Four Steps to Affordable Rental Housing—Step 4, Supporting it
City Conversations We Should ALL be Having
This is Part 4 of the “Four Steps to Rental Affordability” series of City Conversations We Should ALL he Having. Part 1 talked about the definitions of affordable housing; Part 2 looked at the approach Burnaby is taking to require rental affordability. Part 3 considered how to prioritize the creation of affordable rental housing. This Part looks at ways to support affordable rental development across the broad lower density swaths of the city.
Supporting the swimmer—floaties?
“In spite of my somewhat caustic comments about the involvement of government in the confusion of affordable housing,” I continued after our beer break, “there are key roles for governments in all of this, which we need to support.”
He awaited my thoughts.
“Our discussions about definitions, requirements and prioritizing have generally focused on larger, multiple unit developments. I’ve so far ignored the opportunities to create affordable rental housing within our current so-called single family home (SFH) zoning district, which cover about 70% of the city’s geography and contain about 68,000 homes, according to the current Mayor’s estimates.”
My son interrupted. “Why do you say ‘so-called single family home zoning districts’? Isn’t that where your home is located?” I smiled before answering.
“Various haters of SFH love to beat up on the RS zoning districts—I think RS stands for Residential Single. I am regularly sent articles about the destruction of SFH in California, in New Zealand, in Minnesota, you name it—the implication is that we are way behind other jurisdictions in their elimination of SFH zoning districts. But the facts couldn’t be further from the truth.” He waited patiently for me to continue.
“There has been virtually no single family zoning in Vancouver for several years now. It started with the legalization of secondary (mostly basement) suites. That was the first tough slog.” He raised his eyebrows in question.
“We tried to convert our basement playroom into a suite as soon as you and your sister aged out of playrooms…although there are days when I think you two still need an indoor space to dress up and play fort.” He grinned at those memories. “But for years, city councils and staff worked actively to prevent legal secondary suites, originally in zoning bylaw provisions, later in building bylaw impediments.”
“Even after secondary rental suites were legalized, building regulations made them incredibly expensive and impractical.”
“How do you mean?” he asked.
“We looked at installing a basement suite early on, but the minimum height requirements for a suite were so high,” he looked puzzled, knowing I am the tallest person in the house at 5’-8” (1.7m), “that we would have to raise the entire house, costing tens of thousands of dollars. It made no economic sense. For a long time there was also a requirement that installing a secondary suite required the entire building be sprinklered, another tens of thousands hit.”
“So what changed?” he asked.
“City Council listened, something they have largely forgotten how to do this past decade. Many Vancouverites pointed out to successive Councils that the regulations were too restrictive, causing creation of patently unsafe suites.”
“What do you mean by ‘patently unsafe,’ Dad?”
“Well, for example, the suite we have ended up with after all these years has three exits—two would have been sufficient but the building inspector required a third. Many illegal suites have at most one exit, often too narrow.” He nodded, having seen a few like that.
“Many illegal suites were unsafe—in addition to insufficient exits, they had no fire barrier, what we call fire separations, between suites, that sort of thing. They were also just downright poor quality—no acoustic privacy, poor insulation, or none, for example. But eventually Council concluded that we would never get away from illegal suites so long as the costs of legalizing were so ridiculous. For us, their principal concessions were eliminating the full sprinklering and reducing the minimum height requirement to 6’-8” (2m), the height of a standard door, which seems logical.”
“Did you have to do anything else to convert the playroom to a suite?” he asked, so I continued.
“To be clear, there are requirements for fire separations and interconnected fire alarm systems, for minimum thermal and acoustical insulation requirements, which in most cases we exceeded because I thought the minimums were too minimal. In the end, the exercise cost us more than $100,000, but it’s been worth it—after all, both you and your sister have lived in the suite at various times, and we now use it for my home office and guest accommodation.”
“But you’ve never rented it out to others, Dad, so how does that help create affordable housing?” I nodded as I continued.
“Although it’s easier to create a safe, pleasant and legal secondary suite now, there are still many impediments. The permitting process, the insurance costs and tenancy regulations have all worked against us renting out the suite, not to mention using it for my home office and the guest room function.”
“The permitting and inspection processes were lengthy and somewhat arbitrary. We had three different building inspectors at various times during construction—each felt they were entitled to add new requirements to the construction.”
“But you’re an architect!” he interjected, gesturing to the skies with his hands.
“And I didn’t dare mention that, because it was clear the inspectors had no respect for that. In fact, one smiled at me as they exited after an inspection where they had added requirements that required undoing some work that complied with the approved drawings, saying ‘If you disagree with me, I could make you replace that old handrail from the main to the upper floor,’ which floored me—it wasn’t even in the part of the house with the suite. In my opinion, the inspectors should have supported what was in the suite design, rather than layering new requirements. This is, unfortunately, a common occurrence.”
“You also mentioned insurance requirements,” my son added, to change the focus.
“Yes, I contacted my home insurer a couple years ago to inquire what would be the home insurance cost premium if we decided to rent out the suite. They asked a few questions, noted that their records did not indicate there was a potential suite in the house (I had answered all of their questions truthfully when we originally applied for insurance), indicated our home insurance would increase about 50% on the basis of that phone call regardless whether we were renting out the suite.”
“But you weren’t even renting it out!” my son interjected.
“Correct—the insurance hit was simply because our home includes a legal suite that we might someday rent out.”
“What did you do?” he asked.
“After trying to reason with the agent and their supervisors, to no avail, we changed insurance companies. I made sure our new insurers were aware of the ‘potential’ rental suite, paid a 10% extra premium just for that potential—they did say our insurance would increase another 40-50% if we actually rented out the suite, but at least the initial hit was reduced. It would have been nice to have more support from the insurance industry.”
