To Live & Buy in Vancouver
September 2, 2008
“It was half a business decision and half a social decision,” says Amy Robinson (right), a 37-year-old sustainability consultant, of her living arrangement. Along with two other families, she and her husband bought a row of three houses on two lots. Her sunlit kitchen offers a view of the backyard, where only the overgrown old fenceposts offer evidence of a previously divided world. When they purchased the houses, four years ago, each cost about 60 percent of what the same size house on its own lot would have cost. The three families own all three houses jointly. VanCity created the “mixer mortgage” for them, and each family has its own mortgage product. They went through an extensive legal process (ensuring, for example, that there was a way to value each third fairly if anyone wanted out). Now, it’s easier for others to enter into customized ownership arrangements. Robinson no longer wants a house on its own lot. There’s “an amazing sense of community,” she says, but also privacy. Even the basement-suite tenants chip in, which means there are nine adults and five kids helping with things like garden work. And she enjoys the “greenness” of living in a single-family home without the associated footprint.
Planners call laneway housing “hidden” density. In the case of secondary suites, they speak of “invisible” density. No one knows how many invisible housing units there are in the city; but the number on the books represents only a small fraction of what’s out there. Tsur Somerville, director of the UBC Centre for Urban Economics and Real Estate, is planning to do the first survey using census data. On his block alone, he reckons, at least half the houses have at least one secondary suite. Most are illegal.
Right now, the process needed to make a suite legal is time-consuming, and building-code requirements can be expensive and seem arbitrary and superfluous—especially when there’s a lineup of renters who don’t care about the bureaucratic details. But it’s illegal to have more than one secondary suite, which is why François (pictured here) requested a pseudonym. He rents a converted barn in the backyard of an East Vancouver house that is itself divided into three suites—a fact his landlord understandably likes to keep quiet. “We fell in love with it,” François says of the two-storey space, which has its own large deck and lots of skylights. It’s smaller than most one-bedroom apartments, but has “many advantages.” It’s quiet, it’s surrounded by greenery, and it’s unique. “Plus, sometimes small is good—it makes you realize how little you need.”
“ Some people worry that encouraging hidden density will push the price of housing even higher,” says Brent Toderian, director of planning for the City of Vancouver. If it’s allowed in just a few neighbourhoods, it may cause a spike in those areas, he says; but if it’s allowed across the city, the effect is greatly mitigated.
All Together Now
Keri Guelke, a 40-year-old traffic superintendent on the Vancouver docks, bought a house five years ago (even though friends warned it was the top of the market). A couple of years later, a friend rented one of the bedrooms. The two sat around for hours talking about renovating. One day, she suggested that if he was able to buy in, they could afford to renovate. Even on the way to the notary, Guelke recalls, he told her he thought the market was about to crash. “Look, if you don’t want to do this, no problem,” she replied. “It’s not worth risking our friendship over a house.” They’ve since added a third floor, and a two-storey kitchen and living area with floor-to-ceiling windows that overlooks a large deck and green backyard—all of which they share. They have their own bedrooms and bathrooms. Guelke owns two-thirds of the property; her friend, one-third. They and their partners and one other tenant all pay “rent,” with the monthly pool going toward the mortgage and the renovation loan; any excess revenue goes to the owners. For the same price she could have bought a condo; but, she says, “lifestyle is important to me. Living with other people is important to me.”
“ North Americans are in the process of realigning their identities and values” to make them more affordable and sustainable, says Marv Gilbert, a Vancouver-based psychologist. This is the first generation that won’t be automatically more affluent than their parents. That makes the prospect of owning a single-family home less likely for many Vancouverites, but as Guelke’s experience shows, there can be unexpected upsides to the city’s affordability crisis.
Darrell Mussatto, North Vancouver’s mayor, figures that people need garages more than cars do. In 1991, he and his brother bought both sides of a duplex. A few years ago, when their parents wanted to downsize, Mussatto and his brother took the garage down and hired an architect to design an 800-square-foot, two-storey coach house, where he now lives. His brother still lives in one side of the original duplex, his parents in the other. “The amazing thing is that I’m next to my mom and dad and my brother and his wife and kids,” says Mussatto, who cuts the lawn because his dad is “getting on a bit.” When the mayor gets home late, which is most nights, his parents warm up dinner for him. “The negative thing is that I’m right next to my mum and dad,” he says with a chuckle. “But 95 percent of the time that’s great.”
The compact coach house suits him, and he likes knowing that his footprint is small. The kitchen and living room are two storeys high; the bedroom, bathroom, and a compact office are located over the new carport. Barrels collect rainwater, skylights provide illumination, and shutters help control the heat in summer.
He’s just a few blocks from work, and from the Lonsdale shopping strip, which means he rides his bike or walks just about everywhere.
“ It’s higher-density, but it doesn’t feel higher-density because of the way it’s done.” He says tour buses sometimes even bring people to see their place. Not everyone on council is in favour of this sort of densification, but, says Mussatto, “the world is changing. We can change with it, by design or by default.” In North Van, a coach house still requires rezoning, but Mussatto says there’s a committee working on making the permit process simpler.
