Climate Change and its Impact on Toronto Real Estate - John DiMichele

Sustainability is at the forefront of John DiMichele’s thoughts these days. In this episode he shares his visionary perspective with a keen focus on current environmental challenges. John passionately highlights the urgency of addressing climate change head-on. 

Guest: John DiMichele, CEO Toronto Regional Real Estate Board (TRREB)
John leads the largest real estate board in North American with over 73,000 licensed real estate brokers and salespersons in the Greater Toronto Area. He holds a Bachelor of Science (Honours) from the University of Waterloo.
https://trreb.ca/

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Transcript

John DiMichele (00:02):

There are responsibilities that we have as an industry, and I'm not just talking about residential real estate sales or commercial real estate sales or the M L S or anything like that. I'm talking about real estate as an industry, new home development in all of that. And if we're not considering what we're seeing today out there, that even today we have to worry about the fact that some nine year old kid died in the west due to the smoke inhalation from the fires, this is only going to get worse.

Manny Andrade (00:55):

Welcome to another podcast here. Today, I'm really excited to announce our very, very, very special guest, John DiMichele, who is Toronto Regional Real Estate Board's CEO. And we're going to talk about many things today. We're going to talk about our pursuit of it. We're going to get into the coffee beans. The name of the show, John, is Coffee Beans and Real Estate. And people ask me, what does coffee beans and real estate have in common? And it's one of the first training sessions that I have with somebody new to the business or new to the brokerage is coffee beans. What is so the coffee shop owner has hours of operation, has schedule, has time to open, time to close and business prep, and the comparison is a realtor, does a realtor have any of that or should a realtor have any of that and should we treat this business of real estate as a business or we just come into the office randomly hoping for something to happen, right?

(01:59):

So the coffee beans is that, and when I asked him, I said, well, what do you do to prepare for your day, for your week? And if you're a coffee shop owner, what would that be? And how can you bring that onto the career profession of real estate? So we're going to get into that. John has a huge bio and we can get into a lot of stuff, but he's been very instrumental in bringing many platforms and new innovation to Toronto Regional real Estate Board. But we're not going to get into a lot of that today. I know John is very passionate about many, many things including behavioral science, but I think today, John, I'm going to lead you down the path and I'm going to have the question of what is it, and I'm going to give you some time to think about it and we'll bounce things around a little bit. But we're talking about today, traffic coming in, congestion coming in. Some of the consequences or side effects of covid were people. There was a big exodus from major cities like Toronto and what impact that had on the environment. So traffic, we mentioned, you mentioned the world's on fire, literally.

(03:19):

So the environmental side of and how that ties in with organized real estate and is there a known on us, a responsibility of sorts for us to raise a little more awareness and take on that fight?

John DiMichele (03:33):

First of all, thank you for having me here. This is a pleasure and an honour. So don't make this all about me. This is really exciting and it's nice to have the opportunity for us to do this, Manny. So I really appreciate it. But I think we all have to accept a couple of things. And I guess I came to the realization on that in 2015 because as you know, I live in Oakville and I drive to Don Mills every day. And as I was driving down the highway, I saw every year the traffic would increase in a certain place by 20%. So when I would drive to Trreb first year, 45 minutes and then all of a sudden 55, and I kept seeing this backlog of cars and thinking, well, what exactly is happening? Are we just not planning correctly? Is the infrastructure's not correct?

(04:35):

Then I came to the realization is that we were well behind on two things, infrastructure and housing. That's how we created the concept in my head of the market year in review and outlook report. But combined with that was this burgeoning issue of climate change that things were happening. And as we added cars, I don't, if you remember at one point we would see that yellow haze over the city. Now it's combined with smoke. This is how bad it's gotten over time. But there are responsibilities that we have as an industry, and I'm not just talking about residential real estate sales or commercial real estate sales or the M L Ss or anything like that. I'm talking about real estate as an industry, new home development in all of that. And if we're not considering what we're seeing today out there, and I'm talking seriously as a human being, that even today we have to worry about the fact that some nine-year-old kid died in the west due to the smoke inhalation from the fires. This is only going to get worse. And it's hard for me to argue with people who the other side of this and say, it's not a problem when I hear my American friends screaming at me because they're getting our smoke down there in New York City and basically saying, what's going on in Canada? So the problem is this is a symptom of a bigger problem, and that problem is how we actually are designing our cities and communities in our homes. Actually, we need to all take more responsibility for what's going on out

