Making Apartments Work Harder: the 3rd Bedroom Challenge

by Michael Mortensen, MA MCIP, RPP – a Vancouver Developer & Planner Abroad m4mortensen@gmail.com | www.plan-tlc.com ©2016

Preamble: This article was referenced in a Vancouver Sun story on April 7, 2016. As a planner, I do think there should be a legitimate debate about what constitutes a third “Bedroom” from the perspective of Planning and Zoning Bylaw requirements. This blog post explores how we can design more efficient 2 bedroom units to potentially yield a third bedroom / flex space (ie. I would not expect that all the examples herein would qualify as “3 Bedroom” units from the perspective of Zoning Bylaws).

We definitely need more 3+ bedroom units in the supply of new development projects. An approach that requires direct outside windows for two bedrooms and some flexibility on the location of a third bedroom is an interesting one that should be explored and tested (pilot projects are a great way to test these issues quickly and get some good post occupancy evaluations).  As part of a broader mix of conventional 3 bedroom units, those 3Bed+ units with an “inboard” bedroom could significantly increase the number of  units suitable for families with children while also addressing affordability.

Michael Mortensen
Updated 7 April 2016


In a previous article, I asked, ‘how can we make our inner suburbs work harder to accommodate more people in housing that is more affordable and fit for purpose, better adapted to the changing demographic of our society?’ The same question can be asked of our existing multi-family areas. How we can make new apartments and smaller homes work harder – particularly to better accommodate families without drastically increasing unit sizes and costs? Read on to see how a couple design experiments can be used to generate a set of principles for getting a 3rd bedroom into an existing two-bedroom floor-plan. What conventions must we challenge? What rules do we need to flex?

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Can we turn this into a 3 Bed?

The 3rd bedroom challenge

Space and affordability have always been challenges to accommodating families in high density urban environments where land and construction costs are typically high. The low availability of 3 bedrooms has become a big issue in Greater Vancouver’s political and planning arenas (story here) – there simply are not enough 3 bedroom units being built. Developers generally find that these units require more space and are harder to sell because of their price points. Cities are increasingly moving to require a mix of larger units in new development approvals. This can help with supply but not as much with cost. With high land and construction costs, I think we need to approach the challenge of the third bedroom with a little more creativity and also by looking hard at how we design two bedroom apartments so they can flex more.

From a design perspective, it is fairly easy to design a studio, or a one-bed or two-bed unit within the envelope of a typical apartment. The way our buildings are put together, units are typically 25 to 30 feet deep accessed from a 5 foot wide common area hallway that is connected to a core with stairs and an elevator or two; the width of the apartment can be adjusted to fit the number of bedrooms required. However, you generally need exterior perimeter windows for each bedroom, and this is the major challenge in getting a 3rd bedroom into the mix without drastically expanding the overall floor area of the unit.

Typically a 3 bedroom flat in a slender tower requires a high-value premium corner location. One solution is to allow some “inboard” bedrooms with operable upper clerestory windows that allow for some natural “borrowed” light and ventilation while affording some privacy. City planners have long wrestled with these issues, and from a policy perspective they are often uncomfortable with the livability tradeoffs inherent in living smaller (some of the debate here and also a good summary of the issue by Frances Bula of the Globe and Mail here).

Key interests include

  • Natural Light
  • Adequate Ventilation
  • Visual Privacy
  • Acoustic Separation
  • Storage

A plan from Wesgroup properties illustrated in the Vancouver Sun article illustrates this challenge nicely: “placing all three bedrooms along the exterior walls would require an extra 264 square feet of space. If the condo were sold at a relatively reasonable $600 per square foot, that would add nearly $160,000 to the purchase price”. The “inboard” third bedroom (image on left, below) addresses most of the key interests above with some “borrowed light” and some system of ventilation. I think the plan could be further improved by flipping the location of the bathroom to the more inboard location (pushing the bedroom closer to natural light and ventilation) and perhaps by also shrinking the size of the bathroom, eliminating the tub in favour of a small shower.

wesgroup

Wesgroup Properties space-saving inboard 3rd bedroom

Existing Design Guidelines
The City of Vancouver has had design guidelines in place since 1992 for accommodating families with children in high density environments (here) – the result of a “living and families first” approach to redeveloping many of the older industrial areas in the downtown core. Through the 90s many places were redeveloped complete with parks, schools, day cares, and grocery stores – the infrastructure that’s needed to support families. Many of the City’s guidelines deal with the location of buildings and the arrangement of outdoor play space and common areas. With respect to unit designs, they call for a minimum of 2 bedrooms each with sufficient area to accommodate a single bed, a dresser and a desk or table with some floor space for playing. Acoustic and visual privacy are flagged as key interests that can reduce the feeling of overcrowding. Add to this some space for bulk storage and entries that can accommodate extra coats and the stuff that comes with having kids.

