Row homes are surging in Halifax

A little reform goes a long way to revealing unmet demand

Editors note: The link I draw in this piece between ER zoning and the townhome surge is not factual. I still like the piece so I’ll keep it as is. But you can read more about the mistake I made here

There’s an old saying in economics, folks who have taken an intro class might have come across:

Never reason from a price change

The point is that if you see a price spike - you need to think about supply and demand, either or both could be responsible. And its important to know what is driving the price change.

A related mistake, which might be more common, is to assume some cultural factor drives an economic outcome, when really its just a outcome of policy choices. A modified saying could go:

Never assume culture drives a policy outcome

These show up commonly, like saying the Maritimes have higher unemployment and weaker economies because of some sort of culture of defeat (Nova Scotia now has lower unemployment than the national average - should we infer that Ontarians have gotten lazy and defeatist?).

From NS Stats

In housing, by far the clearest example is the urge to attribute Canada’s suburban, single-family dominated housing stock to a strong cultural preference for back yards and white-picket fences. There’s no doubt that currently, the nicest form of housing available is a large single-family home in a city. But for decades, 60-70% of the land in Canadian of cities have only allowed single family homes to be built. It’s easy to point to huge demand for single family homes when it’s overwhelmingly mandated by local policies.

But what if it isn’t?

Row Home Revival

In June 2024, just 5 months ago, Halifax officially enacted its Housing Accelerator Fund reforms. The most well-known part was an expansion of the base residential zoning to allow up to 4 units, instead of 1 or 2. In the regional centre (Halifax peninsula & Dartmouth within the Circ highway), the most common zone became ER-3. ER-3 allows more units, but also allows them to be built as townhouses - ER-1 and ER-2 do not allow buildings to touch each other (side yards are mandated).

It’s still very early, but the early indications suggest that now that they are allowed, builders see demand for row homes! After spending about two decades building about ~150 row homes per year, that has now spiked to 600. I don’t think Haligonians have become 4 times as culturally inclined to row homes within the past few months. Instead, a policy change has made it easier to build row homes.

Row homes have the added benefit of being much simpler - and faster - to build than big apartments. You don’t need a crane - or specialist workers for elevators. Anyone doing single family construction (or old home gut jobs) can probably build a bunch of homes in a row.

This is the magic of good housing reforms. It’s less about doing the same homebuilding 10% faster, its about how to allow for massive spikes in homebuilding that have been banned by our own rules for decades.

After all, with new row home construction at a 50-year high - it seems people love row homes!