Where are all the 4-bedroom condos?
In a previous article, we showed how the Metro Vancouver Housing Supply Crisis will worsen, and municipalities needs to take action to build 52,000 additional homes immediately to meet the needs of 2021. But there’s little point in building towers full of suites and 1-bedroom apartments because our communities are not “singles only”. We also need to build homes that comfortably house couples and families within a reasonable distance from their work. In this article, we show the impact of the supply shortage, shine a light on how current development doesn’t reflect the mix of households in our neighbourhoods, and give our suggestion for how to proceed. As always, we’d love to hear your feedback on our findings and suggestions!
The Chronic Housing Supply Shortage
The chart above is based on Mortgage Sandbox research conducted to compare new housing to how much housing supply should have been built to keep up with our population growth over the past 15 years. We used Metro Vancouver data to forecast whether an end is in sight for our housing supply shortage. Based on our research, the chart makes it is easy to see that:
We already have had a supply shortage for some years.
With accelerating population growth, the shortage will significantly worsen over the coming years
Vacancy rates are currently sitting at around 0.9%, so if we do nothing then there could be more than 52,000 too few homes by 2021. In Metro Vancouver, there are an average of 2.5 people to a home, so that’s 150,000 people that won’t have a suitable place to live!
Even if you believe this estimate is too high, would you risk 75,000 or 25,000 underhoused people? If by accident we overbuilt that excess supply could be absorbed within a year at price discounts.
It’s embarrassing that municipalities can make hard decisions to spend money on transit and park improvements but don’t have the courage to make the tough decision required to build enough basic housing for everyone. Sometimes councils agonize for months over the exact design of a specific building. They don’t recognize that a crisis requires fast action.
In the past, the underhoused have found alternative “temporary” arrangements like illegal rentals suites, RV’s parked by Home Depot, or living with parents. However, these substitutes create second class citizens (not income based but based on the time that they reached adulthood) and not a viable long terms solution to house 150,000 people. The only solution is to build more and build the right kind of homes for the mix of households in our communities.
Who lives in Metro Vancouver?
The majority (60%) of households in Vancouver are singles and couples. You could argue that some couples would have kids if adequate housing were available but let’s park that thought. 40% of households have more than two people living in one home and their needs have been largely ignored. We need to build homes that match the needs of our citizens and workers. Unfortunately, all the construction sites we see around the metro are focused on 1 and 2-bedroom apartments or insanely unaffordable single detached homes. Adding insult to injury, all the new houses being built are simply replacing an older unaffordable house with a larger even more expensive one.
Many households need space for 3, 4, 5 and more residents and Lower Mainland cities should be zoned to match the needs of it’s citizens and current residents.
Are we building the right homes for our people?
City of Vancouver Development Pipeline, May 2018
The short answer is… NO! We’ve analysed residential rezoning applications to the City of Vancouver to assess whether the proposed future apartment developments in the city reflect the needs of the residents. Studio, 1BR, and 2BR make up a whopping 85% of the building pipeline, and 4BR or more a dismal 0.4%. It’s shocking that 24% of Metro Vancouver households are 4 or more people, yet only has 0.4% of the City’s new construction would suit their needs.
How big is the housing imbalance?
Below you can see what we’re calling the imbalance. This chart shows the difference between the housing people need and the new housing proposed. From this, it’s clear that we need to redirect attention from 1 and 2-bedroom homes and build homes suitable for households of 4 or more.
What should we be building?
In the chart above, we assume that single people can comfortably live in a suite or 1-bedroom apartment, that couples should live in a 2-bedroom apartment, 3 people get 3 bedrooms, and households with 4 or more residents can figure out a comfortable living arrangement with 4 bedrooms. The orange bars represent the mix of housing currently proposed for each household size, and the green represents what we believe to be a more appropriate mix of apartments based on the mix of households living in Metro Vancouver today. That means we build half as many 1-bedroom apartments and begin building 4 bedroom apartment. In fact, a quarter of the apartments we build should be 4 bedrooms.
