The Rise of Multiplex Housing in Vancouver:
What Homeowners and Investors Need to Know

In recent years, Vancouver has faced escalating housing demands and affordability challenges, prompting the city to rethink residential zoning policies. One significant change is the introduction and encouragement of multiplex housing. With a focus on "gentle density," multiplex homes aim to provide more housing options within established neighbourhoods, while also addressing affordability and sustainability.

Here's an overview of what multiplex housing means for homeowners, investors, and prospective buyers in Vancouver.

What is Multiplex Housing?

Multiplex housing refers to small, multi-unit residential buildings — typically two to six units — constructed on a single lot. These homes are designed to fit seamlessly within neighbourhoods historically zoned for single-family homes, but they offer more housing options without fundamentally changing the character of the area.

In Vancouver, a multiplex could take different forms:

• Duplexes or triplexes: Homes divided into two or three units within one building.
• Fourplexes and Sixplexes: Larger structures divided into four or six units.
• Laneway or coach houses: Smaller homes built on the same lot as the main structure, often in place of a garage or in a backyard space.

These structures allow homeowners to create more housing without the height and density of a traditional apartment building.

Why is Vancouver Supporting Multiplex Developments?

The City of Vancouver’s multiplex initiative addresses multiple pressing challenges:

1. Housing Supply and Affordability: By allowing more homes on single-family lots, the city aims to increase housing supply, which can stabilize or reduce prices in the long term.
2. Gentle Density: Unlike large condo towers, multiplexes provide a more subtle density that fits into existing neighbourhoods, retaining the community feel that Vancouver residents value.
3. Sustainable Living: Multiplexes are an environmentally friendly choice, encouraging more compact and energy-efficient housing near existing amenities and transit.
4. Diverse Housing Choices: Multiplexes can cater to a wide range of residents, including young families, down-sizers, and renters, creating a more diverse and inclusive neighbourhood.

Zoning Updates and New Opportunities

In response to these goals, Vancouver City Council has recently introduced zoning changes under the Making Home Initiative. Some of these changes involve replacing traditional single-family zoning in various neighbourhoods with "multiplex zones," allowing for multi-unit dwellings on lots that would have previously permitted only one home.

Key Points of the Multiplex Zoning Update

• Expanded Areas: New zoning laws apply to many low-density neighbourhoods, including RS and RT zones, allowing for duplexes, triplexes, and fourplexes in areas once designated exclusively for single-family homes.
• Size and Density Regulations: The new zoning allows for higher floor space ratios (FSR) on multiplex lots. This means that the size of a multiplex on a standard lot is regulated to fit the character of the neighbourhood while still maximizing living space.
• Streamlined Approvals: Vancouver is also working on streamlining the permitting process for multiplexes, which means faster approval times for builders and homeowners.

For investors and developers, these zoning changes create an exciting opportunity to acquire lots in areas previously limited to single-family homes and convert them into higher-density, income-generating properties.

Advantages of Multiplex Housing for Homeowners

For existing homeowners, multiplexes offer numerous benefits:

• Rental Income: Multiplex units can provide a steady rental income, making homeownership more affordable for owners.
• Intergenerational Living: Families can live close to one another, with grandparents or adult children occupying separate units while remaining on the same property.
• Increased Property Value: Multiplex-capable lots may have higher market values due to the potential for income generation and higher-density use.

The Future of Multiplex Housing in Vancouver

The push for multiplex housing in Vancouver is a response to the city’s evolving housing landscape. As more residents seek affordable and flexible housing options, multiplex developments offer a way for neighbourhoods to grow in a way that feels compatible with their existing character.

For prospective buyers and investors, understanding these zoning changes and the city’s support for multiplexes can provide a strategic advantage. Multiplex housing offers a way to create additional income, meet housing needs, and support a sustainable future in Vancouver’s real estate market.

Opportunities for property owners in Vancouver

New Zoning Changes in Vancouver can increase property value for homeowners in various areas of Metro Vancouver. Recent legislative changes in British Columbia, specifically the enactment of Bill 44, have opened up significant opportunities for homeowners. The City of Vancouver has revised its zoning bylaws in areas previously designated for single-family homes (RS-1 and similar). These changes now permit the development of duplexes, triplexes, and higher-density multiplexes, depending on the size and location of the lot. As a result, developers are actively seeking properties in these re-zoned areas and, in many cases, are willing to pay above market value.

Key Points of Bill 44 and Related Multiplex Legislation:

• Increased Density: New zoning allows for higher density on single-family lots, making your property more attractive for development.
• Higher Floor Space Ratio (FSR): The allowable FSR has been increased, meaning developers can build larger, multi-unit structures on your lot.
• Pre-Zoning for Multiplex: Many areas have been pre-approved for multiplex developments, streamlining the approval process and making redevelopment faster and easier.
• Prime Location: Properties near transit-oriented areas (TOAs) and key growth corridors are especially sought after, further increasing their appeal.
• Environmental and Sustainability Goals: The City of Vancouver’s focus on densifying urban neighbourhoods also aligns with its sustainability initiatives, reducing urban sprawl and encouraging walkable, transit-oriented communities. This makes the policy change a win for both housing supply and environmental goals.

