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Our Insights

Navigating the Housing Crisis

How a radical shift in thinking offers viable solutions

By: George Sorich, Andrew Schmidt, Julian Andrade

The escalating housing crisis demands radical thinking that challenges traditional paradigms.  While every city and region have different needs and pressures based on socio, economic and demographics, decision-makers at all levels of government must adopt strategies that help to support the immediate crisis and plan for longer-term solutions.

There is a substantial deficit in housing units. Canada requires an additional 3.5 million units by 2030 to restore affordability, according to Canada Housing and Mortgage Corporation. The US needs to construct anywhere from 1.5 million units (National Association of Home Builders) up to 5.5 million units (National Association of Realtors), with Freddie Mac putting the number at 3.8 million new units by 2030 to meet demand. The UK faces a critical shortage, with current efforts falling short of addressing the crisis.

Several interrelated factors contribute to the growing need for supportive, attainable and affordable housing units across the board:

  • Population Growth: Urban centers are experiencing significant population increases, intensifying the demand for housing.
  • Rising Housing Costs: Housing prices have surged, outpacing income growth and rendering homeownership unattainable for many, thereby increasing the need for affordable rentals in these areas.
  • Lack of Affordable and Supportive Housing: Investment in low-income housing and supportive services has not met demand, leaving vulnerable populations—such as seniors, low-income workers, and the homeless—without viable options.
  • Policy and Regulatory Barriers: Zoning restrictions, overzealous NIMBYism, lengthy approval processes and budget shortfalls hinder housing development, especially in high-demand areas.

Housing cost burdens have hit record highs with one in four households beyond the 30% housing cost-to-income threshold. Transforming lives and strengthening communities requires more than incremental change—it requires bold, radical shifts in thinking, funding and policy to achieve real, measurable impact.

Radical Thinking for Radical Change

Government, developers and building owners are facing escalating costs due to material price inflation, labor shortages and restrictive land policies. High interest rates further increase financing costs, making projects riskier and less profitable. Without new funding models or incentives, the pace of construction will slow, exacerbating the crisis.

Decades of underinvestment in social and affordable housing have led to rising homelessness and housing instability. Stable housing is crucial for long-term recovery and acts as a foundation for individuals to rebuild their lives, connect with their community, access employment opportunities, and manage their health effectively. Rehabilitation-focused housing, which includes mental health services, addiction treatment and job training, has proven more cost-effective than emergency shelters or correctional facilities. Municipalities must shift from reactive spending to proactive investment in long-term housing solutions.

For example, some counties in the US are shifting government funds from the correctional system to supportive housing, with a focus on rehabilitation, which has the potential to yield significant societal benefits. It is not just a fiscal matter—it is a public health issue. As witnessed in active supportive housing, providing stable housing for those at risk of homelessness drastically reduces strain on emergency services and prevents recurring crises, and in the process, improves the overall well-being of the community. Policymakers can address the root causes of homelessness, promote rehabilitation, resiliency, and achieve significant cost savings, benefiting both individuals and society.

Public Private Partnerships

Single source solutions will not get us there; it will take a collaboration between public and private entities with each of the stakeholders providing access to their intrinsic expertise. Public entities provide zoning and social service guidance, while the private development industry contributes efficiencies, construction technologies and speed-to-market processes.

Municipal incentives we’ve been part of include expedited approvals, density bonuses, infrastructure improvements and other investments to attract private monies and development in non-market rate housing projects.

Chicago has recently modified its parking ordinance, allowing private developers to eliminate parking requirements for commercial and residential developments, including new housing projects. This reform is meant to boost affordable housing production, create more walkable neighborhoods, and allow parking to align with market demand. It builds on a progressive Transit Oriented Development (TOD) ordinance that allows parking reductions in transit-rich neighborhoods.

Calgary’s Downtown Strategy—a partnership between the municipal government and industry– provides co-investments to private developers to convert vacant office space to residential uses. Through qualified and unique financial incentives, the program works to revitalize the downtown core. This strategy is now being modeled in other cities.

Toronto’s Rapid Housing Initiative works to identify vacancies and potential building conversions to enable the rapid movement of people from chronic homelessness to permanent housing. Much of the renovation and new construction work is being executed through a Design-Build model that leverages the knowledge of builder-designer relationships.

The State of Ohio announced a Transformational Mixed-Use Development Program, offering $100 million in tax credits for mixed-use developments throughout the state. This initiative is expected to spur $2 billion in investments, transforming neighborhoods and activating downtown corridors, including the addition of much-needed residential development.

The County of Sacramento introduced several Housing Incentive Programs, including affordable housing fee deferrals, density bonuses and the bundling of other state and federal funds managed by the Sacramento Housing and Redevelopment Agency.

A modern, accessible studio apartment with a wheelchair features a combined living, dining, and kitchen area. The space includes a bed, a small dining table with a chair, a wheelchair, and a kitchen with wooden cabinets, a refrigerator, and a sink. Large windows with horizontal blinds allow natural light to fill the room. The decor is minimalistic with a few pieces of art and plants, creating a cozy and functional living environment.

Regeneration and Densification

Regeneration is another key strategy in addressing the housing crisis, providing speed-to-market solutions for built-to-rent and diverse housing options. By leveraging various regeneration approaches—including conversions, adaptive reuse and modular construction for rapid deployment—we can collectively create sustainable, high social-impact solutions faster.

  • Conversion: Converting existing buildings into supportive and affordable units can significantly reduce construction time, site preparation and infrastructure costs to achieve proformas. The stock of underutilized city-owned or investor-owned buildings is common across regions in which office-to-residential, hotel-to-residential and retail-to-residential solutions have proven successful in creating much-needed units.
  • Modular Construction: Modular construction techniques can further accelerate the process, delivering housing in months rather than years. While the concept of modular tiny homes is not new, the way we design a site for integration into communities is a significant factor for the progression of rehabilitation, providing different options and levels of service as part of a continuum from supportive to attainable housing. Modular construction is applicable in both urban and suburban strategies as an integral community component. As an example, a vacant big-box retail facility is being transformed into a social service center, with the former parking lots populated with prefabricated tiny home cabins clustered in small, landscaped neighborhoods.
  • Community Oriented Developments: The resurgence of Community Oriented Developments (traditionally known as Transit Oriented Developments) strategically places supportive and attainable housing near access to public transit. The objective is to design more compact units within an amenity-rich building and community. Many of these project types are solving the Missing Middle dilemma by providing a transitional solution between lower-density townhouse product and adjacent urban high-rise living.

The Path Forward

Navigating the housing crisis is a journey from reactive to proactive strategies, balancing the immediate needs of the unhoused with long-term urban planning and radical shifts in policy and funding models.

At NORR, we are part of the solution as pivotal change-makers in the built environment, pushing forward with partnerships that are exploring and implementing new models and initiatives.

Start a conversation about how we can help build or navigate your strategy.