Chris Spoke on Toronto’s hot new housing law

A new Toronto law allowing multiplexes—up to 4 units in a single building—anywhere in the city aims to bring more affordability to one of the epicentres of Canada's housing crisis. Could this be a blueprint for fixing the country’s housing shortage? We sat down with real estate developer and investor Chris Spoke to discuss how the rule changes will play out on the ground. 

What’s changed with these new multiplex rules in Toronto?

“The changes are part of a broader program to explore ways the city could permit more gentle intensification of existing neighbourhoods. A multiplex is a building with two or three, or four units, but there were many residential zones in the city that don't allow for them. Now they’re legal everywhere.”

Will this help get more supply on the market?

“Yes, but what volume are we talking about? The problem has gotten worse, to the point where this is no longer a sufficiently good solution. If we legalized fourplexes four years ago, I think we could have seen a lot built. But now I’d be surprised if we get a thousand units within the next 12 months. For context, in Toronto, around 15,000 units are built per year.”

Only 1,000 new units? Why so few?

“Because as this has all been happening, housing prices have been rising rapidly. The challenge you have as a developer, if you want to build this kind of missing middle multiplex housing, is you need to outbid a family that really wants that house. And the family has the lowest possible cost of capital because it's not an economic calculation that they're making.”

This interview has been edited for clarity and length. Listen to the full conversation here.