Growing pressure for better design
The pressure for family-friendly units in our downtowns will only grow with the increasing cost of ground-oriented townhouses and single-detached houses. Increasingly, families are trading off space in favour of the convenience and amenity of high density housing in city centre locations. I’ve long had an interest in small space design. In 2005, the New York Times featured my family and others in a story exploring the growth of Vancouver’s downtown “One Family at a Time“. More recently the NYT published an article on “Growing Families Staying Put” in NYC flats.  Local  contributors  in Vancouver include Adrian Cook’s excellent blog 5Kids1Condo which chronicles his family’s compact lifestyle in the propinquity of our lovely downtown.

These wider cultural trends are also reflected in the success of shops like Ikea which make small living easier with furniture and accessories that make better use of existing space. People are hungry to adapt their space for livability, economy or convenience and more intense use.

ikea

The need is great and sometimes it sneaks up on you. Many young households living in the downtown eventually start families and find themselves trying to adapt their apartments meet their new living requirements. Some, for example, convert enclosed balconies into an additional bedroom – not the most comfortable arrangement as many are not insulated as indoor spaces. We need to do better.

Feedback on current designs
In 2008, UBC Planning Students conducted a post-occupancy study of North False Creek residents under the direction of former Vancouver Director of Planning and Professor Larry Beasley. They found that families generally sought more flexible, adaptable space with a bit more storage and fewer walls and design constraints (summary here).

The 3rd Bedroom Challenge

Picking up on these themes, I challenged myself to take a few two-bedroom designs currently being marketed in Vancouver and elsewhere to see if I could fit a liveable third bedroom into the same space. What would I have to change? What rules and guidelines would I have to flex?  The Experiments are illustrated below but what follows immediately is a summary of what I learned after playing this game.

Principles for harder working apartments

  • Use Open Concept design
  • FT2ŸHours: Design for “24 hour use of space”
  • Rethink Bedrooms
  • Use Borrowed Light and Alcoves for “Inboard” Bedrooms
  • Use Space Above and Below For Storage
  • Layer  Uses
  • Eliminate Design “Fixes”
  • Rethink Space Priorities
  • Take Advantage of Household Micro Trends

Use Open Concept Design
Open concept designs avoid space-wasting vestibules and hallways. They have more light and air, direct views outside, and they give occupants the perception of more depth and volume. This is particularly effective if the same flooring flows through all of the unit.

FT2ŸHours: Design for 24 hour space
Many people focus on simple square footage as a measure of livability. However as prices for new apartments rise, I think it’s also important to look at the temporal element as well. Some years ago, I coined the term “square-feet-hours” to describe an apartment based on its area but also on the amount of time those square feet can be useful. In my view, an important design goal should be to make expensive real estate flex its function more for the convenience and benefit of its occupants. For example, if a 100 sf space is only useful 8 hours a day, then it should be discounted or valued at “33 FT2ŸHours” on that basis. That’s why some large apartments seem small – too much space is functional for only part of the day. Too often I see unit layouts where 50% or more of the unit is dedicated to bedrooms, built in closets and en-suite bathrooms … all of which are really 8 hour spaces; little open space is left for the other 16 hours of the day.

Accommodating larger households means one has to provide more bedrooms AND more social space (generally ‘open use’ space that can be used 24 hours/day). This forces a wider rethink of the form of bedrooms (see below) and it challenges us to create more flexible shared open space within units.

Rethink Bedroomspattern language

In A Pattern Language (1977) the architect Christopher Alexander questions the concept of a single type of bedroom. He notes that in many cultures there are many types of sleeping quarters.“Bedrooms make no sense” he says. “The valuable space around the bed is good for nothing except access to the bed. And all the other functions – dressing, working, storage of personal  belongings which people stuff uncomfortably into the corners of their bedrooms  – in fact need their own space, and are not at all well met by the left over area around a bed.”

