Housing is now a commodity, which contradicts its core function as a recognized international human right. As housing stock is in short supply and demand remains high, prices have been driven through the roof, which has implications for home ownership, rental costs, and availability, worsening the housing crisis across North America.

In Canada and the United States, there’s a strong desire amongst residents to own a home and as a result, a significant percentage of wealth is tied to real estate assets. At the peak of the subprime mortgage crisis in 2006/2007 which led to the fallout of the global financial crisis, real estate represented 6.7 percent of the U.S. gross domestic product (GDP).

When interest rates were cut in 2020, residential investment represented nearly a tenth of Canada’s gross domestic product (GDP). While this number has decreased, it remains higher than the crisis levels experienced by the U.S. and while it may seem like the perfect storm is brewing, the Canadian market is far more insulated than its neighbours to the south.

While market corrections like the one that took place in the U.S. are always looming, meaning Canada is never immune to crisis, the same level of fallout isn’t likely to take place as there are marked differences in how the respective markets operate. Canada’s market is better insulated thanks to more stringent lending practices, tighter borrowing requirements, and stricter rules about housing developments and house-flipping. Land transfer taxes and other rules limit developers’ ability to freely develop multiple properties at a time and offer greater market stability.

Further, Canadian mortgage interest is not tax-deductible, rendering little tax advantage to holding large mortgages, as is the case in the U.S. where policies were developed to encourage home ownership amongst all classes, including low-income Americans via subprime lending, which ultimately led to the crisis.

There’s more to it, though. A 2021 Scotiabank study found that Canada has the fewest housing units per head of any G7 country, with two-thirds of the nation’s housing shortage in Ontario alone. This shortage is one of the biggest threats to stability so development needs urgently to be encouraged to meet the population’s needs—which the Canada Mortgage and Housing Corporation (CMHC) estimated to be 3.5 million additional housing units by 2030.

To make matters worse, it’s a market dominated by investors. During the pandemic, one in four residential properties in Ontario was owned by investors, and when it comes to investors, real estate investment trusts (REITs) are some of the biggest players in this space. As of October 2022, the nine leading Canadian REITs had a combined market capitalization of $50 billion CAD, an indication of the role these investors play in the real estate market and the value and profit that can be unlocked.

As Ontario is ground zero for most of Canada’s housing shortage, the government has invested resources to better understand the market’s needs. The Ontario Housing Affordability Task Force consulted with stakeholders to get a better sense of why home prices have more than tripled in ten years and what can be done to address supply issues.

As it stands, Ontario needs to build 1.5 million homes over the next ten years to address the supply shortage. Further to this, the Task Force identified that both land and infrastructure in the province could be used more effectively, as there is a great deal of underused or redundant commercial and industrial space.

From a legislative standpoint, many policy changes can be made to kickstart development in a way that serves both developers and the community. Amendments could be made to the Planning Act; zoning requirements could be modernized to make better use of land; and better incentives would encourage investments.

Currently, of 35 OECD countries, Canada is second to last (to the Slovak Republic) in the time it takes to approve building projects. The process is complex and time-consuming and as we know, time is money. This is especially true of real estate developments.

According to a 2020 study by BILD, every month a low-rise project is delayed amounts to $1.46 per square foot more in costs that are passed along. An easy way to simplify the process would be to digitize it and reduce the red tape to expedite development, as long as this is not done at the expense of accountability.

The red tape, in this case, includes lengthy, complicated application and appeals processes, material and building restrictions, the need for updated taxation laws and new funding models, and the high costs of doing business (materials and labour account for only half of the overall costs, with land, government, and development fees making up the rest).

Done right, real estate development can rejuvenate communities, but this doesn’t always happen. However, with better policies, procedures, and planning, the development and redevelopment of properties and land could work to create rich, vibrant communities where the needs of the entirety of the population are met. New residential development is often followed by commercial development—the shops and infrastructure, services and support that are required by any community to thrive, which leads to increased employment, additional growth, and a bump in prosperity.

