In an effort to ease tensions from residents of the city who feel they are being “squeezed out,” the City of Vancouver, through a statement from the Mayor, has hinted that it may be taking steps towards densifying some of the city’s traditionally single family zoned neighbourhoods.
This would likely mean more duplexes and townhouses scattered throughout the east and west side, but it could also be the writing on the wall for more condo developments, which could help to offset the disparity between supply and demand in the current condo market.
According to the latest statistics from the Real Estate Board of Vancouver, the sales-to-actives ratio for Vancouver East and Vancouver West are 0.6 and 0.54, respectively. To put that into perspective, a healthy and balanced market has a sales-to-active ratio of around 0.2 and anything over that number spells a market that is weighted in the Seller’s favour.
However, one of the biggest obstacles to densification in Vancouver, aside from a lack of multi-family zoning, is a city policy requiring any home older than 1940 to undergo a “character retention review” prior to demolition. If the home is deemed by the city to have significant character value, the homeowner will be penalized on their new construction square footage allotments, should they decide to continue with their plan to build new.
Conversely, the city will often give incentives to a homeowner who opts to renovate a character home and retain its character features instead of building new. However, in cases where a home requires an extensive revitalization, as is the case when a home needs repairs to or replacement of its foundation, the cost of such an upgrade can sometimes reach into the hundreds of thousands.
Such policy can cause a potential buyer, who may be looking to build a new home, to overlook a property, effectively shrinking the home’s buyer pool and lowering its overall market value.
Recognizing that this policy may need to be updated to reflect the concerns of our current market and address, city hall is implementing an update of the Character Home Review policy, part of a municipal program tackling housing affordability labelled the City’s Housing Reset, which was introduced in 2016.