Use Borrowed Light and Alcoves
Alexander is onto something.  There are other ways to create private sleeping spaces and plenty of interesting precedents. Living in the UK and travelling in Europe, I’ve had the opportunity to tour many palaces with grand rooms for receiving visitors and entertaining heads of state; many of these rooms feature an alcove behind curtains or doors which reveal the bed of a past king or some lesser royal. You can find similar design in early North American homes.  Thomas Jefferson (the third President of the United States) placed his bedroom in a hall between two larger rooms. Why? Because he found it convenient! Alcoves – good enough for kings; good enough for Presidents; so why not good enough for us?  There are plenty of interesting alcove designs up on Pinterest that show how families can make better use of space with sleeping alcoves.

Sansoucci Palace

Alcove in the “Voltaire Room”, Sanssouci Palace, Potsdam Germany

Jeffersons Bedroom

Jefferson’s Bedroom, Monticello House, Virginia USA

 

 

 

 

 

 

 

 

 

Sleeping Alcove

Contemporary Alcove Beds

Inboard Bedrooms
Squeezed for window perimeter space, one might consider creating an alcove or a small inboard room that has operable upper transom windows that allow for light and air. The concept of new purpose designed bedrooms with borrowed light is contentious in the planning and design community but it has been used in limited applications with guidance to ensure there is enough borrowed light and air circulation (for example, for heritage conversions where the depth of the building compels the solution). This solution could perhaps be extended on a limited basis to a third bedroom where it was not otherwise achievable with direct light. Glass walls and sliding doors offer better light and ventilation.

borrowed-light1

Inboard bedroom with borrowed light.

 

Use Space Above and Below For Storage
Storage is another issue for families, particularly those with children who generate a lot of stuff.  Designs that make use of floor to ceiling storage and volumes below furniture (beds, sofas, seating) or flooring are very useful. Here I am also thinking about traditional Japanese house designs that make use of under-floor storage.

Layering Uses: Multi-functionality saves space
Where possible, make floor space do double duty. A good example is a linear kitchen that doubles the use of a hallway corridor for kitchen circulation space.

Eliminating Design fixes: Negative space creates more use options
Decades ago we designed rooms without built in closets. People instead used wardrobes to store clothes and placed these pieces of furniture within rooms as they saw fit. However once you’ve designed and constructed a big walk-in closet, that’s it – there is little flexibility as few people are going to tear out drywall and steel studs and (possibly) re-route wires and sockets if they want to use that space for something else.

By leaving that space open, we can make more use of a bedroom and accommodate an office or storage or another bed. Yes this is leaving a bit of work or expense to the owner or renter, but that’s the way they do things in other places. Consider what you get as a renter in Germany, for example: your flat comes as basically a vanilla shell with a kitchen space that has only electrical outlets and plumbing connections (example below from Munich). You as the tenant bring your own cabinets, counter tops, sinks and appliances.

Rethinking space priorities: Do you really need 3 bathrooms?
In the Pedestrian Pocket Book (1989), Doug Kelbaugh observes,“Europe has its cafes; America it’s bathrooms. What America needs is more espresso, and less plumbing.” Do we really need three bathrooms in an apartment? Just after the Second World War, the average North American family of four lived in about 1,200 sf with generally one full bathroom. All that plumbing requires expensive space, mechanical and electrical services, fixtures, millwork and and finishes. Can we get by with a full bathroom and a second toilet room?

Take advantage of Household Micro Trends
Compact technologies are replacing many large household items. For example, a new iPhone is a bit like a Swiss Army knife: it replaces stereos, land line phones, cameras and video cameras, video players, clocks, alarm clocks, timers – literally dozens of things that probably now sit unused in our drawers. I am also particularly intrigued by new lines of compact adaptable furniture that offer fantastic versatility and allow layered use of precious apartment space. This amazing video by Resource Furniture is well worth your time. Such great ideas for making multiple uses of space convenient and cool.

 

So on to my experiments … more to follow


3rd Bedroom Experiments

Experiment 1: Eliminate Walk In Closets

In this experiment with an 830 sf 2 bedroom flat, my attention was drawn to the large amount of space dedicated solely to a walk-in closet with access to an en-suite bathroom.

Get rid of closets.jpg

Removing the walk-in closet and the access to the bathroom eliminated a “Design Fix” and opened up enough space to create two queen-sized loft bed sleeping quarters divided by a sound-insulated set of shelves. Each loft has storage below and there is enough room for a long work desk. The sleeping quarters could be fitted with screens for visual and acoustic privacy if needed. If the room was not needed for kids, it could easily be furnished for an adult with options for wardrobes or a small home-office work space.

