Renderings of proposed projects by inner-city developer RNDSQR. The company's mddl offshoot, a for-profit social enterprise, aims to facilitate DIY development in Calgary.RNDSQR
To address Canada’s housing shortage, all hands are required on deck. Homeowners can play a role in increasing the supply of housing, as noted recently by Housing Minister Sean Fraser. To enable them, a new Calgary venture aims to equip homeowners with the know-how they need to succeed.
On April 19, Alkarim Devani, founder of inner-city developer RNDSQR, launched mddl, a for-profit social enterprise whose mission is to facilitate DIY development in Calgary.
By transforming a low-density site into much-needed missing-middle housing, homeowners can retain their property’s value for generations to come, he says, while also supporting the creation of more housing. “If you sell to a developer, you’re giving away value to developers.”
Mr. Devani believes that a grassroots approach to redevelopment could allow seniors to age in place, help curb NIMBYism, and even put a small dent on the financialization of housing. “There’s this generational opportunity for homeowners to take their equity to create more homes, rather than just take their equity and go buy another home further away.”
At mddl School, homeowners will learn about the risks inherent to real estate development and how to mitigate them, so they can decide what’s the most viable option for their property.
At mddl School, homeowners will learn about the risks inherent to real estate development and how to mitigate them, so they can decide what’s the most viable option for their property.RNDSQR
“Construction costs are probably your biggest risk,” Mr. Devani says. “But there’s this financial risk component. I think the current financial infrastructure, the way the system is set up, it doesn’t lend itself well to a citizen. It’s very complicated, even for someone who is savvy.”
The significance of these barriers became evident for Mr. Devani when Mosaic Village, a Calgary co-housing community he consulted for, fell through last year.
“Mosaic was ahead of its time,” he says. “They were excited about what that opportunity could look like, but they didn’t have a funding stream that spoke specifically to that opportunity.”
Like many developers in the post-2020 world, the members of Mosaic Village had to navigate the challenges created by rising interest rates and construction costs, but they lacked the financial capacity to succeed.
Eilis and Murray Hiebert, two of Mosaic Village’s members, had been looking forward to aging in an intentional community, surrounded by like-minded people. But after nearly a decade of working with an array of consultants, including RNDSQR, to co-create a vision for their property, the group failed to secure the capital required to build a 24-unit multi-family building in Bowness, a gentrifying neighbourhood in Calgary’s northwest.
“We had 14 guaranteed sales, and we needed another 10,” Mrs. Hiebert says, adding that as the cost of a single unit increased from about $500,000 to $740,000, retaining committed buyers became too difficult. “We lost members because the cost kept going up; people couldn’t afford it.”
Eilis and Murray Hiebert were trying to build a co-housing project and had 14 guaranteed sales, but failed to get funding.Todd Korol/The Globe and Mail
According to Marlon Bray, a senior director of development advisory at Altus Group, access to knowledge and capital aren’t the only barriers homeowners should overcome to successfully redevelop their property – a change of mindset is also essential.
“It’s a little tricky for the average person to be a developer,” Mr. Bray says, noting that homeowners are not only more risk averse than developers, they also have an emotional attachment to their property. “A developer is completely detached, a property belongs to them, but it’s not in their backyard.”
To increase their chances for success, homeowners should approach development as a business enterprise.
“You’ve got to be pragmatic and realistic about this,” Mr. Bray says. “Know the numbers. Understand what the numbers are going to be.”
This reality could be at odds with the co-housing model, where community building and collaboration precede the harsh requirements of real estate development.
“The more people are involved in a project, the more people are involved in decisions,” Mr. Bray says. “If you can’t make a decision quickly, it costs more money.”
Because co-housing communities such as Mosaic Village can take up to 10 years to break ground, and require bespoke features such as a common kitchen and gathering spaces that promote social interaction, as well as a myriad of ad hoc consultants, costs tend to add up, reducing their chances of success.
“My job was to steward their vision,” Mr. Devani says about his involvement with Mosaic Village. “I wasn’t able to convince them that things needed to go [a different] way in order for it to be successful. I told them what the risks were, and they still wanted to proceed.”
After purchasing Mosaic Village’s 0.72-acre site, RNDSQR is currently working on the development of 52 stacked townhouses, twice as many units as the co-housing group had envisioned for the same parcel.
“When you’re building 24 units and you need to sell all 24 of them before you break ground, that’s super challenging,” Mr. Devani says. “I think the idea of co-housing has to evolve.”
Through mddl, he hopes more homeowners can learn what a viable vision looks like.
“If a co-housing group came to me today, I would tell them, ‘This is the model – do you want to do it, yes or no?’”