In our opinion, Metro Vancouver has hit the limits for creating suburban sprawl because we are bound by the ocean, mountains, and international border. The Lower Mainland has no choice but to add density to meet the demands of a modern global city. This density should not be added solely in the form of 1 to 2 bedroom apartment towers but in mid-rise and high-rise towers providing a mix of units better aligned to the people who live here.
How can this be achieved?
In our view, there is a short-term strategy that can implemented to limit the shortage in 2021 and a long-term strategy to ensure meeting the needs of our growing population and affordable prices for decades to come.
Short-Term Solution: Lot-splits
It would be impossible to design, approve, and build apartment towers that are suited to various neighbourhoods in 2 years, though we can start on designing and approving them – more to come on that later. So, what can be done? A faster way to create more housing is to rezone homes with minimum dimensions of 50ft x 100ft to allow them to be split into four lots of approximately 25ft x 50ft. Though these homes would be smaller but still ample, and everyone would have a cozy back-garden. Logistically, cities would have to turn alleys into named streets (as was done in the Vancouver West End) and the end result would be beautiful homes for more families. Below you’ll see some examples of existing Vancouver 25ft lots that have fantastic little homes on them. A huge benefit of this approach is that a homeowner has full control over their home and land, they don’t have to deal with a strata or a co-owner as would be the case in a duplex. This is many people’s dream of a house with a garden, and in a modern city this could be within reach for many with no need to lose privacy to tenants.
Homes with 25ft frontage are beautiful too
Here is what they look like from above
Long-Term Solution: Family Districts
Over the next 10 years, it is critical to Vancouver’s success as a major world city to increase the number of mid-rise and high-rise residential apartment buildings. As we’ve mentioned already, at present buildings of this type are tailored towards studio, 1-bedroom, and 2-bedroom buildings. What we would like to see is these tall towers being forced to include a more reasonable number of 4-bedroom apartments. Not only that, but we think these buildings should be placed near transit stations, schools that are at risk of closing, and park land. In so doing, parents will be able to easily access work, at-risk schools will stay open, and children will have plenty of green space to run around in.
Perhaps we’re being too idealistic, however, throughout the city there are plenty of locations like the one above, that we could turn into wonderful family districts. All the while maintaining Vancouverism architectural style with mixed building heights and working towards alleviating the supply shortage. From our point of view, it’s the kind of two birds with one stone solution that ought to be considered. If you could get an affordable 4-bedroom apartment would you raise a family in an area like this one?
Conclusion
It’s embarrassing and frustrating that, 10 years into a housing crisis, the situation for ordinary Metro Vancouver citizens is worse rather than improved. The Housing Supply Crisis is forecast to reach a 52,000 home shortfall (enough to house over 150,000 people) by 2021 and municipalities need to take action immediately.
Part of the problem in the past has been that the new homes being built are the wrong mix of homes. 24% of Metro Vancouver households have 4 or more people (10% have 5 or more residents) yet municipalities continue to believe that building apartments with 1 or 2 bedrooms is adequate for these larger households. Municipalities need to plan housing for everyone and that means 24% of new condos built should have 4 bedrooms.
Of course, we also advocate for measures to moderate demand, but with so many people projected to be underhoused by 2021 we need to tackle the supply problem.
It would be irresponsible to point out a problem without proposing a solution. Two solutions that could help fix the imbalance are:
Allow division of large lots to build 4 homes in the place of one.
Move quickly to pre-zone for multi-generation family districts that include 4BR condos near parks and schools with low enrollment.
We know there are more possible solutions to quickly bring supply to the underhoused. We suggest trying as many of them as possible rather than waste time trying to figure out the “silver bullet” to solve supply. Perhaps, in 2008 we could have spent time debating the best option, but over 10 years into crisis we have lost the luxury of eloquent solutions. We’re looking at a patch up job now.
