away from the city as fast as possible. Yet, the same cities must bring in water for people and gardens, sometimes from faraway sources.

During the eighth century, the Muslim caliphates in arid lands of northern Africa and the south of Spain designed their buildings with rainwater-harvesting techniques to capture water. Runoff from rainfall was collected throughout the roof and directed to cisterns. The slope of the roof and the courtyard floor directed the water so it could be used to irrigate the vegetated landscapes of their courtyards.

Modern-day Mendoza, Argentina, uses this approach to irrigate the plants and trees lining its magnificent city streets.

Mayans and Teotihuacans: Capturing rainwater for later

At the city scale, people also collected and stored stormwater to withstand the dry season.

The ancient Teotihuacan city of Xochicalco and many Mayan cities in what today is Mexico and Central America used their pyramids, plazas and aqueducts to direct stormwater to large cisterns for future use. Plants were often used to help clean the water.

Scientists today are exploring ways to store rainwater with good quality in India and other countries. Rainwater harvesting and green infrastructure are now recognized as effective strategies to increase urban resilience.

Putting these lessons to work

Each of these ancient cultures offers lessons for staying cool in hot, dry climates that modern designers can learn from today.

Some architects are already using them to improve designs. For example, buildings in the northern hemisphere can be oriented to maximize southern exposure. South-facing windows combined with shading devices can help reduce solar radiation in the summer but allow solar heating in winter. Harvesting rainwater and using it to irrigate gardens and landscapes can help reduce water consumption, adapt to drier conditions and increase urban resilience.

Retrofitting modern cities and their glass towers for better heat control isn’t simple, but there are techniques that can be adapted to new designs for living better in hotter and drier climates and for relying less on constant summer air conditioning. These ancient civilizations can teach us how.

Adriana Zuniga-Teran is assistant professor of urban geography at the University of Arizona.

This story first appeared in The Conversation; it has been edited to conform with Corporate Knights style. Read the original article here. 

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And yet, non-market housing – including co-ops, non-profit apartments and any type of housing that is not privately owned – account for just 5% of all homes in Canada.

Creating more rental co-ops would support Canada’s demand for rent-geared-to-income housing. A report from the Co-operative Housing Federation of Canada, which analyzed rent trends in five major cities over 15 years, revealed that co-ops have consistently been more affordable than market-rate apartments; when looking at one- and two-bedroom apartments, co-op rents ranged from being one-third to one-quarter lower than market rents.

However, the development of new co-ops has dwindled since the 1990s, when the federal government ceased funding for non-market housing construction. This shift has left a noticeable gap in the availability of affordable housing, one that could be bridged by reigniting support for co-op developments.

This year, Canada launched the $1.5-billion Co-op Housing Development Program – the largest federal investment in co-op housing in 30 years. But we need to go further if we want to solve Canada’s housing crisis and support the co-op sector, and we can look to Europe for tools to help us get there.

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Lighting a fire under Europe’s green buildings policies 

Although transnational comparisons of housing systems can be complex, it is clear that housing co-ops worldwide benefit from regulatory frameworks that respond to their needs. Across all levels of public administration in Europe, governments are championing co-operative housing.

Here’s a look at three ways European countries are supporting the co-operative economy:

1. Models for building new housing co-ops

When it comes to supporting co-op construction, a recent study on international policies shows that there are several models across Europe for the sale and lease of public land to establish new co-ops.

In Austria, preference goes to keeping land in public ownership, and a leasehold is offered for co-operative projects. Co-ops can also purchase public land at a lower price to offer deeper affordability.

In Holland, most local governments use an unlimited lease model – with ground rent that is either fixed or adjusted every 50 to 75 years – for non-profit developments. The city of Amsterdam plans to employ this model to create 7,000 co-op units by 2030, aiming to have 10% of its whole housing stock owned by co-ops within 25 years.

2. Vienna’s unitary housing market

In Vienna, more than 60% of the population lives in non-market homes regardless of their income – and nearly half of the housing market consists of co-op or city-owned apartments.

When there’s an abundance of non-market housing, it creates an integrated or unitary housing market – where private landlords are forced to compete with non-profit housing for the same tenants, keeping rents in the private sector from increasing too quickly.

The affordable housing system in Vienna is supported by a 1% tax on all salaries. This generates $250 million annually, which provides a permanent funding stream for non-market developments.

3. Access to financing 

Government funding for housing co-ops often comes in the form of public loans or guarantees.  In Germany, Berlin provides zero-interest loans to purchase buildings or for the development of new co-ops.   For senior co-housing projects, Holland offers public guarantees of up to 90% of the loan during the development phase of the project – and up to 15% during construction.