If you are a homeowner and have considered downsizing or relocating, now is an ideal time to explore your options. Whether you're thinking about selling or simply want to know how these changes could impact your property's value, contact me today for more information.

What First-Time Home Buyers Need to Know When Entering the Market

Entering the real estate market for the first time can be both exciting and overwhelming. Here are a few essential tips to help you navigate the process:

1. Get Pre-Approved for a Mortgage: Understanding your budget is crucial. A mortgage pre-approval will give you a clear picture of how much you can afford, helping you focus on homes within your price range and making you a more attractive buyer to sellers.

2. Understand Your Needs vs. Wants: Make a list of must-haves versus nice-to-haves. This will help narrow down your search and keep you focused on finding a home that truly meets your priorities, whether it's location, size, or specific amenities.

3. Research the Market: Familiarize yourself with current market trends, including average home prices, neighbourhood characteristics, and how long properties are staying on the market. This knowledge will empower you to make informed decisions and recognize a good deal when you see one.

4. Prepare for Additional Costs: Beyond the down payment, be ready for other expenses like closing costs, property taxes, home inspections, and potential repairs or upgrades. Budgeting for these extras will help you avoid surprises down the road.

5. Work with a Knowledgeable Realtor: A skilled and experienced realtor can guide you through the buying process, negotiate on your behalf, and provide valuable insights into the market. Choose someone who understands your goals and has experience in the area you’re interested in!

Sophisticated Lighting

Key Changes Effective July 18, 2024

1. Mandatory Use of Landlord Use of New Web Portal:
   • Landlords must use this portal to generate Notices to End Tenancy for personal or caretaker use.
   • Landlords using the website portal will be required to have a Basic BCeID to access the site.
   • The portal will require landlords to provide details about the persons moving into the home. The details of the new occupant of the home will be shared with the tenant.
   • While using the website portal, landlords will be given information about the required conditions for ending a tenancy and the penalties associated with ending the tenancy in bad faith.
   • They will also be informed about the amount of compensation they will be required to issue to tenants when ending a tenancy.
2. Extended Notice Period:
   • The Two-Month Notice is changing to a Four-Month Notice on July 18, 2024.
   • Tenants will have 30 days to dispute Notices to End Tenancy, extended from 15 days.
3. Occupancy Requirements:
   • The individual moving into the property must occupy it for at least 12 months.
   • Landlords found to be ending a tenancy in bad faith could be ordered to pay the displaced tenant 12 months’ rent.

It is strongly advised to seek legal advice to navigate these new regulations effectively. Legal advice can help ensure compliance with the transition to the new rules and protect the interests of all parties involved by informing them of their rights and obligations arising under the new rules.

Additional Resources:

• For more details on the new regulations and to access the Landlord Use Web Portal, visit BC Government Residential Tenancies or contact the Residential Tenancy Branch at 1-800-665-8779.

Bank of Canada cuts rate by 0.50% again

They just announced a 2nd straight 0.50% rate cut making it five cuts in a row! The first-three cuts were by 0.25% each. Their benchmark interest rate now sits at 3.25%.

This is great news for buyers and mortgage brokers have already been seeing a big uptick in pre-approvals and accepted offers as many had anticipated this.

We have now seen a 1.75% drop in the benchmark rate since June - that totals to about $100/mo for every $100,000 borrowed. This 5th straight decrease comes after 6 consecutive stays in rate announcements since July 2023. From March 2022 to the last increase in July 2023, policy rates had risen by 4.75% in total.

Here are some things you need to know:

1. This is another big relief for those who currently have variable rate mortgages. The announcement directly impacts variable rates and lines of credit – they will go down by 0.50%.
 
2. Fixed rates will NOT go down by 0.50% today based on this announcement.
 
3. Fixed rates are based on bond yields - Forecasts for future interest rate cuts are priced into the bond market, that helps set the rates for fixed mortgages. Given that today's news was expected, bond yields have not moved much this morning, however have been declining over the past 2 weeks after a brief spike. If bond yields drop further and remain lower, then we may see fixed rates come down more in the coming weeks - they don't move often.

4. In their words today, "With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, Governing Council decided to reduce the policy rate by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range. Governing Council has reduced the policy rate substantially since June. Going forward, we will be evaluating the need for further reductions in the policy rate one decision at a time. Our decisions will be guided by incoming information and our assessment of the implications for the inflation outlook. "

5. While many clients have gone with a 3-year fixed rate this year, the variable rate conversation has been happening a lot more and will likely see more clients opt for it.
 
6. Fixed rates are still lower than variable rates but not by much after today’s drop - the gap is shrinking.
 
7. Not all lenders will auto-decrease the payment. The Big 6 banks ( and some credit unions ) aside from Scotia all have a set payment variable - they will not auto-decrease. The payment will remain the same, but more of it will go to principal and less to interest. On exception, a client could talk to their lender to see if they will allow a payment adjustment.

8. Lenders will shortly make announcements to their updated prime rates. Payment changes ( for lenders that are adjustable ) usually happen within the next couple scheduled payments.
 
9. The next rate announcement will be on January 29th followed by March 12th. There will be a total of eight Bank of Canada announcements in 2025. 
 
You can read the full Bank of Canada release here.