Manny Andrade (06:26):

There. Yeah, it's well said. And we often, we leave it for everyone else to figure these things out and to solve these problems. But yeah, you're right. I remember the haze over the city, but that was just normal everyday smog. We're in downtown Toronto for those that are listening at home and and now we see smell evidence of fires that're coming from northern Ontario, western Canada, and it's real and it's happening. And literally the world is on fire. I know Europe is, and they're heading on to their peak season, which is late July and August. So I mean, I can't imagine what it looks like from up above and up in space, but it's got to be horrific to look at. So what do we do? How do we implement any change, John?

John DiMichele (07:24):

I think we all have to consider what the repercussions are going to be. I got a call from a friend of mine, I was actually on a Zoom the other day, and they say, well, I hear you guys really have a lot of fires, a lot of smoke up there. I said, yeah, but I'm down to secondhand smoking two trees a day now. So we have to take into consideration that we are all a little bit responsible here, but I don't understand a couple things. So when you go in to buy a new home, they're going to offer you accommodate you, and you get to choose things like flooring and tile colors and paint and all these other extras in a home. But nobody says, Hey, do you want me to install a nest thermometer? Something that you can manage that actually is connected to your phone so you can manage that.

(08:20):

They don't say, are you interested in solar panels? Nobody talks about ground source heat pumps. They don't talk about sustainable roofing materials. They don't offer these things to someone who might want to have a more sustainable home. Why not? So everything has to be aftermarket. Why not right at the beginning that they talk about maybe instead of having another piece of asphalt on the driveway, maybe there's another solution there that will actually manage the water better. Water's going to be a problem, not just heat, but water's going to be a problem. We all know that. I mean, in the United States, they're basically not insuring anybody who's near a creek and mark my words, they're going to stop insuring people for fire if they're in certain communities and certain positions. But why not take the responsibility now and how we build our communities and really start thinking about what's this going to look like down the road?

(09:24):

Was it bad that last year? Not bad. Is it as bad as this year with fires? This is record setting and now the the temperature in the United States is reaching 130 degrees. I don't know. I don't think I'm chicken little anymore. For a while there I thought I was, but I'm not that anymore. Now it's sort of coming to fruition and there are people who've been working on this for 20 years saying, this is coming, let's prepare for it. So why not have some metrics even in our system that we can actually genuinely adopt or adapt. And there are technological things that we could do for a house to be able to understand is this environmentally friendly, is this a sustainable home? And I think we should be thinking that way now and as an industry, we should be leading.

Manny Andrade (10:18):

I agree. As an industry, I think some of the keywords that we keep hearing in major cities like Toronto and especially in the G T A, is the cost of housing and the cost to build. Would adding some of these or implementing some of these measures that sort of affect or help us with sustainability, would that add to the cost of building? Is that something that maybe the builders are afraid to get into because it's already expensive enough to build? Why are we going to put ourselves in a position where it's just going to take the cost of housing up,

John DiMichele (10:57):

But if the consumer, you don't have to build it in? Not yet anyway, because eventually there's going to be legislation, mark my words, they're going to put regulations on how you build because of the environmental impact that's going to happen. I hate to project into the future, but it's going to happen. But if I as a home buyer want it, why not offer it to me?

Manny Andrade (11:18):

Correct. Having that, listen, as far as implementation, I'm old enough to remember the energy crisis in the early eighties. It was the advent of the Toyota Corolla and the Honda Civic and electric furnaces in houses and ure formaldehyde being sprayed on houses as a measure to preserve to help us with a rising energy crisis at the time. So yeah, I agree that the government will start to implement certain things and maybe it's long overdue having some of these measures. Certainly on a individual basis, it may not mean a lot, but as a cumulative compounding effect, it'll certainly have a tremendous impact in major cities like Toronto. And you're looking other major cities like San Francisco or back to Vancouver, it's difficult there as well. They're going through some hard times. Do you know John, do you know of any global city, anybody that's ahead of the curve?