But financial institutions also have a critical role to play in helping to increase the affordable housing stock of a city or country.

In Canada, co-ops tend to search for smaller and more flexible loans to help with building upgrades but often struggle to get support from banks, as these loans can be a lot of work for a lender.

Vancity Community Investment Bank (VCIB) has supported co-ops across Canada – like Innisfree, Phoenix, Winkleigh and Union – with financing for building upgrades, mortgages or property purchases.

In Vancouver, Vancity Credit Union financed the redevelopment of Brightside Community Homes Foundation in a way that maintained the affordability of its 57 homes for seniors.

What’s next for Canada?

The success of European co-op housing models highlights a critical gap in Canada’s approach to affordable housing. By learning from Europe’s robust support systems – whether it’s Vienna’s unitary housing market, Amsterdam’s forward-thinking lease models or Berlin’s zero-interest public loans – we can create a sustainable future for co-op housing in Canada.

But this requires bold action. Both the public and private sectors must step up to champion the co-op economy. It’s not just about filling the gap left by the federal government’s retreat in the 1990s; it’s about embracing proven strategies that can reduce housing costs and build stronger, more resilient communities. The path forward is clear: Canada needs to invest in and prioritize co-op housing now, before the crisis deepens further.

Jennifer Hutcheon is vice-president of Vancity Community Investment Bank (VCIB), which focuses on financing organizations and projects that drive positive change.

The post Canada needs to catch up on co-op housing: Three lessons from Europe’s success  appeared first on Corporate Knights.

Yet these workhorses of our vertical transportation systems – Americans make 20 billion elevator trips per year – are anything but generic. Indeed, the extraordinarily elaborate industrial and regulatory structure baked into the ordinary elevator plays an outsized role in explaining one of the more perplexing riddles of the built form of global cities, which is this: why do North American cities produce far more tall-and-sprawl development, whereas urban regions in other parts of the world typically feature extensive tracts of mid-rise buildings that beget denser and more sustainable neighbourhoods?

The answer, or at least a significant part of it, can be found in an eye-opening May 2024 deep dive on the state of the global elevator sector, published by a Brooklyn think tank called the Center for Building in North America. Written by its executive director, Stephen Smith, the report unpacks why North American elevators are on average three times more costly than their European counterparts – a price divergence that has enormous implications for built form. The United States and Canada also have fewer elevators per capita than any other high-income country.

“High-income countries with strong [labour] movements and high safety standards from South Korea to Switzerland have found ways to install wheelchair-accessible elevators in mid-rise apartment buildings for around $50,000 each, even after adjusting for America’s typically higher general price levels,” the report finds. “In the United States and Canada, on the other hand, these installations start at around $150,000 in even low-cost areas.”

The elevator question has taken on much more salience in the past few years as big cities across North America juggle severe housing shortages and sustainability-driven efforts to intensify residential neighbourhoods by allowing multiplexes and low-rise apartment buildings amidst huge swaths of detached houses. While some cities – such as Seattle and New York – still permit the construction of walk-ups without elevators, such dwellings limit accessibility for people with disabilities, seniors and young parents. What’s more, the high cost of North American elevators has made retrofitting those older buildings financially unfeasible – a problem older apartments in Europe do not face.

Smith’s study shows that North America has hewed to a largely outdated form of elevator regulation, whereas the rest of the world in the late 2000s adopted a far more flexible European technical standard that allows builders to install or retrofit elevators in low- and mid-rise buildings far more easily and inexpensively than is the case in the U.S. and Canada.

In Canada and the U.S., the average number of apartments served by a single elevator now exceeds 100. In Europe, the ratio is far lower, at about 30, at least in part because most European jurisdictions allow the construction of “point access block” apartment buildings, which are configured around a single winding staircase and tend to be lower and squatter. Smith points out that even in very small multi-family buildings in much of Europe, with only one or two dozen units, it’s not unusual to have multiple elevators.

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Smith himself became acutely aware of elevator access issues not long after buying a fifth-floor condo apartment in a newly built Brooklyn walk-up in 2017. He chose the building because of the low monthly maintenance fees. “I was an in-shape 32-year-old and had only ever lived in walk-ups in New York,” he wrote. “An elevator just seemed like an unnecessary cost.”

Yet soon after he took possession, Smith contracted a viral infection that produced a debilitating constellation of symptoms, including dizziness, extreme fatigue and nerve damage. Cycling became treacherous, and the climb up to his apartment turned into an arduous trek.