It’s clear that development is an important part of the equation when it comes to growth, but it needs to be done in a way that’s thought through and meaningful to ensure that it harmonizes with local objectives and needs. If it’s sustainable design using environmentally friendly materials, even better.

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The company is best known for local projects like the Halifax Central Library, which Planning Lead Kieron Hunt describes as the project that redefined the landscape for what community engagement and design could be for the city and became a springboard for the company’s successes in turn.

The firm also gained attention through projects like the Richmond Yards mixed-use development, one of the largest of its kind in Atlantic Canada. Fitzgerald adds that the company continues to complete many projects—including schools and health care facilities, and key buildings in various communities—that have significant social value.

In the last two decades, company growth has catapulted the firm to recognition both in Atlantic Canada and around the world. Hunt describes FBM as always thinking ahead, as the company sets the stage of a project so that designers can be free to design what and when they need to, with all pre-development market feasibility and approvals taken care of. The firm also occupies a unique niche with respect to its use of market analysis to bring together community voices, so architects and interior designers can be informed of the project’s touch points with the broader community as it relates to supply and demand forces.

FBM works across Atlantic Canada with architecture and interior design as core services. Its planning wing works across North America, the larger reach allowing the team to gain more exposure to industry trends and best practices. FBM also works with architecture firms around the world and has learned that the process is far more beneficial and seamless when planning and market analysis is involved from the beginning—and it looks to claim this space.

FBM is most interested in answering the question, ‘How does a space become a place?’ Even down to elements like the appearance of a site, its sounds, and its smell, a building can resonate with people in myriad ways and stick in someone’s memory for a very long time. This means that the surrounding environments are integral to the work FBM does, from planning to design.

With projects like Hope Blooms—a Halifax-based youth non-profit—or planter benches on Gottingen Street, elements of mental health awareness, environmental stewardship, and Indigenous reconciliation come into play when designing safe places and communities that have value for all users.

“We realize the connection to the environment that our buildings have,” Hunt explains, and FBM is also aware of the effect that has had on Nova Scotia’s Main Streets. The company takes great pride in how it shapes the urban environment and wants to remain sensitive to it. “The spaces between and around buildings are as important as the building themselves,” he adds.

The company follows a credo of people-driven design, an approach based on listening to different points of view. When designing a building like a school or educational institute, the firm will listen to what the target audience wants but will also seek out different perspectives from a broad array of groups. Fitzgerald explains that the social value of a building is heavily considered during this design process, meaning whether a building is economically and/or environmentally sustainable.

Over the past decade, the nature and role of public engagement and consultation in design and planning have changed considerably. As a result, the input that people and organizations can give has magnified and has become essential to community engagement and outreach programs.

“Everything that we design must be reflective and supportive of a community’s values [and] allow for creativity and consultation,” Hunt adds. People-driven design captures how FBM works: simultaneously internally and externally with other groups, to create a successful project. The firm’s work with the Saint John City Market Strategic Plan involved a great many voices working with a historic property and is an example of how diverse voices from the community ultimately led to a stronger final product.

FBM’s involvement in its local community goes beyond the physical projects. Susan Fitzgerald is an associate professor at Dalhousie University’s School of Architecture and is involved in research that aims to benefit the company and its industry. This includes coming to a greater understanding of what learning spaces, health care centers, and spaces for wellness and dwelling mean in a community. Fitzgerald and the firm are engaging in various research projects alongside clients to develop buildings, and this is key to its operations.

There is also ongoing research in Atlantic Canada looking into mass timber construction, a newer form of building design that is seeing increased interest from clients but little initiative to begin. To help spur it forward, the company is dipping its toe into mass timber and is building its new Halifax office as a mass timber project, which Fitzgerald affirms is going very well. The project is developing interest thanks to ongoing studies by FBM and Atlantic WoodWORKS!, a local non-profit looking to expand the use of regionally produced wood products. The non-profit is looking to measure the embodied carbon of the projects to understand how mass timber construction stacks up against concrete or steel.

