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It is often said Vancouver’s insanely high real estate prices are due to a lack of land. That’s not exactly right. Yes, mountains, water and an international border bound the region. But there is in fact a lot of land in the City of Vancouver and the surrounding suburbs. The problem is that zoning rules reserve so much of that land for low-rise, single-family homes.

Vancouver, like Toronto and other cities with fast-growing populations, remains burdened by the weight of outdated laws governing what can be built where – including severe restrictions on height and density in most neighbourhoods and rules that force developers to build as if every future resident is going to own a car and need a place to park it.

But what would a modern city look like if those zoning rules didn’t exist?

The Globe and Mail reported this week on the latest thinking from the Squamish Nation on its development plans for a T-shaped sliver of reserve land near downtown Vancouver, around and under the Burrard Bridge. The area was once home to an Indigenous village, Senakw. In the early 1900s, the Squamish were pushed out, but in the early 2000s, they won back five hectares of their original reserve.

Development on reserve land is not constrained by the volumes of planning rules that guide the rest of Vancouver. Freedom offers interesting opportunities.

The Squamish, partnered with the developer Westbank, plan to build 11 towers, the tallest 56 storeys. There would be 6,000 homes and most would be rental apartments. The people-per-hectare density would be greater than anything west of the densest parts of Toronto, yet 80 per cent of the land would be dedicated to public space.

An example of what’s possible when zoning rules don’t apply? The development would have space for only 600 cars, leaving almost all units without a parking spot.

That’s not a radical idea for developers or urban dwellers. It is, however, anathema to modern zoning. Municipal codes in most North American cities force developers to build parking – often as much as one parking space for each condo or apartment unit. Parking requirements buried in arcane zoning rules remain a central factor shaping our cities and they carry a high price. One underground spot can add around $100,000 to the cost of a condo.

You might think that it would make sense to let builders and buyers of condos and apartments decide how many or how few parking spaces should be in each project, weighing the costs, benefits and trade-offs for themselves. Let the market decide. Freed from zoning rules, that’s exactly what the Squamish have done.

Khelsilem, a Squamish Nation councillor and project spokesman, laid out the thinking online. Condo buyers, Khelsilem said, want parking and the market demand for condos without parking is weak. But the market for rental apartments without parking is robust – and Vancouver needs a lot more rentals. Offering minimal parking made room for more homes, more people – and more public space.

This is not pie-in-the-sky utopianism. It’s the rational cost-benefit analysis of a developer trying to maximize its return by giving the market what it wants. “The Squamish Nation kept pushing to explore the near-maximum the site could handle. This is our jewel of developable land and we’re only going to get one chance in the next 100 years to develop it.” Reconciliation, meet capitalism.

Freed of old rules, the Squamish have come up with something new. In this era of society seeking to battle climate change, the rebuilding of Senakw for the next century is one answer.

It’s not the only answer. Senakw is a promising idea, but it’s also the logical outcome of what happens when zoning in the rest of a city is so restrictive. Such big things are being planned on this one small piece of land because so little development is allowed in the adjacent neighbourhoods. Too much of the pent-up housing demand of a fast-growing region, with thousands of new residents arriving each year, is being funnelled into too few places.

The danger is that the city of the future becomes a few pockets of extremely tall towers, surrounded by seas of zoning-protected, car-dependent, single-family homes. Most of Canada’s cities remains dedicated to those low-rises houses and the cars that necessarily go along with them. It’s time for new rules, new zoning and new thinking.