Some work was needed to create more of a “Master” bedroom out of the other bedroom – primarily through the use of furniture for storage along the wall rather than a typical bed headboard. Notice also the full use of vertical space for storage.This created enough storage so that we could re-purpose the space previously designed as a bedroom closet – converting it into a work station facing the kitchen, re-oriented to the social “24 hour” part of the apartment.

Another view below:

eliminate closets closeup2


Experiment 2: Layer Uses and Add Storage

In the 990 sf two-bedroom apartment below, I was looking for some perimeter wall to use for a third bedroom. The dining nook looked like a good target so I took a page out of Japanese small space design to recreate an eating area with under-seat storage and a double size “Murphy Bed” that could fold down at night.

Futon Nook

The result is a generous flexible eating and sleeping area with plenty of storage. Shown below is a double sized Murphy bed tucked into one wall. Like a ship’s galley, the tabletop can be dropped before the bed is lowered. The downside might be sleeping next to the kitchen with the attendant hum of the fridge. However, the nook could also be screened for visual and acoustic privacy and it does have plenty of natural light and ventilation.

 

I am interested in your ideas! Let me know what you think. I will probably add a few more examples as I work on them.

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Tackling the Supply and Affordability of Housing: Lessons from London

tackling housing

Thoughts on an article by Alex Steffen in the Guardian and an old BBC Documentary.

A thought provoking article flashed across my screen today from Alex Steffen from the Guardian (click on image below for article). And by chance I also came across a surprising BBC VIDEO this week that explains a lot about the UK housing industry.  The two are fantastic as a pair of bookends to some of my recent thinking on housing supply on this little island. I’ve posted the video at the end of this article for your viewing pleasure.

From my vantage in London UK, and my place in the development industry and as a prospective homeowner, I feel this issue quite personally. Housing supply in global cities is a complex, wicked problem. We need to look at the the housing supply systemically and cohesively from the beginning of the supply chain right to the end.

Unaffordable

I find the winds of housing policy unpredictable here in the UK – clumsy, blunt and often cross-purposes. The market and industry is not functioning properly – how else can one explain Greater London’s anemic supply of less than 20,000 new units for year, every year for the past decade – in the face of net in-migration of 100,000+ people per year? My hometown of Vancouver BC – a quarter of London’s population – produces about 20,000 units for about 30,000 to 40,000 new migrants annually.

Steffen writes that regional and local government needs a step change in how they plan and review development applications:

“In order to build that kind of housing we need efforts that are new not only in scale, but in approach. We can build some housing incrementally, without changing the skyline or cityscape, but not anything like enough. To produce enough homes to matter, fast enough, we’re going to have to fundamentally alter parts of our cities. That, of course, demands a local government willing and able to plan and permit such widespread change. It also takes an array of home-builders doing the actual work, often in more innovative and low-cost ways …”

Steffen also begins to address some facets of the wicked problem mainly from a design perspective but he stalls at form, forgetting other complex systemic pieces of the puzzle:

Combine compact development on a large scale with a push for more sustainable urbanism, and we can see the outlines of cities that will work in the 21st century take form. We can enable low-consumption lives through better public services and sharing systems. We can convert excess roads and parking lots into great streets, green spaces and parks, making denser neighborhoods nicer to live in then they were before and more resilient to weather extremes. We can promote green building and more sustainable water and energy infrastructure, making rising prosperity even more ecologically frugal. We’re only just glimpsing how much hope for the planet rests on getting cities right.”

What’s missing?

  • A vibrant productive market housing development industry … given the demand, why is the UK’s private development market so stunted? Perhaps it has something to to with the regulatory environment and a history of state intervention in the market over the decades following the Post WWII housing emergency  …. watch the video at the end of this story!
  • Simplify Land and Housing Purchases – Why should a land assembly or home purchase take 6 months or more to process before you have a firm deal and a fixed purchase price?!!! End the insanity and unpredictability of Gazumping (see funny article on same) for land assemblies and for housing purchases. The UK should move to the system we have in Canada and Scotland. Simple, binding agreements of purchase and sale with “subject to” conditions to protect the buyers. The system in the UK is hopelessly tilted in favour of sellers.
  • Foster a Pre-Sale Culture: Pre-sales reduce risk for developers and offer purchasers supply and choice provided there are commensurate protections for buyers (ie. developers bound to deliver what is promised in the marketing agreements). To reduce risk in a business environment where many people do not buy “off-plan”, most developers in the UK build in small phases and trickle units onto the market. This is a major factor in the anemic supply of housing in the UK and in other cities.
  • Reconsider Stamp Duties: These are major extractions from UK homeowners, much higher than those in other developed countries.
  • Move to a “Specific Performance” system for property purchases – Pre-sales need to be backed by enforceable agreements where the purchaser is responsible to close as agreed. Purchasers who enter into binding agreements must put more than their deposits on the line if developers are to take bigger risks and build in larger phases to house more people in less time. Reduced risk = lower costs, faster development timelines and more choice for home hunters.
  • Simplify Section 106 requirements (“Community Amenity Contributions” for my Vancouver friends)
    National and Local governments have progressively downloading their responsibility to invest in social housing to private developers. Tower Hamlets in Greater London for example has a policy requiring 50% social rent units in a development … really?! Who do you think is paying for that at the end of the day? …. you, the end user. Developers DO need to pay their fair share for new physical and social infrastructure, but there needs to be some reasonable quid pro quo system for providing amenities commensurate with intensity. 