John DiMichele (12:23):

No, not really. I know that there's a lot of sustainable building in Europe in various parts, but not to the degree that of growth. They don't have a lot of places to grow there. So there's a preservation element there of historical in many of the areas. But in our country, in North America, especially in our country, we don't really have that preservation aspect. In fact, a lot of the buildings that were historical in the city have been ripped down and we build new interesting structures that are all glass, and I hate to say it, but that doesn't really present itself as a very sustainable potential. But I also think about it in terms of what can we actually do now starting slowly to start turning the minds of the consumers. And I guess my concern, my question is, and I don't know enough about it, I haven't done the research, but the carbon tax component and the carbon offsets thing and tap and trade and all that cap and trade, I mean, so what are they using those funds? Are they investing a lot of those taxes into sustainable type projects? I'm sure they are, but it's an area that I would like to see some greater transparency on. I think that there's an opportunity for someone, and I'm giving it ideas here for some, to go out and say, look, I've got an idea to create a small sustainability upgrade to a house, and I'll give you one because this is what I do.

(14:13):

If someone can come up with a battery pack and solar system that's affordable that I can plug into my fridge, which runs 24 hours a day or a furnace, now you've got something. As long as you take a little bit of that power off the grid and you actually have something that's not really using anything but solar energy to actually create something like that, I think you've got something you can sell. I don't know. Would you agree?

Manny Andrade (14:40):

Yeah. Listen, I think, and I enjoy watching those when you mentioned off the grid, those entrepreneurs or adventurers that go out and build their own house and it's sustainable and they live entirely off the grid, but I don't think it's sexy enough, John. I think right now you're talking about artificial intelligence and getting a robot to clean your house, clean your pool, write your speech, et cetera, et cetera. I think that's where it's at right now. What we're talking about here is to, I don't know, it's boring. It's not something that is reaching the masses, but it's a real thing. Look, you mentioned not getting house insurance for your house or cottage. If you live in a higher risk zone, it's already happening here with flood zones in Toronto. If you live in a floodplain, and if you're a realtor, you would know this. There are maps, your insurance is going to be triple or quadruple of what the average consumer is paying.

(15:38):

I was down in New Orleans on a conference, I happened to go a little tour of the bayou and the swap, and they're losing an exponential amount of soil. It was a football field per hour. Something crazy like that. John. And the tour operator was telling me that his property insurance, because of all the storms and storms have all has been part of living on a coast, but now they're bigger, faster, stronger. The storms, level four, level five is almost expected every single time. He said the house insurance, it's unaffordable for the average person that lives on an little coastal town, they're fishermen or their tour operators, they can't afford it. It doubled or quadrupled in some cases. So they're going without insurance, which is a bigger problem. So they can't afford it. So the insurance companies, as you said, are just saying, look, we can't afford to keep paying out every year. Nobody's doing anything about it. So I guess we'll just quadruple your premiums and hope that you actually cancel so we don't have to pay out.

John DiMichele (16:47):

Interesting solution.

Manny Andrade (16:51):

They price 'em out. Well, I mean, there are other things going on that I don't want to get into with insurance companies, but It's not sexy enough. John, this conversation. I've seen you and you had a panel talking about a green building, and there's so many things one can do as an individual. Maybe I can afford to do it if I'm building my own house that I can, the average consumer may not be able to absorb the extra cost, and it would be like there has to be some sort of incentives, either governmental or something that's going to make this come on mass. It's the only way to the future.

John DiMichele (17:35):

That's the whole carbon tax solution. If there's anything. Now, let me put it into perspective. From a carbon perspective, Canada only is responsible for 1.6% of the carbon, which is really minor. But if you look at other real carbon producing nations, we all know who they are. There's three, it's terrible. But here we are trying to do this and actually putting the burden on this population to do so, which is not where the problem lies. However, what it does is it should be raising our consciousness to this issue. My challenge with investing in this, and I don't care that people say, well, it's not going to be something that people will care about. It's the same thing. You only need insurance when you need insurance. So if I can prevent that problem, then maybe we should think about preventing it. I'll give you another thing we need to think about. So in one of the research documents we had done, Pemina looked at what's it going to take to retrofit all these apartments and buildings that do not have air conditioning? What's it going to cost as temperatures continue to increase? What's it going to cost to actually retrofit and then forget about those costs? What's the drain going to be on the power grid when everybody has to turn on their air conditioners?

