This week, selected items and observations from a short trip to Victoria.
The Victoria I grew up in was a product of the 1940s and ’50s. Literally: this was the house my father had built in 1946 on return from the war. Cost: $7,000, with a Veteran’s loan. (In 2017 dollars: $102,000)
It is astonishing to me how much of that era is still intact. Almost nothing has changed on the surrounding blocks, not even the corner store down the street.
Bringing my Vancouver eyes, I can see that era is coming to an end. Land values are rising as the decades-old housing stock decays. In some neighbourhoods, like Cadboro and Cordova Bays, it means the original house, regardless of condition or suitability, must be demolished and replaced with a development that maximizes the allowable density and provides all the amenities expected for million-dollar-plus accommodation.
One:
Two:
Three:
The same conundrum: the loss of more affordable housing (small houses on large lots, especially), a change in scale and character of the community, discomfort with speculation and empty homes – but a resistance to anything that might lower property values or tax the spectacular gains that one generation lucked out on even as they complain that their children can’t afford to live in the neighbourhoods they grew up in.
This is not the Victoria that established residents want, but it looks increasingly like the one they will be getting.
“small houses on large lots” is a very narrow way of considering housing affordability.
If you assume “everyone can afford a large lot” then yes, “small house on that large lot” will be your cheapest way to house people.
But requiring large lots simply be fiat, outlaws everyone who cannot afford to buy a large lot.
What matters for affordability:
– how much does it cost to construct a given square foot of living space?
– what is the cost of land per square foot of living space?
Yes, I was about to comment that “small houses on large lots” is not affordable housing unless the cost of land is minimal. Which is a thing of the past in most of our large cities now.
Costs have several sub-components, such as:
a) physical material costs (concrete, wood, fridges, wires, windows, ..)
b) labour & shipping costs to get those physical materials on site
c) labour costs to install those materials
d) design costs
e) planning & approval costs
f) finance costs incl upfront fees and ongoing interest
g) fees paid to various municipal or provincial (and sometimes federal) entities
h) land costs
i) sales costs
j) marketing costs
k) risk costs [ such as the new EnvyTax, also referred to as speculation tax that now has substantially increased risk of sales for condos to Albertans in Victoria, Kelowna or Nanaimo ]
Since time is money, delays cost money. Often planning and getting approvals is a multi-month to often multi-year process with often unknown timelines or outcome even, that is where a lot of emphasis has to be placed to increase affordability. If land could be used for 17, 22 or 25 units will make a big impact on price, for example.
For example, I am involved in a land development project in Oliver, BC right now where we have to widen a curved road ie cut across a very small (say 3 to 5 sqm) plot behind some sheds to put in a new road onto non-ALR land and underground services. This 3 to 5 sqm is on ALR land and usually ALR council gives such permission but its a 6 months process, with unknown outcome, that substantially increases project risk and thus, serviced land costs, thus housing price. [ For those interested here are the allowed ALR uses http://www.bclaws.ca/civix/document/id/complete/statreg/171_2002 .. ours would be section 3 (permitted uses in ALR) item (4) d.1
In a second project I am involved in the building inspector outright refuses new building material as he is not familiar with it, also causing massive delays, thus costs.
A third example is the building code that restricts or disallows certain common sense approaches such as spiral staircases to create cheap attic space for use etc
Also keep in mind many immigrants [ me included ] come here because they can buy land and love large lots or large houses. Its part of the appeal to immigrate to Canada. Have a drive through Richmond or Surrey or Vancouver Island or Sunshine Coast or Fraser Valley for ample proof of that theory.
Hi Thomas, I didn’t say anything about banning large lots or banning land purchases, not sure where you read that in?
Only that having policy that measures affordability on whether or not large lots are affordable is absurd.
People don’t live in land, they live in floorspace. Housing policy should be about ensuring thats costs (in constant dollars) per unit of floorspace (all your sub components but especially land) go down over time, not up. Whether not, under such policy, immigrants (or non-immigrants) can afford large lots in the city, isn’t really relevant. Just like transport policy should focus on ensuring people can more around, not whether or not Ferrari’s are affordable.
While all your listed subcomponents are important, land cost (in constant dollars) per sqft of floorspace is the most significant cost in Metro, the one that has increased the most, and it’s price is mostly set by zoning policy. Banning apartments on most land across a region, net new residents only permitted to move to tiny slices of land, raises land prices per square foot of floorspace.
Land is priced (in Metro areas) per sqft of buildable space. Restrict the # of buildable sqft and people are going to bid them up and that will get reflected in the price. We could lower the cost of housing in Metro tomorrow by legalizing 6 storey apartment buildings on every lot, every neighborhood. The price (of land in constant dollars per square foot of floorspace) would go down before anything was even built, simply because the scarcity premium on permitted square feet, would go away.
If you can add a laneway or carriage house behind it can be. new housing and nothing gets sent to a landfill.
You’re on to something.
I agree with Presswords, Matt and Bob. The value is in the land, not necessarily the house. Average-sized houses on small lots could go a long ways to lopping chunks off the list price. Even better with two small houses on one small lot. The ubiquitous 10 metre Vancouver lot should be declared obsolete on its own.
Raising a house and rebuilding the foundations costs about $150,000. Why not do that but also move the original structure forward into the old over-generous frontard setback of really large lots, approve two more small houses in back, add rental suites in all homes to afford additional family income, and also allow one additional unit somewhere as an incentive for keeping and rebuilding the original house?
The unfortunate reality with small lots is that most are treated the same as larger lots under the zoning bylaw. Most half lots were subdivided and built out with ~2,000 ft2 houses almost 50 years before the zoning bylaw appeared. They achieved a comfortable 1.0 FAR and cozy small front and rear yard setbacks pre-WWI. But today they are zoned 0.7 FAR after the fact and, though technically non-conforming, have a very nice fit in most older neighbourhoods and form one of the myriad of responses to the affordability crisis.
Building more homes on less land at comfortable densities is not astrophysics, but it does demand a sense of good design and proportion to get it right. That seemed to be an intuitive thing in the Edwardian era.