Real Estate

UBC professor Tsur Somerville suggests Vancouver landowners split lots

by Carlito Pablo on October 1st, 2014 at 3:00 AM
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      Around summer last year, Vision Vancouver councillor Kerry Jang was getting scorched by critics.

      It was all about the term affordable housing, with Jang defining the words for CKNW radio host Simi Sara as “something that somebody can afford”.

      Jang was being interviewed by Sara in connection with opposition by Marpole residents to a draft of a new community plan. City staff were proposing at that time to change the zoning classification of many single-family properties to allow denser developments such as duplexes, townhouses, and apartments in the neighbourhood.

      In a subsequent phone interview with the Georgia Straight, Jang brushed off criticisms that he was being disingenuous.

      “What’s wrong with that?” he said with a chuckle about his definition, explaining that the city’s housing-and-homelessness strategy identifies a range of housing options, from shelters to rentals and private homes.

      A year later, and with a civic election coming on November 15, affordable housing has emerged as a key issue in the campaign.

      However, there are some inherent difficulties with some of the discussions around this topic, according to Tsur Somerville, director of the UBC Centre for Urban Economics and Real Estate.

      “Housing affordability means different things to different people,” Somerville told the Straight in a September 26 phone interview.

      “When someone says ‘housing affordability’,” the UBC associate professor continued, “I mean, that’s a different issue for people who are homeless than for low-income renters than for, you know, people of median income who might be able to afford to buy a house outside the city but can’t buy a house inside the city versus people who could buy something inside the city but not in the neighbourhood they want to. So you’ve got sort of four different notions of what the affordability problem is.”

      Somerville suggested that if politicians want to have a valuable conversation, they should start talking about what they will do with single-family properties in the city. According to him, continuing to have only one house on a typical lot of 5,000 square feet “in a particularly land-constrained environment is an expensive choice”.

      “I think the discussion has to be the extent to which, in my mind, we want to protect single-family neighbourhoods from redevelopment.”

      (In 2004, the Coalition of Progressive Electors–controlled council rezoned all single-family-zone areas to allow secondary suites.)

      One option is to make it easy for landowners to split their lot and build two houses.

      “That’s doubling density without a change in sort of, you know, heights and massing in an area,” Somerville said. “I’m not saying that all areas should have that. I’m just saying that there’s a lot of different ways to get more housing in there without it being 40-storey towers.”

      But Somerville also recognizes that altering single-family neighbourhoods is an emotional issue for many. That’s why he cannot really imagine key candidates in the election daring to touch this subject unless they’re intent on losing votes.

      “I think it’s like [former prime minister] Kim Campbell’s comment that an election campaign is no place to talk about policy,” he said. “I think, fundamentally, dealing with affordability requires us to change our neighbourhoods or spend a whole bunch of money [on housing subsidies]. Since doing either one of those, proposing either one of those, is somewhat suicidal, I think it’s unlikely to see that discussion in an election campaign.”

      What happened with the Marpole community plan, the issue that got Jang ensnared over his definition of housing affordability, is instructive of how altering single-family neighbourhoods can be a controversial measure.

      There had been a claim that the city was planning to rezone more than half the single-family properties in Marpole in order to pack in more homes. The plan was revised because of opposition by residents; in the end, when council approved the new version in April 2014, about 85 percent of single-family homes were to be left untouched.

      “It’s not surprising that people are resistant to their neighbourhoods changing, because they like the neighbourhoods the way they are,” Somerville said. “And they’re already there, so they’re already affording it.”

      Comments

      11 Comments

      BurnGirl

      Oct 1, 2014 at 10:19am

      Great suggestion. Another idea is side x side duplexes, which are common throughout Burnaby. I live in one and like the smaller house footprint and lot.

      One thought - non-strata row housing in now legal, so why aren't more developers offering this product? It's the norm in older areas in Montreal and Toronto.