At the time, Smith was tuning in to the surge of interest among American urbanists and small builders in early efforts to increase density in cities like Minneapolis, whose council in 2018 made triplexes legal anywhere in the city and abolished parking requirements. Contractors responded, but often with low-rise apartments that lacked elevators. Yet through friends and relatives in places like Romania and Italy, Smith knew that in those jurisdictions, small-scale apartments routinely came fitted out with lifts.

Besides the yawning gap between the technical standards in North America and the rest of the world, Smith’s investigation uncovered a range of other factors that drive up costs in Canada and the U.S. These include chronic shortages of skilled workers who can build and maintain elevators and restrictive provisions in collective agreements between the major manufacturers – such as Otis and Thyssen – and the elevator trades. Case in point: while the manufacturers increasingly want to move production offshore and ship pre-assembled elevator components, contracts allow unionized workers to actually disassemble pre-assembled parts and then rebuild them on site, a measure meant to eliminate production efficiencies that could reduce jobs.

Regulations, especially around accessibility, also play a perverse role. North American rules specify minimum cab sizes to allow for turning radii for wheelchairs and stretchers. The result, overall, is fewer elevators and thus less accessibility, Smith found.

Finally, the technical specs in North America are less flexible and more complicated, and Smith argues that there’s a linear relationship between that complexity and cost. The cost helps drive development choices: builders want to go higher to recoup those investments, and consequently the elevators serve more people, receive more wear and tear, and are therefore down far more frequently. In high-density urban cores, like Toronto’s downtown, the results are elevator peak periods and lineups to get out the door.

Smith’s recommendations include a call for North American regulators to consider the high-level implications of ratcheting up safety and accessibility standards, which, evidence suggests, ends up leading to fewer elevators or elevator-accessible apartment buildings.

The report’s primary recommendation, however, is philosophical: North American regulators and standards-setting entities should seek to take a more international outlook, borrowing from what’s worked fine in most of the rest of the world. “In the absence of strong data on the inadequacy of international practices, deference should be given to what is tried and true in societies with far more – and far more affordable – elevators than North America,” the report says.

The post How new elevator rules can help fix the housing crisis in North America appeared first on Corporate Knights.

A backlash to bans on gas infrastructure in new buildings has arrived in Canada.

Last week, Vancouver City Council voted to repeal its prohibition of “natural” gas for heating new buildings in a move climate advocates say will jeopardize the city’s climate goals.

“Council’s decision is [a] big step back for a city renowned for its leadership,” said Betsy Agar, the director of the Pembina Institute’s buildings program. “To stick natural gas back into new home construction would jeopardize Vancouver’s climate goals and do nothing to reduce the costs of operating buildings over the long term.”

The repeal comes as state and municipal gas bans are going through a bit of an evolution in the United States, as they have continued to spread but have also suffered some setbacks in court. More than two dozen Republican-led state governments have barred municipalities from introducing their own prohibitions. And the first city in North America to introduce a ban – Berkeley, California – was forced to repeal its ban after a 2023 Ninth Circuit Court of Appeals ruling rolled it back.

Vancouver’s move came after a change in government. City council originally implemented the ban (which did not extend to gas used for cooking) in 2020. But last week, a group of conservative councillors, who were part of Mayor Ken Sim’s centre-right ABC Vancouver party elected in 2022, tried to turn the issue into an affordability one. The contingent claimed that reversing the prohibition was necessary to keep the cost of new homes down. Sim, who was called into the council meeting on Zoom while he was on vacation to cast a tie-breaking vote, said that “we all love the environment, but we need balance. We also have an affordability crisis.”

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Climate advocates have, however, questioned whether the move will improve affordability, given that electrified buildings can be built cost-effectively.

“The housing crisis in Vancouver is driven by multiple complex factors, and delaying the construction of reliable, climate-safe buildings that are affordable to heat and cool is not a viable solution,” Agar said. “Local governments should collaborate with the provincial government to ensure new homes meet the highest standards for efficiency and electrification. This approach not only reduces emissions but also lowers energy costs for residents.”

Vancouver’s buildings are responsible for approximately 55% of the city’s total greenhouse gas emissions. Considering that, advocates say the repeal of the ban will greatly hinder the city’s pledge to reduce its carbon emissions by 50% by 2030. City staff have warned council that rolling back the bylaw could set the city back “tens of thousands” of tonnes of greenhouse gas emissions.

The new policy will likely come into effect in November and comes at a time when other cities in B.C., such as Victoria, have adopted the top tier of a stringent provincial building code that will limit the greenhouse gas emissions of new buildings and effectively phase out most fossil-fuel use in them.

