Mandatory Duplexes and Laneway Homes?!
A recent forecast proposed to the Metro Vancouver Regional District suggests we could see a population of 3.8M people by 2050. That works out at roughly 35,000 new residents a year.The conversation of more housing needs for our growing population is not a new one, in fact it’s been going on for a while now. So what could that look like moving forward?
Well first of all, 7,899 homes were approved for build in Metro Vancouver last year. It’s also the first time the majority of these homes were rental homes, as opposed to home ownership.
So what about those people looking to purchase homes in Canada? After all, not everyone will want to get into renting. The larger developers in the city can maximize on profit, as well as various TAX breaks etc when building new structures. Plus it’s easy for a high rise built by a developer to bring 300+ homes to the city. It’s a win-win situation overall. Of course there is the argument for how expensive these properties are, and that’s a very valid argument as we start to acknowledge the idea that not all foriegn investment is in luxury realty. This conversation is a whole other blog in itself. For the purposes of this blog though, we’re focusing on supply.
So the key is really looking at those private developers/builders looking to build multi-family dwellings such as duplexes etc. How is the city going to motivate these entities to play ball with the need for more homes. All builders are naturally in it for profit when building spec homes, but the balance sheet runs a lot more of a tightrope than larger scale buildings.
For this reason, we think the only real beneficial way to get these builders on board is zoning. There is already talk about reviewing certain zoning in the city to allow more density when it comes to new builds, that’s not new to anyone. But what does the city really need to do in order to make this work?
For one FSR - This is straight up the amount of building (also known as improvement) you’re allowed to build expressed in a percentage (%). For example a standard lot of 33x122 means you have a 4,026 SqFt lot. On an RS-1 zoned lot, you could have an FSR of 0.70%. This simply means the structure you are building cannot exceed 0.70% of the whole lot size (4,026 SqFt). So in the above example the building cannot be more than 2,818 SqFt.
There are naturally more intricacies than this, such as if you’re building a particular structure you can get more/less FSR, reusing existing frames, minimum lot requirements for particular rules etc. It’s in these that we see the most changes taking place to allow more homes to be built.
It’s hard, as well as extremely controversial, for the city to force a particular build to be carried out. Naturally duplexes take one home, and make it two. Triplexes do the same but three, Laneways and legal suites add an additional living quarters to a land as well. So to avoid ‘forcing’ a particular build, we can definitely see zoning changes to heavily favour these higher density style homes. Thus not forcing, but making these types of homes extremely more appealing. If you allow a potential builder to have an FSR of 0.60% for a new single family home, but allow 0.75% for a duplex, naturally the appeal is going to be directed towards the multi family route. Using this example, that’s a possible 2,415 SqFt house, or a 3,019 SqFt duplex (That’s two structures of 1,509 SqFt). At a selling price of $1,000 (roughly) SqFt, that’s a lot more potential profit for a builder!
Another way we can see a change being made is with restrictions to lot sizes. Currently you can get much more preferred terms if you have a lot over 5,200 SqFt for example. This is all well and good, but you can have the exact same land, zoned the same, just smaller, and you don’t get any of these benefits. By doing this, the door could be opened to a lot more multi family homes being opted for build, as well as laneway homes etc.
The city's biggest challenge in doing anything to help this? Themselves! It’s a well known fact the city is not quick when it comes to rezoning, permits, as well as complete transparency when enquiries into zoning are needed.
It remains to be seen what will be done, but given the mayor's attempt at six homes on a single family lot was voted down, something else will have to take its place instead.
Thanks for reading along. For this week's blog in podcast format, click here. You can also see how funny we are on video by clicking through to our youtube here.
Until next week,
A recent forecast proposed to the Metro Vancouver Regional District suggests we could see a population of 3.8M people by 2050. That works out at roughly 35,000 new residents a year.The conversation of more housing needs for our growing population is not a new one, in fact it’s been going on for a while now. So what could that look like moving forward?
Well first of all, 7,899 homes were approved for build in Metro Vancouver last year. It’s also the first time the majority of these homes were rental homes, as opposed to home ownership.
So what about those people looking to purchase homes in Canada? After all, not everyone will want to get into renting. The larger developers in the city can maximize on profit, as well as various TAX breaks etc when building new structures. Plus it’s easy for a high rise built by a developer to bring 300+ homes to the city. It’s a win-win situation overall. Of course there is the argument for how expensive these properties are, and that’s a very valid argument as we start to acknowledge the idea that not all foriegn investment is in luxury realty. This conversation is a whole other blog in itself. For the purposes of this blog though, we’re focusing on supply.
So the key is really looking at those private developers/builders looking to build multi-family dwellings such as duplexes etc. How is the city going to motivate these entities to play ball with the need for more homes. All builders are naturally in it for profit when building spec homes, but the balance sheet runs a lot more of a tightrope than larger scale buildings.
For this reason, we think the only real beneficial way to get these builders on board is zoning. There is already talk about reviewing certain zoning in the city to allow more density when it comes to new builds, that’s not new to anyone. But what does the city really need to do in order to make this work?
For one FSR - This is straight up the amount of building (also known as improvement) you’re allowed to build expressed in a percentage (%). For example a standard lot of 33x122 means you have a 4,026 SqFt lot. On an RS-1 zoned lot, you could have an FSR of 0.70%. This simply means the structure you are building cannot exceed 0.70% of the whole lot size (4,026 SqFt). So in the above example the building cannot be more than 2,818 SqFt.
There are naturally more intricacies than this, such as if you’re building a particular structure you can get more/less FSR, reusing existing frames, minimum lot requirements for particular rules etc. It’s in these that we see the most changes taking place to allow more homes to be built.
It’s hard, as well as extremely controversial, for the city to force a particular build to be carried out. Naturally duplexes take one home, and make it two. Triplexes do the same but three, Laneways and legal suites add an additional living quarters to a land as well. So to avoid ‘forcing’ a particular build, we can definitely see zoning changes to heavily favour these higher density style homes. Thus not forcing, but making these types of homes extremely more appealing. If you allow a potential builder to have an FSR of 0.60% for a new single family home, but allow 0.75% for a duplex, naturally the appeal is going to be directed towards the multi family route. Using this example, that’s a possible 2,415 SqFt house, or a 3,019 SqFt duplex (That’s two structures of 1,509 SqFt). At a selling price of $1,000 (roughly) SqFt, that’s a lot more potential profit for a builder!
Another way we can see a change being made is with restrictions to lot sizes. Currently you can get much more preferred terms if you have a lot over 5,200 SqFt for example. This is all well and good, but you can have the exact same land, zoned the same, just smaller, and you don’t get any of these benefits. By doing this, the door could be opened to a lot more multi family homes being opted for build, as well as laneway homes etc.
Finally, a favourite one of all, taxes! There could definitely be some rebates/incentives put in place to build multi family homes, legal suites and/or laneway homes. This really benefits everyone involved. Higher property values for sellers, more available homes for the city, and potential rent income for any new buyers. One would think the additional spending of new residents to the area would outpace any potential losses in tax income.
The city's biggest challenge in doing anything to help this? Themselves! It’s a well known fact the city is not quick when it comes to rezoning, permits, as well as complete transparency when enquiries into zoning are needed.
It remains to be seen what will be done, but given the mayor's attempt at six homes on a single family lot was voted down, something else will have to take its place instead.
Thanks for reading along. For this week's blog in podcast format, click here. You can also see how funny we are on video by clicking through to our youtube here.
Until next week,
Jay Mcinnes
T: 604.771.4606
jay@mcinnesmarketing.com
Ben Robinson
T: 604.353.8523
ben@mcinnesmarketing.com