Manny Andrade (19:17):

Wow. I mean, there's so many things associated with that. Geothermal has got to be a solution because in downtown Toronto, for instance, it's a viable solution because of the proximity to the waterfront and any other, but the drain on the power grid, and how about the drain on the healthcare system when these people, and this happens, it's going to happen again this year. And that happens when you have the surge on consumption, power failures, and then people are trapped in their homes in sweltering heat. So what you're saying, it's going to take a major catastrophe to affect change.

John DiMichele (19:59):

I think there's two paths raising consciousness. One thing we haven't talked about with this that nobody talks about, but the effect on food. What happens if you can't grow food because of floods, because of fire, because of heat, because of drought? What are you going to do? What are you going to eat? I know what we're going to do. We're going to take the office towers and turn 'em into those, what are they call where you grow food inside? Like

Manny Andrade (20:37):

Hydroponic labs? Yeah. Yeah.

John DiMichele (20:38):

Hydroponic labs grow food in first Canadian place because it's empty, because no one's in the office. But think about it in those terms. Are we going to be in that situation? How long is it going to take? And two years ago, somebody told me that there's a conference and they're saying there's only 60 harvests left if we continue down this path. So that was two years ago. So really 58,

Manny Andrade (21:03):

We got 58. It's scary to think about. And if you ever go to California, and if you look at some of the cattle farms that they have, or you look at Colorado and the drain that it is, I mean, those cattle farms are, I visited one, let's say 10 years ago, and they had a 25 acre sewer pond, manure pond. So that's for the runoff. And we got into the consumption just to clean that thing on a daily basis to power wash it. The irrigation systems, all the infrastructure needed, the waters. It's not disappearing because water, there's no net loss necessarily, but it's being displaced from here to there. And you're right, how are you going to grow fruits and vegetables?

John DiMichele (21:49):

I mean, you've got hot house concepts, and I know that they can do that type of work, but it's still going to have a major effect. You cannot right now, all those hothouses are now full of weed marijuana. If you look at all those in ton, they were all filled with tomatoes. Now they're all filled with cannabis. So again, this is part of the problem because in a lot of those third world countries where people are starving, they're actually, sadly, they grow cash crops. They do not grow food. And that's a problem that can be fixed. But if you still can't grow anything, we have a short term dangerous environment for people that are, first of all, the air you can't breathe. Hopefully the water will remain clean. But if there's not enough food to go around in 40 years, then we have serious problems. And I think that that's alarmist in nature. People talk about these things all the time, and I think, okay, well, maybe, but if we're taking the appropriate steps now, we should never get to that stage. And there's some really clever people that are around talking about how to change the course. So we need to start listening better too.

Manny Andrade (23:13):

So I want to thank my friend, John de Micheli for speaking to us on this very important subject. If you look around, listen, watch the news, you can relate to it. Something's going on. There are things happening out there, and it's important for us to be aware of those things and change. Last episode, I shared something about selling my car, my hot rod, when I was 23 years old and new to the business. I did sell it in order to buy my business. Appropriate. In hindsight, I suppose I could have kept it, struggled a little bit more and kept it, and I'd have it today. All I have with me today is a memory of it and a nice plaque on my wall or a photo of an image of the vehicle. And if you want to see it, go on my Instagram and get a full shot of it.

(24:04):

I sold it to Henry. I had to knock on his door and get my money. Eventually, his dad paid me in full. And this is a true story. A listener commented on what he heard, and he thought it was interesting and just found the struggle, interesting and appreciated hearing it. We all have little interesting stories and tales and struggles. So tell me what you think. Tell me if you find anything and what you're listening, interesting. If it's enlightening and provocative, let me know what you think. Share it with a friend. And if you find this podcast program positive, humourous, whatever the case share. So I want to thank Doug for producing this. I want to thank you at home or wherever you are listening to it, for tuning in, for listening it, for liking it. And as again, as I said, if you like what you hear, share. Thank you.