“By reverting to natural gas, [Vancouver] risks locking itself into a high-carbon infrastructure at a time when urgent climate action is needed,” Agar said.

The post ‘Natural’ gas ban backlash hits Vancouver appeared first on Corporate Knights.

The strategy brings together a smorgasbord of funding programs for buildings and energy efficiency, most of which the government has already announced, including measures from the 2024 budget that included $15 billion in apartment construction loans, $6 billion for infrastructure to support new housing supply and density, and $976 million for rapid construction of affordable housing.

But it contains no mandatory regulations or new public investments to bring emissions from the country’s more than 16 million homes, 564,000 commercial and institutional buildings, and 34,000 federal properties to net-zero.

“This was supposed to be a strategy to demonstrate how to achieve net-zero in the building sector,” Brendan Haley, senior director of policy strategy at Efficiency Canada, told The Energy Mix in an interview Wednesday. “It doesn’t deliver on that because it has neither mandatory performance standards for heating equipment in buildings, nor the public investments that would be needed to scale up retrofits.”

Over the last few years, Ottawa has often resisted calls to adopt ideas “that we felt were urgent and quick wins” in areas like low-income energy efficiency, deferring ambitious action until the Green Buildings Strategy could be finalized, Haley added. “The hope was that we would move away from these short-term pilot programs toward a long-term mission to make buildings more energy efficient, with performance requirements and supports that Canadians could count on in the coming decades, and that markets could plan towards.”

But now, “we’re left with a reannouncement of essentially pilot programs which are time-limited, and when they run out of money they could be abruptly cancelled like the Greener Homes grants.”

The document appears to contain no references to the phrase “natural gas”, prompting some speculation that Ottawa was wary of the criticism it could run into for a more robust approach to decarbonizing buildings, the country’s third-largest source of the greenhouse gas emissions that cause climate change.

“The government is moving in the right direction by attempting to decrease building emissions, lower household bills, and improve safety in homes,” Stand.earth said in a release. “However, the plan falls short by overlooking ‘natural’ gas, a highly polluting fossil fuel that is the most commonly used energy source for heating homes in Canada.”

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The release of the strategy “was an opportunity to ensure that new homes would be built with clean and modern heating technologies, making them less polluting and more affordable to heat and cool,” added Stand climate campaigner Lana Goldberg. “By neglecting to develop a policy to address ‘natural’ gas in new buildings, the plan ignores the elephant in the room.”

That’s “mind-boggling” when “we have a high tech, high-efficiency, low-cost, modern technology to heat the air and water in our homes,” she told The Energy Mix. “This government needs to do what it knows it has to do to deliver on its commitments to reduce Canada’s greenhouse gas emissions, even if there’s backlash from industry groups that benefit from the continued use of natural gas.”

The Canadian Climate Institute assigned much of that responsibility to provincial and territorial governments. “In particular, they should accelerate investments in energy efficiency and building electrification, and stop expanding gas infrastructure for new development,” said Sachi Gibson, the institute’s research director for mitigation, in a release that cites the CCI’s recent report on the future of Canada’s gas networks.

“Our research has found that energy-efficient heat pumps are already the lowest-cost option for heating and cooling many homes in Canada today, and can help reduce pollution while saving people money.”

More Comprehensive Support

A centrepiece of the announcement is the $800-million Canada Greener Homes Affordability Program (CGHAP), which replaces the existing Canada Greener Homes Grant with “more comprehensive support for the installation of retrofits, at no charge to participating households,” Industry, Science and Economic Development (ISED) Canada said in a release. “Using a ‘direct install’ model, where the retrofits are managed and delivered by third parties, this program could provide participating households with support up to four times more valuable than the former grant program.”

Recommended retrofits under the program “will be determined by experienced energy efficiency professionals, enabling each participant to receive what their home needs and making their homes more affordable and comfortable.”

The announcement links to a Canada Mortgage and Housing Corporation (CMHC) landing page that describes a Canada Greener Affordable Housing program, featuring low-interest and forgivable loans of up to $170,000 per unit for retrofits and $130,000 per project for pre-retrofit activities. The program is targeted to older, primarily residential buildings with at least five units or beds.

The ISED release also commits to a “regulatory framework to phase out the installation of expensive and polluting oil heating systems in new construction, as early as 2028.”

“We will be moving to ban the use of heating oil in new construction. And that simply reflects the fact that there are lots of alternatives to heating oil,” Wilkinson told CBC. “Heating oil is enormously expensive, and it is the most polluting fuel that we use to heat our homes.”