The crew at FBM is excited about the move to the new office and is pleased for the new location in Halifax’s North End, where it can be a part of a community with which it has worked in the past.

There are many exciting opportunities afoot in the building and design spaces, but Hunt admits that there are economic challenges across North America. However, projects are continuing in the face of this, especially as Atlantic Canada’s population continues to grow. He sees a lot of provincial support for health care and a big drive toward increasing the number of health care facilities and beds, so the company will remain active in that sector. On a residential level, the team is looking to provide both affordable and market housing and to develop housing opportunities throughout the region, which is an ongoing challenge. Fitzgerald notes that Nova Scotia is being looked at more as a destination, so there is a possibility that more projects along the coast or close to historic sites will be of increasing importance in future.

The company is also currently scheduled to be a part of the 18^th International Architecture Exhibition in Venice—also known as the Venice Biennale—alongside Architects Against Housing Alienation, a Canadian group looking at different strategies for housing people well and for the long term. This contingent will be further supported by Nova Scotian activist Eric Johnson, Coordinator for the Halifax-based homeless assistance program Navigator Street Outreach.

Hunt adds that the firm, in partnership with the Nova Scotia Federation of Municipalities, planned the inaugural Nova Scotia Main Streets Ideas Exchange, which is a conference to bring communities and organizations from across Atlantic Canada together to share ideas and rediscover the value of smaller main streets in communities.

“Bringing together groups is consistent with our people-driven design,” Hunt affirms, and both the company’s 2023 calendar and its goals are indicative that this idea will be at the front of the firm’s mind for a long time to come.

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President AJ Slivinski took over ownership of Mayfield Management Group Ltd., now Zen Residential Ltd., in 2016 after decades of entrepreneurship and business experience, including many years in the food industry managing both a domestic and North American portfolio, building a major gaming operation in Canada, and operating a world-class contact centre in Cyprus. “In three years, the contact centre went from two people to 127 people, 12 different languages, a 24/7 operation,” he remembers. “In our fifth year we became the number one contact centre in the world in customer service, beating out FedEx and Carnival Cruise Lines in the final. It was quite a journey and quite an achievement to do something in an established industry and to become number one in the world.”

While building businesses, Slivinski began investing in real estate in the early 2000s, buying condominiums across Canada then eventually selling them when apartment complexes presented a better opportunity. He retired at 45, moved to the sunny shores of Panama with his wife, and wrote a book titled The Leadership Code which explores the successful strategies he implemented when building the world’s number one contact centre. But the lure of real estate soon drew him back to Alberta.

“I thought, ‘I need to get back into the industry.’ I have a passion for real estate. I have a passion for buying, selling and managing apartment buildings.”

Slivinski returned to his home province of Alberta armed with the experience and insight needed to shake up the industry. “The property management industry is very lethargic,” he says. “It’s very complacent, very antiquated, and heavily paper-based. Since I came from a background of online marketing with the gaming industry, I thought if I went out and bought a property management company in Edmonton that maybe I could be a disruptor. Maybe I could go in and completely shake up the market, bring technology to the industry, and disrupt the industry with that technology, understanding how and where tenants were currently and where the future was going to be with tenants. And not only tenants, but with all customers.”

He made good on his vision in 2016 when he bought Mayfield Management Group Ltd., which had managed some of his apartment complexes in the past. He made the acquisition “with the sole intention of trying to disrupt the industry with the formula I used in Cyprus to build a world-class contact centre.” To do so, he focused on three core areas: people, processes, and technology, all of which are connected.

“The processes are developed by great people,” Slivinski says, “and technology is the accelerator of great processes.” While all three areas are critical, people stand out as irreplaceable. “Both processes and technology can be copied, but it’s the people that can’t be copied.”

These irreplaceable people who make up the team hit the ground running after the acquisition. One of the first goals to tackle was to make a dramatic transition from a paper-based system to a digital one. This proved a major effort that came with more than a few challenges.

