The Other Missing Middle: What I heard at Victoria’s Housing Summit

(9 minute read)  THERE’S A LOT OF TALK about the missing middle in housing supply: the smallish, multi-unit housing types like duplexes, triplexes, fourplexes, carriage houses, courtyard apartments or mansion apartments that are really no bigger than a large house. The kind of housing that works with converting older single-family homes into more affordable multi-family or co-living situations. The kind of housing that leaves most of our original green spaces untouched and encourages walkable neighbourhoods. The kind of residential development that would increase the ability of neighbourhoods to contribute to their municipal infrastructure bill as they mature alongside our growing city.

So it may seem odd that many Victorians appear to be fighting infill housing. The City of Victoria held its Housing Summit last week, where city staff included a great presentation about how infill housing could service the missing middle and address housing affordability. As part of this discussion, staff acknowledged the discomfort many locals are experiencing with the current fast pace of new build construction. Presenters closed their panel with the following message to focus group break-out discussions: the answer to addressing this discomfort is not in a design solution, but in the conversation with community. The city is very interested in discovering ways to improve this conversation, and wants to know “indicators of a good consultation discussion” — indicators of trust.

I am very happy the city is curious about these questions. However, the fact that a presentation on infill housing involved breakout sessions about how to have better community conversations reveals something important about the the state of our development industry. If Victorians are fighting infill housing, maybe it’s because much of the infill they witness — and are perhaps scared of — is at the large-scale end of middle development: 15 to 30 unit apartment complexes.  Leapfrogging the smaller-scale middle such as duplexes, triplexes and other house conversions is not exactly incremental development, and the jump in development pattern contributes to distorting land prices. 

This brings us to the other missing middle: effective functional capacity in small development (also known as incremental or fine-grained development). The large developers need the larger-scale projects to support the economies of scale they’ve invested in for their success. Economies of scale mean capacity for industry leadership and a strong voice. If the only leadership in development occurs at the large-scale end, then naturally this voice becomes the only one we can hear.

Economies of scale also mean industry fatigue and fierce competition for construction resources. There are apparently lots of small developers in Victoria, but it’s not their voices we hear in these big conversations. My guess is they are squarely focused on the projects they can manage and the residents with the means to engage them. And no wonder, because if the large developers are complaining about over-complexity, the smaller developers must be drowning, streamlining the pool of developers capable of taking on infill projects. This may seem great for those who survive and find their way, but it does nothing to relieve the industry’s growing resource pressures. As a city, we are greatly underfed in our capacity to deliver the kind of development that would allow us to grow more incrementally and sustainably — the kind of development neighbourhoods may not raise arms against.

To an extent, the city is aware of this problem. Their pending strategic plan includes the creation of a “small scale housing ambassador,” which was identified in year two of Mayor Helps’ affordability plan as a measure to support “‘missing middle,’ garden suite and secondary suite development by citizen-developers… to help first-timers through the process and host workshops on the creation of garden suites, secondary suites, and moveable tiny homes.” This is very promising, but not enough to shift the industry toward more incremental infill solutions as suitable alternatives to larger projects. We see small developers respectfully defending their projects to council at public hearings, yet the city does not appear to differ in their expectations between small and large developers. And one additional staff member to help along “first-timers” is not enough to spur an increase in citizen developer stock, or to truly empower small development as a meaningful agent in this game.

The city can’t solve this on its own without influencing the space where development leadership is actually occurring: large development. Sure, the city could simplify its zoning regulations but the answer isn’t as simple as making development easier for large developers and more intense projects. The development industry needs to participate in spearheading its own leadership expansion by invigorating greater capacity at grassroots levels.

Unfortunately, this is not the conversation we are having. But examining the present conversation between neighbourhoods and developers can help us understand the leadership space we’re dealing with. Remember, the city asked: how do we create a better conversation, and what are the indicators that tell us we’ve done so?

From the researcher’s perspective, you can’t start with the indicators. It’s impossible to know what they are until it the good conversation and the trust that goes along with it actually exist. The city knows that in development it has neither — and the mere absence of opposition does not equal a good conversation because it’s more about how opposition is managed. Second: if the city knows the answer is not in design solutions, then why is design the focus of all consultation discussions? Developers usually enter these conversations perceived as outsiders, providing their solution to something that is supposed to matter to a neighbourhood. While often an element of that “something” should indeed matter to a neighbourhood, by jumping straight to design proposals, these conversations send a deep message that people’s discomforts don’t really matter. Which of course exacerbates the problem. No matter how many community meetings a developer has about design, none of them will take the place of actual trusting relationships.