But be wary of large State-Driven Housing Development

I am hearing major moves to have local governments and housing management associations jump en masse at scale into the development business to solve the nation’s housing crisis.  Is this a wise idea? I’ll let you decide, but history shows that it’s not their core business.

Housing supply in global cities is a wicked complex problem. We need to look at the problem systemically and cohesively.

Do we need a “NEW Vancouver Special”?

Do we need a “NEW Vancouver Special?”

CBC Radio 1 Interview here

I’ve often thought Vancouver needs a “New Vancouver Special” – a new type of ubiquitous infill housing that addresses affordability, the high cost and limited supply of land, and the scarcity of ground-oriented housing typically favoured by families.  There are some lessons that can be learned from the Old Vancouver Specials – those boxy but roomy, poorly insulated one-up-one-down duplexes popular in Vancouver from the 1960s to the 1980s.  Can we adapt that old model to create …

  • Development that houses more than two families on a lot?
  • Infill that is attractive and more in character with local architecture?
  • Housing that is affordable and quick to design, approve and build?

And like the old Vancouver Special, can we make the new version something so tuned to market demands that it is widely adopted and becomes a part of the fabric of Vancouver’s neighbourhoods? What might surprise you is that some of these ideas already been designed and vetted by the City some time ago … but first a look back.

The OLD Vancouver Special
The Vancouver Specials that proliferated from the 1960s to the early 1980s are celebrated by some in our city as an iconic form of once-affordable housing. They were favoured by new immigrants to Canada, many of whom had extended families.  Simplicity and repetition were part of the reason for their success. Stock plans for small 33 ft. wide lots could be bought for as little as $65 in the 1970s, with all the info needed for a one-page planning application at City Hall (1). They were approved quickly and built almost as fast in many of Vancouver’s close-in suburbs. After falling out of favour in the 80s, Vancouver Specials are enjoying some new popularity today. Many people are updating them, finding value in their roomy volumes perhaps after beefing up insulation and replacing the single-pane aluminium frame windows.

Specials: Old and Modified

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*Photo Credit: Wikipedia, Google Image Search

The basic template for the Special was a two storey box with a low pitched roof; living, kitchen and dining rooms on the top floor, with balconies on the front and decks on the back; and bedrooms below.  It was easy to add another kitchen and convert these homes to duplex use. Builders finished the exterior with siding, brick or stone on the first floor and cheaper stucco above, a departure from the finishing of craftsman homes that were more typical of Vancouver’s older neighbourhoods. On a 33’ x 120’ lot, a builder could easily get two 1,500 sf levels for a total of 3,000 sf of gross floor area. Compared to apartments today, 1,500 sf of space for each of two families today sounds pretty spacious. Over a 3,960 sf site, 3,000 sf of development equates to a 0.76 Floor Area Ratio (FAR). Grossing up the land 30% to include road space, this type of development generates about 17 units per acre (UPA) which is 2 to 3 times the density of farther-out car dependent suburbs, but generally below the intensity of townhouses.

How could we adapt the idea of the Vancouver Special?
What if we changed the Old Vancouver Special to better meet for contemporary social, economic and environmental conditions?  A good start would be to break the building up to create more but slightly smaller separate units to house more families per lot, perhaps making better use of land by taking advantage of the efficiencies of assembling two to three lots. We may want to build the houses just a little bit higher – a 3rd floor perhaps with a sloping roof to minimize the apparent mass of the new buildings.  More people are cycling, taking transit and car sharing (saving money) so we could reduce parking requirements which frees up more land for housing people rather than housing cars.  One thing to increase would be energy efficiency and environmental performance. And perhaps we could even take affordability a bit further by sharing facilities that would otherwise consume space within each of the homes (i.e. shared laundry or workshop space).