The document. “offers few specifics on how the phaseout would work,” CBC notes, but “says it would include ‘necessary exclusions’ for places with insufficient access to electricity, or where backup standby heating is required.”

Building Sector of the Future

The strategy also sets out to “shape the building sector of the future” by working toward mandatory rules to replace air conditioners with heat pumps in new homes “and in certain retrofit scenarios”; Applying a “buy clean” policy that leverages federal procurement to promote low- and net-zero-carbon construction materials and designs; Updating the legislative tools in the federal Energy Efficiency Act to “account for the realities of today’s online retail environment”; Introducing consistent home energy labelling across the country; and toughening up the existing Energy Efficiency Regulations for air conditioners, water heaters, and some other home appliances and components.

“Greening the buildings sector remains a substantial and complex undertaking,” the strategy states. “Buildings have long life cycles and therefore reducing emissions, while also improving resilience to climate change, requires important investments that often need multi-year planning.”

With the private sector and financial institutions also playing a role, “strategies like maximizing utilization, reusing, refurbishing, and repurposing already built space provide a cost-effective way to help decarbonize Canada’s buildings stock by extending the lifespan of existing buildings and avoiding the energy-intensive process of creating new materials,” the document adds. And deep retrofits that upgrade multiple building systems and equipment “can achieve maximum energy savings and GHG emissions reductions.”

‘Quick Wins’ and Ambiguity

In a detailed assessment of the strategy, Haley says Efficiency Canada first suggested the requirement to “make air conditioners heat pumps” in a joint report last year with the Building Decarbonization Alliance, the Canadian Climate Institute, and the Greenhouse Institute. The policy, which is already in place in Vancouver, “ensures customers purchasing an air conditioner get the best product (that can also heat), increasing choices and opportunities to save money and improve comfort by operating the heat pump,” he writes.

The policy is “meant to be a quick win,” Haley writes, “an initial step in a regulatory pathway that would move to future requirements, such as requiring 100% efficient space and hot water heating systems.” But the federal version includes unnecessary restrictions that would undercut the benefits of the new rule, and also lacks a clear definition of a “net-zero end state”.

While eliminating heating oil amounts to “a consumer protection measure due to its high costs and risks,” the impact of the federal plan “is questionable due to its restriction on new buildings, which are unlikely to use oil heat,” he adds. “An oil heating phaseout would protect more consumers by applying to the replacement of systems in existing buildings and new ones.”

The strategy is ambiguous about Ottawa’s plans to require net-zero standards in new construction, including the minimum 3.5 million homes the government wants to see built by 2030. “An immediate action the government can take to meet its net-zero commitments and lock in affordability is to require housing built with funding under the National Housing Plan to meet net-zero standards,” Haley writes.

And while it recognizes the need to speed up energy retrofits to around 3% of the building stock per year, amounting to $400 billion per year in annual capital investment over the next three decades, “no federal public investments or performance standards that could trigger private sector activity are included in the plan.”

Needed: More Political Space

The strategy “helps clear the way for concrete policy implementation,” Haley concludes, opening the door to some “quick wins and immediate gains” through the Energy Efficiency Act amendments, the shift from air conditioners to heat pumps, the heating oil phaseout, and higher performance standards for federally-funded housing.

But it should also “create some reflection within the green building and energy efficiency community,” he writes. Despite “significant progress” in recent years, the strategy shows that “more political space has to be created for governments to move forward with the public investments or mandatory performance requirements needed.”

In Wednesday’s interview, Haley cited the federal government’s low-income energy efficiency program as a moment when public advocacy successfully pushed a new idea onto the government’s agenda. “What needs to be done is people, citizens, raising their voice and getting the attention of their political leaders,” he told The Mix. “More of that needs to be done, because we’ve seen that it works.”

But when that advocacy falls short, “if those policies are not being achieved or implemented, you can’t just blame the government for that,” he added. “You have to be a bit self-reflective about what else can be done.” On energy and climate policy, “the other reflection is why policies like energy efficiency equipment and green buildings, which are clearly a win-win, were not at the forefront of the recommendations for this government, instead of policies that don’t produce those co-benefits and don’t seem to make a lot of sense to people.”

Betsy Agar, director of the Pembina Institute’s buildings program, said the release of the Green Buildings Strategy will contribute to a conversation on how net-zero targets can be achieved.

“It’s a tool we can talk to any government about,” she said. “Now we can see the gaps, so we know what to push for.”

This article was first published by The Energy Mix. Read the original story here. 

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