Would help cities avoid a post-COVID commercial real estate disaster while also addressing the pre-COVID housing crunch

The economic havoc from COVID-19 has made the 2008 financial crisis look like a hiccup. Along with airlines and live entertainment, commercial real estate may end up being one of the hardest-hit sectors. Businesses we rely on in good times, both large and small, are facing foreclosure and bankruptcy. Retail locations, restaurants and commercial office space will become vacant and there is no guarantee demand will come all the way back to fill the void.

Part of our new reality is that millions of Canadians have seen the viability of working from home, or at least working from the office at a significantly reduced level. E-commerce giant Shopify announced last month it would become a remote-by-default workplace, with CEO Tobi Lutke going so far as to say that “office-centricity is over.” So long as productivity can be maintained, other corporate entities are likely to follow Shopify’s lead and forego the expensive overhead of downtown office space. That means a potentially significant increase in office vacancies, especially in places like Toronto, Vancouver and Montreal.

If demand does wane, firms that own office towers in major Canadian cities will be left with empty space and hemorrhaging costs. What to do? Un-zoning or rezoning such spaces would be a way to make the overall real estate market more dynamic.

At the moment, it is very difficult and time-consuming to navigate the zoning restrictions that prevent firms from converting commercial spaces into residential units. Toronto, for example, has thousands of pages of zoning rules and regulations that limit how space can be used. Applying for a space to be rezoned is onerous and takes a minimum of nine months to be completed and reviewed. In order to apply to have the city rezone a property from commercial to residential, the applicant often needs to provide: an archeological assessment, a services and facility study, an environmental impact study, an energy strategy, a heritage impact statement, a natural heritage impact study, their planning rationale, their public consultation report and a transportation impact study — on top of their own formal plans. Un-zoning or rezoning swaths of commercial space without requiring this regulatory rigamarole could be a way for local governments to help industry survive the worst of the economic downfall.

Relaxing zoning for most of these commercial real estate spaces would also ease pressures on the supply side of the housing market. In cities like Vancouver and Toronto, the supply of housing has seldom kept up with demand, which is why residential vacancy rates in these major cities are usually at or below one per cent. In Toronto, the Toronto Real Estate Board has shown how demand has generally outpaced supply by tracking average home prices. The average price of a home in Toronto has tripled since 2005. Toronto’s inability to build new housing stock hurts renters more with each passing day. In January, it was forecast that rents in Toronto would rise seven per cent in 2020, well above the rate of inflation — though of course now all bets are off.

Rather than insist that commercial real estate sit empty, rezoning could: provide flexibility in terms of occupancy, increase the housing stock to better keep up with demand, and eventually put downward pressure on home and rental prices citywide — not to mention reduce the economic hit to the owners of such space.

What makes this solution even more attractive is that un-zoning and rezoning existing buildings would be tricky to oppose. New developments in major cities like Toronto undergo months, if not years, of review and community consultation. At every turn, NIMBY (not-in-my-backyard) activists roadblock housing developments for such dubious reasons as a building’s height, shadow or footprint.

In the Long Branch neighbourhood of Toronto, NIMBY activists pushed to block the splitting of a residential lot because it would “threaten their community character and trees.” In the much-coveted Yonge and Lawrence area, the creation of eight semi-detached units was opposed because it threatened the community’s character by being 16 centimetres “too tall” and 13 centimetres “too wide,” according to the zoning bylaw. Obstructionism is so bad in Vancouver that the only way to build at a large scale (in the thousands of units) is on Indigenous land, beyond the reach of city council, which is too easily captured by NIMBYs.

Luckily for housing realists, i.e., those who understand that major Canadian cities need to increase supply, rezoning existing buildings is largely immune from these roadblocks. Buildings that have already been built are not a new imposition. All we have to do is let people move into them.

Giving rezoning and dezoning a serious look would help cities avoid a post-COVID commercial real estate disaster while also addressing the pre-COVID housing crunch. This is a win-win scenario — if only city councils have the courage and imagination to make it happen.

Originally published here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

The federal government’s approval process for medicines, treatments, and vaccines is broken, and red tape at the Food and Drug Administration is to blame.

FDA bureaucrats are stonewalling the search for cures for COVID-19 and other illnesses by forcing drug companies to conduct expensive and misleading testing on dogs. The FDA has gone so far as to force this upon drug producers even when it is not necessary, when efficient alternatives are available, and it has punished companies for challenging this mandate.

One company had a drug (now a potential COVID-19 treatment) held up for years and lost tens of millions in stock value because it refused to conduct an unnecessary $750,000 test on dogs after it had already run extensive animal and human testing. The company has argued that “[t]he animal studies the FDA demands … have been considered routine in the pharmaceutical industry for decades, despite the growing body of evidence discrediting such studies’ scientific value.”

The FDA’s current dog-testing mandate for drug companies traces back to 1938, in the days when doctors regularly performed ice-pick lobotomies to treat mental illness and pregnancy tests were done by injecting women’s urine into frogs. Luckily, medicine has come a long way. But even now, although companies may choose to conduct limited animal testing at times, it’s widely acknowledged that animal testing of human drugs is often wasteful and unnecessary.

The National Institutes of Health, for example, writes that “petri dish and animal models often fail to provide good ways to mimic disease or predict how drugs will work in humans, resulting in much wasted time and money while patients wait for therapies.” The NIH, the FDA, and others estimate that over 90% of drugs that pass government-mandated animal tests fail in humans because they are ineffective or dangerous, costing companies billions of dollars and decades of lost time.

Recognizing this waste, in recent years the pharmaceutical industry has increased research & development spending while also decreasing animal testing by using cutting-edge technologies such as organs-on-chips and computer models that better mimic human drug responses.

The problem is that the FDA often won’t allow these new technologies to be used, even though it claims to support them and has the authority to do so. The FDA’s decade-old ”nonbinding” guidance document that includes dog tests also states, “You can use an alternative approach if the approach satisfies the requirements of the applicable statutes and regulations.”

Yet, as the Government Accountability Office and others have documented, the intransigent FDA has refused to allow companies to use these high-tech tools to fulfill regulatory requirements. Instead, the FDA treats its nonbinding, outdated guidance as a regulation and forces drug makers to pay for unscientific dog tests that field experts, doctors, and scientists deem misleading and wasteful.

The tests demanded by the FDA cost millions and entail force-feeding puppies experimental drugs every day for up to a year, providing no pain relief, and then killing and dissecting the dogs. Approximately one-third of all dog testing in the United States is done to fulfill useless and burdensome government regulations such as these.

These slow and misleading tests also cause unnecessary delays that drive up the cost of drug development and, in turn, medical care. Estimates are that each day a drug is kept off the market due to FDA bureaucracy costs companies between $1 million and $13 million in sales. The GAO has also reported about how safe and effective medical products have been kept from consumers because of FDA’s unnecessary animal testing demands and that “manufacturers may face backlash from animal rights groups and shareholders if animal testing is conducted.” The FDA’s dog-testing red tape is creating liability, not mitigating it.

Taxpayers who pay the FDA’s bills want reform, too. According to a May 2020 national poll, 67% of taxpayers — 73% of Republicans and 66% of Democrats — support ending the FDA’s dog-testing mandate.

In the fight against COVID-19, President Trump has called on the FDA to “slash red tape like nobody’s ever done before.”

The FDA’s burdensome dog testing, which is not required by law and could be lifted at any time, has allowed dangerous drugs to reach patients and prevented safe ones from coming to market. FDA red tape can’t be allowed to hold patients, industry, and puppies hostage any longer.

Originally published here.

The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org