Visibly shaken by the insurance issue, my son asked: “You also mentioned tenancy regulations. What do you mean by that?”
“Provincial regulations around renting don’t vary much as between a secondary suite in a home and a large multiple unit building. It’s almost impossible to evict a bad tenant, who can be very disruptive and destructive to a property. Rent increases are held down pretty much to inflation, while utility costs, insurance, property tax, etc., increase much more. Vancouver even hits you up for an annual business license if you’re renting to anyone other than family. It all increases unaffordability.”
“What about a laneway house?” My son changed the subject. “Weren’t you going to do one of those?”
“In fact, I was the person who tabled the idea at the First EcoDensity Forum in 2008, so I decided to check that out when the city finally adopted the concept and developed enabling regulations. Boy, what a disappointment!”
“How so,” he asked.
“At the time laneway homes first became legal, construction costs would have been about $200 per square foot—they are now $300 or more. So the 550 square foot (+/-) that our 33’ (10m) wide lot would support would have been about $110,000 if we had built it when it was first allowed.”
“That’s about the same floor area as the basement suite that you did—how come you didn’t proceed?” he asked.
“Yes, the floor areas are similar—the basement suite is also about 550 square feet. And a one floor laneway building (no second storey) is the next cheapest form of construction after a secondary suite—until that is, you layer on the permit costs and crazy infrastructure requirements.” He looked puzzled so I continued.
“It quickly became evident everybody except me saw laneway homes as a great cash grab: significant fees for separate electrical and gas services; huge engineering charges for duplicate water and sewer connections from the street all the way back to the lane; and more recently, the possibility that increased requirements for fire department access, which for some reason can only be from the street, not the lane, will require full sprinkling of older character homes such as ours.”
“So what’s the financial hit?” he cut to the chase.
“About $30,000-40,000 is the current range of fees quoted by the city and other sources. If we have to sprinkler our existing home, double that.”
“So a $110,000 laneway home would require 30-40%, maybe as much as 80% more for fees and services?” He was looking askance. “Is there no way to reduce that?”
“Sure,” I answered, “lots of ways. In our previous discussion about prioritizing affordable rental, I tabled the idea of trusting professional architects and engineers with design.” He nodded. “Any engineer could quickly calculate for a laneway home the most cost effective electrical, gas or sewer connections, remembering the existing house also has those—I would bet that the cost of that custom engineering analysis and the resulting more efficient construction would be way less than those fees and construction costs for most properties.”
“So, Dad,” he concluded for me, “what you’re saying is that if the city’s fees and permits, the insurance industry’s much higher premiums and the provincial government’s excessive rental regulations supported the concept of making rental cheaper to create and operate, rather than extracting as many fees as possible and using regulations that hammer individual homeowners, then we would get more rental—but how much more?”
I smiled at his summary. “Each year about 400 laneway homes are built in Vancouver, in spite of all the impediments I’ve mentioned—overall there are 2,700+ laneway homes as of 2017, the last date for which the city provides data. There are currently more than 30,000 secondary suites in Vancouver—the city doesn’t make readily available how many secondary suites are created each year, but in 2021 there were about 1,000 new so-called single-family homes in Vancouver. I can’t remember the last time I saw a home built without a secondary suite, regardless of size or neighbourhood, so I’m guessing there are 500 new and 500 replacement secondary suites built each year in Vancouver. But that’s only 1.5% of the 68,000 existing homes the Mayor says Vancouver has—meanwhile there are a total of 30,000+ secondary suites, meaning almost half of Vancouver’s so-called single family homes already have a suite in them. Given that the recently-approved Streamlining Rental initiative only anticipates adding 470 new rental homes per year, supporting laneway and secondary suite construction with lower fees, insurance and upgrade costs and more time efficient permitting could easily create way more rental homes AND distribute the costs to many more small contractors and the income to thousands of individual homeowners.”
“So why aren’t we doing that?” He asked the obvious question.
“The short answer,” I concluded for now, “is that cities and the province have promoted huge developments with marginal benefits to renters and homeowners because it’s easier for government to manage a few big projects over many small and they think they get more revenue for less effort. The results are also seen as more politically visible vote getters—’See, look what I did for you!’
I concluded for now. “We’ve covered a lot of ground—let’s call it a day so I can gather my thoughts. I started out saying there were just four steps to creating affordable rental housing—time to sum up!”
Brian Palmquist is a fully vaccinated Vancouver-based architect, building envelope and building code consultant and LEED Accredited Professional (the first green building system). He is semi-retired for the moment, still teaching and writing, so not beholden to any client or city hall. These conversations mix real discussion with research and observations based on a 40+ year career including the planning, design and construction of almost every type and scale of project. He is the author of the Amazon best seller “An Architect’s Guide to Construction.” He is also a member of team for a livable Vancouver, a new political party dedicated to restoring a livable Vancouver starting with the 2022 civic election.
So, suppose you actually get this built. Does Vancouver have ways to prevent 8t being used for Air BnB?
Brian, I have had the exact experience you are talking about. Right now I am still trying to get a ground level suite licensed (for over a year) but have been stonewalled by ridiculous requirements. It has been cheaper to just leave it empty. And you are right, the majority of single family housing is multi family, suites, or group living. The house 2 doors down for example has 10 Irish young people on work permits, yet it is called 'single family'. Planners should consider the number of people housed rather than the number of little boxes built. And yes, it makes for a much more livable neighbourhood, where people know each other and create community. The City should be promoting infill, secondary suites, duplexing etc instead of towers and 4-6 storey apartments in RS and RT neighbourhoods. There is lots of space for tower density. What about the old Oakridge transit site. Lots of acres there but nothing gets done.