Opinion: Finding middle ground on missing middle

As the city approaches a momentous public engagement on missing middle, and wrestles with the overly long and complex Missing Middle Housing Initiative policy document, it’s the perfect time to create a better missing middle policy for Victoria and get it passed.

In theory, mid-sized development is the right approach for our city and would allow Victoria to chart a middle path between skyscrapers, which few Victorians want, and single family home (exclusionary) zoning, which severely limits our ability to add housing stock of any kind. The city is changing and we need to be purposeful in bringing about the kind of changes we want. My views align with the overwhelming majority of Victorians, who would prefer that more of Victoria look like Fernwood Square or Cook Street Village—buildings with a few stories, at the right scale, ideally mixed-use, close to transit, full of rentals—rather than the vertiginous towers of downtown Vancouver.

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The trick is creating a policy that satisfies the many critics on all sides and builds consensus for what would amount to the most impactful zoning change in the city’s history. So far, the current council has been rather unsuccessful in its ability to maintain that consensus, despite very extensive consultations on the missing middle that took place in 2021. Worse, council seems intent on needlessly politicizing what was, last year, a much less controversial policy, and is now playing catch-up with its own missteps.

Here is a better plan for missing middle and the process to bring it about.

The first and most important observation is that we need to respect the process. It shouldn’t be this difficult to bring people along on the journey of transformation and achieve social license. It doesn’t help that council has given wildly different signals on missing middle, and cheapened last year’s thorough engagements with a last-minute extra consultation at the height of summer break. It disrespects the hard work of city staff. By first punting the issue to the fall, then suddenly reversing course, council has undermined credibility in defining the right development path for Victoria. According to staff, there was about 80% agreement on the broad contours of missing middle last year, but that hard-earned consensus is now in jeopardy.

Second, we should not kid ourselves and assume that missing middle will create immediate solutions to unaffordability. The only way to have immediate impacts on affordability is to build more social and non-market housing. That said, missing middle can contribute to medium- and long-term affordability by creating more supply over time. It can also add some much-needed and less unaffordable market housing in the short term. Units in a recent development in Esquimalt—a rare sixplex that overcame the gauntlet of government barriers—recently sold for around $675,000. Not exactly affordable, but nonetheless within reach of many urban professionals who want to own a home.

Third, if there is a silver lining to the delays on missing middle, it is that the policy can better address the valid concerns of three competing stakeholder groups—folks who I regularly interact with while canvassing around town. The three groups are these: defenders of heritage conservation, advocates for renters’ rights, and our community of small-scale developers.

The defenders of heritage homes worry that missing middle will lead to a rapid change to the city and will undermine efforts to conserve Victoria’s historical character.

Renters’ rights groups are bothered by the giveaways to landowners that blanket upzoning would likely entail—there’s a potential for sudden increases to property values (i.e. sudden and dramatic equity increases). Renters’ advocates also have valid concerns that knocking down some older homes to build new rentals and condos would displace renters who cling to the city’s few remaining affordable market rentals.

The small-scale developers are also unhappy because the economics of missing middle, even according to the city’s own economic analysis, are not very enticing. The large-scale developers won’t touch any project under $200m, so let’s forget about them. For the smaller developers, the return on investment for a triplex is marginal at best, and the severe labour shortage in construction means that rapid development of mid-sized buildings is unlikely.

There is a pathway that can satisfy the concerns of all three groups.

The first solution is to build greater protections into the policy for heritage-zoned homes. There are already provisions in the policy to protect heritage homes, which would allow heritage homeowners to add annexes and, in some cases, carriage houses or “mews” on larger properties, but clearly this policy could be strengthened. Currently, around 2/3 of Victoria is zoned as single family, and only a relatively small percentage of homes would count as heritage. It's vital to protect these buildings, but there are an abundance of non-historical homes that could be replaced with new, high-performance, climate-smart rentals, co-ops, and condos. Think of these buildings as the “heritage of the future.”

The second solution is to create stronger displacement protections for renters forced to move out for new builds. Currently, the Tenant Assistance Program is triggered only when a rezoning occurs. Blanket upzoning would require a new approach to displacement, and likely one that would require intervention from the province. It is likely that housing minister David Eby is moving the province in this direction, and if new displacement protections occur, it would address the lingering skepticism among renters' advocacy groups around upzoning.

Third, and sticking with the province, representatives from all major urban centres in BC should be lobbying the provincial government to step in and settle many of these zoning-related issues at a province-wide scale.

If, in fact, blanket upzoning will create overnight equity for homeowners, it seems reasonable for the province to implement some kind of one-time land value tax that would capture some of the wealth if a property is sold shortly after the upzoning occurred. The tax revenues could be rolled back into new affordability schemes, including zero-interest loans for those looking to build co-ops and co-housing facilities. Further, implementing some form of upzoning would distribute the changes across the province and likely avoid the sudden, isolated lurches in property values that could end up driving unaffordability.

Finally, and bringing it back to the municipal level, Victoria can be doing more to entice small-scale developers to build purpose-built rentals and missing middle more generally. We need to separate in our minds the big developers—Starlight Developments and the sovereign wealth funds who speculate on housing and treat construction solely as a form of investment—from the small-scale, local builders who are simply trying to add infill to our city and prevent suburban sprawl.

Some immediate ideas that would make mid-sized development more viable  to these builders would include the following: 1) Dump parking minimums, which drive up costs and enshrine outdated assumptions about car-reliance; 2) expand Rental Tenure Zoning (or covenants), in which the city designates properties slated for development as rental-only housing, and then allow small-scale developers to add an additional storey (or greater Floor Space Ratio) if they agree to build (non-luxury) rentals in these zones; 3) allow four-storey buildings on corner lots by right, while capping mid-block development at 2.5 or three storeys.

In the end, the worst-case scenario is actually that missing middle will pass and make no tangible difference to the city at all, merely upsetting a whole range of key stakeholder groups.

What's clear is that the status quo is not working. We are in the midst of a devastating housing and unaffordability crisis, and one in which proposals for super-sized single-family mansions face no red tape, while triplexes encounter nothing but red tape. How is this system even remotely fair? Why are we failing seniors and young families looking to secure housing? We need to take the bias out of our housing policies and do so in ways that forge high degrees of consensus on the future of our city.

Jeremy Caradonna is a community organizer, parent, government worker, and adjunct professor of Environmental Studies at UVic, and is currently running for city council in Victoria . He is also the co-host of the Best Coast Political Podcast with Matt Dell. Jeremy can be reached at jeremycaradonnayyj@gmail.com .