What would New Vancouver Specials look like?
Well, this is where we are in luck – because a few years ago Patricia St. Michel, an Urban Planner with the City of Vancouver and a colleague from my planning days there, led a team that developed a series of prototype infill plans that capture the ideas above.  Working with residents in the Cedar Cottage neighbourhood, they developed “RT-10 and RT-11” Zoning and Guidelines which are worth a closer look (2).

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The zoning and design guidelines illustrate some prototype dwellings that can be organized on assemblies of two to three small lots. They intensify the use of land but they also respond to the rhythm and fabric of the neighbourhoods in which they sit. In some cases, setbacks are varied; in others, they remain consistent. The designs typically create multiple buildings with internal green spaces for privacy and relief. They all accommodate parking which could possibly be relaxed further in areas well served by cycle routes, transit, and car share.

Where could we build New Vancouver Specials?

  • Vancouver’s downtown peninsula comprises 5% of our land but houses 10% of our population; the predominant building forms are mid-rise and high-rise apartments, so New Vancouver Specials are not really going to work here.
  • Outside of the downtown, the first ring of “Streetcar suburbs” from the early 1900s (i.e. Kits and Mount Pleasant) comprise 10% of land but house 15% of the population. A mix of housing, predominantly multifamily in character, defines this area. New Vancouver Specials could work here, but they are perhaps still a bit too low in density to compete with higher density options.
  • Looking further out, Vancouver’s low-density suburbs account for 85% of the land, but only 75% of our population. There may be opportunities there – ageing suburban neighbourhoods well supplied with amenities like parks and undersubscribed schools.

Geographic context

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A Quick Case Study
With deference to Patricia’s superior design skills, I pulled together a quick SketchUp model of what a New Vancouver Special might look like using two 33 ft. x 120 ft. lots in an existing Vancouver neighbourhood. I picked a suburban location close to transit, parks and schools. The plan has a cluster of four 4 bedroom homes at the front of the property – each with a 500 sf floor plate and three levels, yielding 1,500 sf of space per home. Three 2-level coach houses at the back of the property yield a 1,000 sf 3 bed unit and two 500 sf one bed/studio units (two have parking below). BC’s Strata Property Act could be used to legally divide up the property into Strata Lots and Common Property. Grossing up the land 30% to include road space, this development generates about 30 UPA which is on par with ground-oriented town house development.

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What would New Vancouver Specials Cost?
A back-of-napkin financial analysis is shown below. The cost of land is the largest factor, followed by hard construction costs, and then soft costs which include design, permits and fees, insurance and construction finance costs. A “prototype design” vetted by the City might reduce the design costs and expedite the approvals process. An unknown would be the contribution the City may seek for the additional density (the difference between the 1.0 FAR proposed from the 0.78 FAR existing). For simplicity and clarity, I’ve just looked at Land, Construction and Design Costs, factoring in a modest 15% development profit.

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Therefore, based on an average cost of $551/sf, each of the units would be priced as follows:

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If $500K is added to the cost of each lot – either through the land price or CAC’s or a combination of the two, the “all-in” costs increase to $695/sf, and the homes begin to look considerably less affordable.

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Conclusion
This quick design and analysis suggests that residential uses in our outer suburbs can be intensified with New Vancouver Specials but the economics are very sensitive to land prices and additional Community Amenity Contributions. With land costs at $1M per lot, the cost of new housing generated is not going to be cheap but it is going to be competitive with new mid and high rise development, the added benefit is ground access and perhaps more space for your money. Higher land costs clearly frustrate the viability of this type of development.

What do you think?

References

BC Property Transfer Tax “Double Dips” – time to review the tax?

Overtaxing

A recent story in the Vancouver Sun had me thinking about the BC Property Transfer Tax (PTT). Most observers focus on the tax on residential units, but that’s only part of the story. The PTT is actually collected twice for a new development. When you add on the PTT on the cost of the land to the PTT collected on the sale price of the unit, the resulting “Double Dip” can total up to 40% of a homebuyer’s down-payment.

Here is an example based on an urban inner-city development with 100 apartments. The example assumes the purchaser has a minimum down payment and is not eligible for a PPT discount. Note that even if a home buyer qualifies for a discount for the PPT on their apartment purchase, the cost of the PTT on the developer’s land purchase is already embedded into the cost of their unit. It’s a hidden double dip.

Calculation

Given the affordability crisis in the Lower Mainland, is it time for a wider review the BC Property Transfer Tax policy?