Zoned

In 1978 the boring little house sold for $55,000. Last Wednesday it changed hands for $2.852 million. That was about four hundred thousand more than assessed value, of which $2.474 million is ascribed to land only. The lot in Vancouver’s Kitsilano hood, by the way, is 33 feet wide and 122 in depth.

So the structure is worth maybe twenty grand – a 1932 building made of wood, updated inside sometime since WW2. Here it is…

So how is this remotely possible? The average YVR salary is $69,500 and the median family income is $99,610. Even the average detached home in the city ($1.9 million) requires an income of at least $237,400 to carry. What idiot wealthy enough afford to lay down $2.8 million for a wee dwelling would choose to live within its inadequate and downscale walls?

None, of course. This was a speculative play. And governments are directly responsible. Yes, poor Sean Fraser, the federal minister, BC’s Dipper premier, David Eby and the city boss, Ken Sim. 3415 West 13th Avenue may be a textbook example in how not to deal with a housing crisis.

Howcum?

Simple, politicians have decided we need more houses, that cities should be democratized and exclusionary zoning is a bad thing. Enclaves of leafy streets filled with single-family homes are hurtful reminders to the envious young that wealth inequality exists. The simplistic kneejerk solution is to densify them with ‘missing middle’ units by letting builders knock down bungalows and replace them with hulking multiplexes.

In BC the province actually mandated it. Bill 44 was passed by the NDP majority less than three months ago ordering municipalities to allow four units on a single lot, or six if the property is near transit. This happened about the same time Vancouver went even further – trashing low-density zoning in a unanimous vote by city council. Local politicians have greenlit up to six strata (condo) units or eight rental units on individual lots previously reserved for single-family homes.

Said the mayor:

“We are taking bold action on the housing crisis. Today’s motion marks a significant milestone in our ongoing efforts to enable missing middle housing,” says Mayor Ken Sim. “That’s attainable housing for families who are being priced out of our city. That’s why, we are not only making policy changes, we’re forging a path towards a real solution. We understand the urgency of those who call this city home, and yet are struggling to afford just to live here. We are fully committed to exploring every avenue so Vancouver remains a place where people from all walks of life can find the homes they need.”

And, thus, the door was swung open for the feds to pony up – gushing $115 million in funding through an announcement made last month by the prime minister and his sidekick, Minister Fraser.

Said the PMO: “Under the Housing Accelerator Fund, this agreement will provide almost $115 million to eliminate barriers to build the housing we need, faster. It will allow for high density development including multiplexes and apartment buildings, help fast-track development processes, and build housing near public transit. As part of the agreement, Vancouver will work to streamline re-zoning laws, expand affordable rental programs, cut red tape, and unlock non-market housing.”

All this, the three levels of government said, will “significantly improve the way housing is built in one of Canada’s largest cities.”

Well, guess what?

That 33 by 122 Kits lot currently hosting one tired house assessed at $2.4 million by the province can now be developed – quickly, fast-tracked, streamlined – into six units. To be relatively affordable in a city when SFHs command just under two million, these units could be attractively priced at just over $1 million each. Building costs in YVR are slightly under $400 a foot, so the multiplex could be erected for about $2.2 million. Profit on the project would be approximately $1 million.

Proponents (and politicians) would say that providing housing for five more families – albeit in 1,000-square-foot condos – achieves a social goal. The bankers are happy because they get to write six mortgages, likely for a total indebtedness of more than $4.5 million. Academics and urban planners are aroused that ‘middle-income’ accommodation has been created. The lefties we’ve elected at all levels are satisfied that areas once the bastion of middle-class and Boomer wealth are being democratized with more cars, kids, density and activity.

But, of course, the changes rendered this sad, old house worth $2.8 million. Likewise, they’ve made all the places on the street, and surrounding ones, worth an equal amount. By increasing the investment potential of the land, valuations have forever been altered. Securing a traditional home on a piece of its own dirt has become more of an impossible dream.

And existing homeowners? They’ve been handed a winning lottery ticket, thanks to the three stooges.

About the picture: “Here is a picture of Leo the golden doodle,” writes Sylvia.  “He has been a delightful addition to our family. He would really enjoy being featured on your blog (he is a huge fan). Thank you so much Garth. I really enjoy your blog and have learned alot from it.”

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