“ The most powerful tool under a city’s control also tends to be the most politically contentious,” agrees Brent Toderian, the Vancouver planner. “Some have called density the third rail of city-building because no one wants to touch it. But density isn’t the goal,” he says. “It’s the tool.” In Vancouver, lane-oriented housing is allowed in only a few pilot neighbourhoods, but Toderian says it may become widespread as early as next year.
Elsewhere in the country, down-payment money generally comes from savings; here, it often comes from equity built up in a house. In short, if you’re not in, it’s hard to get in. Almost one in 10 first-time Vancouver buyers uses money from family—by far the highest percentage in the country. A sprawling, four-storey home near Victoria and Venables is a case in point. When the kids grew up, the parents created two separate suites, with individual entrances. The kids each bought one, and the parents occupy the top two floors.
In Richmond, a variation on the theme saw a doctor and his wife put a down payment on a house for their four grown children. The four kids lived in it together, paying the mortgage each month and paying down 15 percent of the original principal every year. When the mortgage was discharged, they sold the house, paid their parents accrued interest on their initial investment, then split the proceeds four ways. All the children were then able to make substantial down payments on homes of their own.
Jayne Sandilands, 42, grew up on an Alberta farm where she could “run for miles” and always imagined she’d live in a detached home with a backyard. “But that’s just not possible at the moment,” she says, so she’s “downsized her mentality.” She lives in a bachelor suite in Yaletown that’s “well under 500 square feet,” commuting by bike to her job in sponsorship sales in East Van. “This is all I need,” she says, “and that makes me feel really good.” Every piece of furniture does double duty. Her inflatable bed gets tucked away when she has people over—but that’s seldom. Rather than hanging out at home, she usually joins friends at the beach, “which has a better view than any backyard.” Her main frustration? Her difficulty finding smart, suitable appliances. “My sister lives in Geneva, where everything is compact. I have this tiny space but a big fridge that’s never full, a microwave I could cook a turkey in, a dishwasher I never use.”
Rudy Nielsen is president of the Niho Group, which collects and analyzes property statistics.
“ I used to be the guy who, when prices started to go up in Vancouver, said people would move out to Maple Ridge and Chilliwack,” he says. “I met a couple from Maple Ridge recently who drove an hour and a half each way in separate cars to get to their jobs downtown. By the time they’d got home and made dinner for the kids, they had half an hour together before going to bed.” Nielsen thinks traffic will only get worse and travel more expensive. “And look at the stress—an hour and a half in a car? How about a brisk walk to the office instead?” In Vancouver, there are 4,044 units smaller than 500 square feet; most are downtown, and about half were built in the past decade. As in Hong Kong, Paris, and Mexico City, microliving is becoming common. “If you decorate well, and have good windows,” says Nielsen, “500 square feet can work.”
In 1986, according to Statistics Canada, roughly a quarter of B.C.’s 20- to 29-year-olds lived at home; by 2006, 44.4 percent did. Today, the percentage is almost certainly even higher. Katie Holmes, 23, is one such homebody. Even if she were as wealthy as that other Katie Holmes, she says, “I still might live at home. I like the neighbourhood. I have friends close by. And I’d be lonely living by myself.” During university she lived at home and worked part-time to cover her tuition; she stayed on after graduation to save money for a down payment, and because she loves to travel.
Holmes mostly lives in a 10-by-10-foot bedroom, where she also works as a freelance graphic designer. “I can’t exactly bring a boy home or anything like that,” she says. “And I can’t have a party—it is my parents’ house.” But that minor inconvenience is worth it,
she says, and her parents (who had already met by the time they were her age) are understanding and happy to have her under the same roof.
Nik Chiu, a 27-year-old elementary school teacher with three university degrees, also lives with his parents. “I’m not ashamed, I don’t feel like a loser,” he says, laughing. “There’s just no way I could buy a place.” His circumstances are also such that there’s little intergenerational friction. His parents are often away, so he’s alone about half the time; he also enjoys the social aspects of living with others. Not locked into a mortgage, he feels free to explore job opportunities in other cities. Living at home, he says, affords him both freedom and security.
Rent Now, Buy Later
On Rob Chipman’s popular real-estate blog, people often debate the merits of renting versus owning, with many making the case that you’ll come out ahead if you rent. And it’s certainly true that, while rents for all types of housing have increased over the last few years, they haven’t climbed as precipitously as housing prices.
George (who prefers a pseudonym) rented a 405-square-foot, one-bedroom suite downtown for $695 a month. The building changed hands, and the developers offered to sell him “his” suite for about $299,000. He could only have put down five percent, which means his mortgage alone would have been about $2,400 a month—more than three times the rent. Housing prices would have to keep rising dramatically to make that mortgage payment a worthwhile investment.
“ We’re at a point in the city’s evolution where one of our most critical needs is stable rental stock,” says Toderian. “If all the different people you need to make a great city can’t afford to buy, but they can at least afford to rent, you’re okay. Otherwise, we’ll have big challenges. For that reason, it’s a key objective to increase the rental stock and ensure that rents are affordable.” Toderian believes that as Vancouver becomes “a more obvious example of a city well positioned to weather the storms of climate change and energy pricing,” more people will inevitably want to live here. “And without supply, prices have nowhere to go but up.” How can we keep the dream of home ownership alive for the next generation? “The number one strategy,” he says, “is creativity.”