Okay, so three: we’ve got a developer-community relationship problem. And the OCP (Official Community Plan) and the individual neighbourhood plans (production ongoing) are not enough to fill the gap. In fact, they contribute to broken trust on both sides every time The Plan is either not met from the community’s perspective but approved by council anyway, or a developer meets The Plan but council rejects their project.

This highlights another major stressor in developer-community relationships: time. On one side, developers need faster, less complicated approval processes so they can meet financing obligations. Meanwhile, because people are busy leading their lives and don’t clutch into the realities of a development proposal until after developers make heavy investments, neighbourhoods miss their opportunity to understand potential consequences of the zoning changes or variances a developer may be seeking for a project.

For example: mixed-use development, which combines large residential structures with ground-floor commercial components, is gaining popularity in many regions (with mixed results).  One implication of mixed-use is that street-level commercial often reduces requirements for setbacks, which can impact public space and perceptions of safety in residential neighbourhoods. Yet cities can’t easily mandate public space because space costs developers huge cash, which impacts project viability. This is a serious mismatch in needs that neither the OCP nor blanket zoning bylaws can resolve without some kind of conversation. So: enter time pressures and neighbourhood conflict.

Conversation quality often boils down to relationship quality. Yet how many of us can really say we are pals with the developers who propose to build in our neighbourhoods? Developers appear to us as these illustrious outsiders because that’s what the industry has become: huge projects, huge economies of scale, huge resource requirements. And large developers drive the conversations we’re having because they’re the only ones with the capacity to do so while managing the economies of scale that has become the industry.

Meanwhile, small developers are simply along for the ride, perhaps better known for enabling “renovictions” than as a necessary agent in sustainable land development. Meaningful house conversions, the kind that would actually expand our housing stock, have become uneconomical beyond mere cosmetic upgrades to attract higher rental incomes or equipping single family homes with bachelor suites. This does more to feed skyrocketing land values than it does to generate affordable family-oriented dwellings. It may seem surprising, but because small developers simply play the game dominated by large development pressures and politics, we have an under-developed, inaccessible urban land development industry. This is not a good road to be on if urbanization is going to continue and we want to create the type of futures we say matter to us.

This isn’t a problem unique to Victoria, or even the West Coast of B.C. Matthew Petty of the Incremental Development Alliance explains how development is an ecosystem:  we’ve got ecosystems for building subdivisions and large mixed-use projects, yet “there’s almost no ecosystem remaining for the fine grain stuff that we know and love, that we’d like to be able to build again. The middle scale stuff just doesn’t get built at all.” It’s not just zoning codes, but available financial products tend to focus on the extreme ends of the housing spectrum, making it difficult for the development community to work on smaller-to-middle scale solutions.

The ironic thing is, a more resilient small development ecosystem would probably improve our neighbourhood-developer relationships. If small developers weren’t spread so thin, they’d be more familiar with the issues that matter in their home neighbourhoods, giving them a leg up on an ability to host authentic conversations about what kind of futures are possible for their communities.

Petty also says, “The right people [to do development] are the folks that are walking around your city already and they’re seeing the vacant lot or the depreciated storefront or the cottages that could use a little more curb appeal, and they say, ‘Somebody oughtta do something there.’”

Yes:  we need more citizen developers.  We also need to build real capacity in small development as an important and necessary element of the development ecosystem.  We talk about policy to mandate more affordable family housing in large development projects and public initiatives to expand co-operative housing opportunities — crucial endeavours, yet neither directly challenge how we think about development economics, urban land leadership, or how development actually happens.  The story that affordable, inclusive housing makes projects “unviable” neglects the agency for change standing by at our fingertips.

Skilled labourers and tradespersons need not be sequestered by the large projects.  The potential exists to build a movement: a new kind of competitor in land development. We just need the leadership environment. If you or someone you know is interested in figuring out how we accomplish this together, please connect with us at local.land.leaders@gmail.com.