      Bruce

      Oct 1, 2014 at 10:30am

      In a speculation-driven real estate economy, increasing supply won't reduce prices by any detectable amount. It may even feed the fire.

      cathy

      Oct 1, 2014 at 10:35am

      how many seniors-that is people over 50 living in houses too big for them but don't want to downsize if this means moving into a condo {ugh!} and paying high maintenance fees?
      i'm one of them-living in a too big now three bedroom house.
      smaller row non strata housing would be perfect option for me and probably many others.

      OMG

      Oct 2, 2014 at 8:56am

      @Bruce

      I guess you must have missed this in the article:

      "...according to Tsur Somerville, director of the UBC Centre for Urban Economics and Real Estate."

      I wouldn't just dismiss Somerville because he may not share your philosophy. Reality can be harsh and as he says, you either have to change the structure of neighbourhoods or pour a ton of money in to subsidies. Both options will have a polarizing effect. The only other alternative is to stop people from wanting to move here. Good luck with that.

      RUK

      Oct 2, 2014 at 2:22pm

      I'd love to think that making more dwellings on a 33x100 lot is going to make things affordable for not-zillionaire human beings, but on my street in East Van, a house that was probably more expensive than mine ($285,000 in 2000) was just gutted and renovated into a triplex - $800,000 per third of a house.

      It's not a fancy street, by the way.

      $800,000 is easier on the pocket than $2,000,000 but still, whoa. At a conventional mortgage that's $200,000 down (who saves $200,000???) and a $600,000 mortgage ($2000/month for 25 years!!) - for a third of a house!!!

      It's actually way past time for the bubble to burst if people have intentions of owning a family-sized place in Vancouver proper. I hate to say that regulation is the answer, but letting the market do its thing has not been the answer either, unless the question is "how can we price our children out of their home city?"

      Bruce

      Oct 2, 2014 at 6:35pm

      @OMG

      The price of real estate in Vancouver isn't driven by "people wanting to move here" any more than people drove the price of tulip bulbs to crazy level in the classic "tulip mania" because they desperately needed them for their gardens.

      The evidence is in how far out of proportion prices are vs rents.

      Bruce

      Oct 2, 2014 at 6:42pm

      This speculative bubble sh!t is centuries old, and the denial looks the same every time. Recommended reading for Vancouver: "Extraordinary Popular Delusions and the Madness of Crowds"

      Price to rent trend is here:

      http://2.bp.blogspot.com/-th7TteBtg4o/UD-3oAKncSI/AAAAAAAAAak/PlM3w7xg_d...

      And BTW, Japan hung at its bubbly peak for 6 years - before a sharp drop then a 25 year bear market. And Tokyo's a lot cooler than Vancouver.

      OMG

      Oct 2, 2014 at 8:46pm

      @RUK

      Not to sound like I'm disagreeing for the sake of disagreeing, but I disagree with you :) At least in one area. You said that the bubble needs to burst "if people have intentions of owning a family-sized place in Vancouver proper". But the reality is that people are buying these places in Vancouver. Disregarding the unknown number of empty investment houses, most of the houses in Vancouver proper are owned by families. It's just that not everyone can afford one, but when has that ever been the case in a popular place? London, NYC, Hong Kong are all much more expensive than here, but nobody seems to think they need severe regulations. And before everyone chimes in that Vancouver is NOT in the same league as those cities, the fact is that the price is high because people want to move here and they have the money to do it.

      The old Vancouver is gone and is never going to come back. Everything has changed about it and Expo 86 was the catalyst.

      RUK

      Oct 2, 2014 at 10:31pm

      I was talking with some friends tonight and I had an idea - or 12% of an idea - about capping the level of increase in the appreciation of real estate. I'm not one of those guys who wants government to suppress the free market but govt does step in when the free market wants to sell poison milk or form monopolies or other social harms. In this case, the grotesque cost of a nothing scrog pad is a social ill in that regular families can't buy into our market. I don't want Vancouver to be a gated community for zillionaires.

      So I propose that there be some sort of regulation on the amount of increase over last years assessed value that you are allowed to charge. We need to have a drag on prices. Taxing investors won't do it, they will just pay it.