'Remote Work Cities': A Proposal To Fight Rising Housing Costs
Canada has a housing supply problem. What causes it? Regulation, economics and network effects; working in tandem. Government, as a captured entity, enacts all sorts of rules that block private property owners in a ‘free country’ from doing what they want on their own property (Zoning, Approvals, etc.), while the invisible hand of ‘free market’ economics responds to this by inflating the prices. Finally, due to the nature of network effects; already settled and established places are far more attractive to move to than places that have ‘potential’ or are ‘up and coming’. To summarize: everyone wants to move to same places, those places have capped supply artificially, and therefore prices skyrocket. Welcome to the housing crisis.
As someone that has not yet given up on the world, I want this to be solved rather than for society to run into the ground. Looking at the raw ingredients, however; paints a dim picture for us optimistic citizens. We don’t have many levers to pull. First, let's throw out economics, as that is an emergent force, rather than something we can directly change. That leaves us with regulation and network effects. We can improve some regulations; provide incentives to build denser housing near transit, remove zoning laws, lower immigration etc. Something can be done. But, in well established cities, you will be fought at every turn.
Not only will city councilors speak against these improvements, elder citizens will make time in their day to speak against the destruction of the neighbourhood's character; painting you to be some kind of Disney-channel villain that wants to destroy everything that makes life good, honorable and beautiful. Existing middle class homeowners will also speak against you as they have hitched their financial wagon to the beast. Let’s face it: successful places and people are hard to influence. After all, why would they listen to you? Things are going well. Real estate values are up, endless amounts of people want to move there, even you are forced to endure their humiliation ritual by engaging with them as a part of formal meetings and conversations. You are coming to them; that gives them all the power and you none of it. They can contradict themselves by pushing for more immigration and less housing in the same breath; you can’t. You are expected to be perfect; to analyze everything, to see how shadows effect the local worm population, to conduct door-to-door studies in every direction. God forbid you miss one person in the survey; your studies will be invalidated, and you are back to square one. So while the regulations we change can have some minor effects, that leaves us with the last thing to make some real changes: shattering the network effects so that we don’t have to play on a grossly uneven playing field.
Why do people choose to live where they do? Work, family/friends and amenities. Mostly in that order. Of course, there are some exceptions, but that is generally it. Work is first, because if it is not available, people will unfortunately leave places in which their close ones live. They will also forgo amenities such as good restaurants and entertainment. One must be able to make a living; that’s just the nature of our life here on Earth. That is where remote work comes in. It provides us some powerful leverage against the tyranny of established cities and will help us destroy their monopoly on gainful employment. 50+% of workers are white collar professionals. Imagine if half of them were remote and now had the freedom to move anywhere. This labor liquidity is the first secret ingredient for real change. This is the plan with the remaining steps:
Forcefully push remote work. Provide heavy tax incentives for businesses to go remote. Even though I am not a fan of government meddling of this sort; that is precisely what got us into this mess, and therefore we need some to fix the situation.
Find small, desperate municipalities (or create new ones) within two hours of major cities and incentivize them to cut all the red tape. Remove regulations. Make these municipalities ‘free’. Create an expedited program for real estate developers big and small (and American and International!). Sell parcels of varied sizes to these developers. 0% loans for dense housing construction related activities. Allow (and rather; mandate) construction to start within days of proposals as opposed to years.
Provide heavy temporary incentives to live in these new ‘Remote work’ cities: 0% income tax if you live there, 0% property tax, cheaper mortgages. Make them special temporary economic zones with a gradual return to the normal levels.
Where white collar workers would move, blue collar work would also crop up, along with services and amenities. The incentives for individuals would be far cheaper housing, lower taxes, better access to nature and simply far better communities because this time they wouldn’t be built in an unsustainable, inhuman scale. At the beginning this whole plan would be very fragile, but as the ball would get rolling, perhaps Canada could finally have its crop of B-tier cities; something it is desperately missing. I won’t go as far as push high-speed transit between cities in this piece (financed by the developers that will profit from historically low tax rate incentives and rebates) as that is perhaps a little extreme, but these kind of ideas would also be on the table.
The theme here is liquidity. Specifically resident liquidity. The market is one-sided because work is tied to location. That location benefits greatly from that. People don’t. It’s already hard to move away; let’s make it easier. If a city gets worse, and workers are remote; they can leave much quicker. In fact, that would be great to punish bad governance and reward good governance. Because, in reality, the most powerful vote you have is your presence. Right now, no city leader fears that they could wake up the next morning to an abandoned city. But this is a fear they should have deep within their hearts. The fear of having failed their constituents on a profound level; pure dishonor of being left behind. They need to feel this.
I am aware that network effects are not so easily broken. But, we are not even trying at the current moment. It is not guaranteed that this kind of endeavour would fail. In fact, if done correctly, I think there is a high likelihood that it will succeed.
Here is how I could imagine this plan could unfold:
The new incentives are announced for individuals, businesses and developers. Municipal partners are found, and some federal land is designated for new municipalities. Cue the complaints.
The ‘greedy developers’ see these amazing opportunities and rush to take advantage of them. They can start immediately and they do. Great urbanism is mandated via the incentives, the compact street grids and smaller parcels. Beyond that; laissez-faire.
Businesses, seeing the incentives, would start to hire more remote employees. This is setting the stage for these employees to move to the ‘Remote Cities’, in which they would get their own rewards.
As the first cities come ‘online’, the incentives are simply impossible to ignore for employees. The first movers enjoy a financial standard of living that is unmatched due to no income taxes.
These ‘Remote Cities’ fill up with un-taxed white collar workers are now a mine of untapped disposable income. Services, education, contracting, entertainment, restaurant, art would rush in to take advantage of this opportunity.
As a final semi-joking thought, there should be one of these ‘Remote Cities’ for each major city in Canada. So, for Toronto, there would be New Toronto. This would be a psychological trick to make it more familiar. And yes, I would to see high-speed transit between the sibling cities; turning them into Siamese twins, perhaps making it easier to see family and friends from the other ‘side’.
To summarize: this proposal aims to break the stranglehold monopoly that existing places have on labor and amenities; starting with labor. From there, amenities would follow. It is unfortunate that families and friends cannot be addressed in any meaningful capacity, as that is fundamentally impossible to do. It is what it is.
Regarding the ambition and scale of these plans, I will let the words of Daniel Burnham conclude for me:
Make no little plans. They have no magic to stir men's blood and probably will not themselves be realized. Make big plans, aim high in hope and work, remembering that a noble, logical diagram once recorded will never die, but long after we are gone will be a living thing, asserting itself with ever growing insistency. Remember that our sons and grandsons are going to do things that would stagger us.