“They were the typical paper-based company,” Slivinski says of Mayfield Management Group when he bought it. “So we needed to change software and start to move toward the cloud. We were trying to position ourselves in the marketplace [to be] the technology leader. Today Zen Residential is completely cloud-based—the entire tenant journey and life cycle, right from when they first find us until the time they exit, is completely paperless. We have created our own proprietary digital tracking and paperless system called RRMS (Resident Relationship Management System). The application process is digital. The signing of the lease is digital, the move-ins and move-outs are digital. The entire process is augmented with a series of drip campaigns to keep in constant contact with renters throughout the renter lifecycle,” he explains.

After becoming a technology leader within the industry, the team is ready to take on its next challenge. “We’re pivoting,” Slivinski says. “The industry here in Edmonton—major property management companies—all built their business on what we call the stick-built 1960s, 1970s walk-up 20-unit apartment buildings in the downtown core. And today’s industry is changing and evolving. The new phase of the industry is what we call purpose-built apartment buildings. These are Class A, brand new apartment buildings that are almost like resorts.”

The trend has been steadily gaining momentum for over a decade, largely because these resort-like complexes provide the amenities and community residents want. “The purpose-built buildings that we are seeing really started in the U.S. about 10 or 15 years ago,” Slivinski explains. “They have full gyms, a demo kitchen, yoga studios, bocce ball, pickleball, dog runs, barbecues, heated walkways, fireplaces. They’ve got the full gamut.”

These apartment communities appeal to multiple generations. “They’re catering to Millennials who are not in a rush to buy a home or can’t afford a home with today’s interest rates, as well as Baby Boomers who are done raising kids,” Slivinski says. “They’re leaving the suburbs and moving to these purpose-built apartment buildings, not having to tie up all of their capital in a new purchase of a home. They’re using that to live on and they’re getting their community and their social connections through these purpose-built buildings.”

Developers have proven eager participants in the growing trend as the industry evolves. “These purpose-built apartment buildings are being built by the old developers that were building condos over the last 20 or 30 years,” Slivinski says. “Obviously the condo market has dried up, and so now they’re moving into these purpose-built apartment buildings.”

The team is eager to embrace this new direction completely. “Zen Residential has taken a position of being at the forefront of a cutting-edge technology-based property management company. We’re shedding our MMG legacy positioning and reputation of managing the old stick-built city buildings and placing ourselves at the forefront of helping these condo developers build these new purpose-built apartments,” Slivinski shares.

The concept “is completely different than building a condo and selling it and moving on to the next condo building. These are buy and hold assets.”

Zen Residential offers a full suite of services that will be invaluable to developers as they navigate this completely different terrain. “We can actually do the branding for these developers,” says Slivinski. “We can do the logo design, the website design, the complete SEO, lease-up, and marketing, as well as the property and asset management. And we offer consulting services upfront. Before these developers even put in their request for their development permit, we’re helping them.”

The company’s list of services goes on, including “consulting on the design of the floor plate where the offices should be, where tenant traffic should flow for move-in and move-out, amenity design, technology stack, and all other operational designs.” These services are an exciting new direction for the company. “Mayfield itself has been around for over 32 years, but our next chapter with our new name Zen Residential is to focus on Class A assets and help developers build and manage investments,” Slivinski says.

These decisions are complex and everchanging for developers. The stakes are high. Like renters, they want peace of mind when choosing a partner. Renters want to go home after a long day at work and just relax hassle-free. This was the genesis of the name Zen Residential.

The company is making some major shifts in order to give these assets the time and attention they deserve. Slivinski just merged his condominium division with Blueprint Condominium Management Inc., another Alberta-based condominium property management company. The merger “will now allow me to focus 100 percent of my time and effort on the apartment side and the single-family side of the business,” he says.

After taking an already seasoned company to the next level, Slivinski and his dedicated team are well prepared to oversee the upcoming plans to fruition. The technology is already in place and the team is eager to use its industry experience to lead the market in an exciting, new direction.

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