With Vancouver allowing the construction of eight units on a single detached housing plot, Burnaby has also taken a historic step forward in expanding housing types and increasing residential density. The city has approved accessory suites in laneway homes and duplexes.
The duplex mentioned in this article specifically refers to side-by-side duplexes, also known as semi-detached homes, or simply semis. Unlike duplexes in Vancouver, where units are stacked vertically or horizontally, semis in Burnaby are typically side-by-side.
What’s the difference between a Semi-detached home and a Duplex? Both types include two residences. According to Burnaby’s zoning regulations, in a Semi, the residences are arranged side-by-side or front-to-back, while in a duplex, they are stacked on top of each other.
Side-by-side duplexes are a distinctive feature of Burnaby, while this type of duplex is relatively rare in the Vancouver area.
The new bylaw regarding laneway homes and duplexes with accessory suites came into effect on September 18, 2023.
Burnaby Mayor Mike Hurley said, “This is an important step for Burnaby in increasing housing supply while preserving the character of local communities.”
Under the new regulations, each whole duplex building can now include two accessory suites, one on each side, located in the basement or on the ground floor, each with its own separate entrance. For the sake of simplicity, this article refers to these commonly seen side-by-side semis in Burnaby as duplexes. For more information on this type of housing, you can also refer to Gary’s previous videos.
But what many people may not know, and what this video aims to inform you, is that the minimum lot size requirements for building duplexes in R4 and R5 zones have been significantly reduced. As long as the lot width is equal to or greater than 49.2 feet (15 meters), the lot size is equal to or greater than 6,000 square feet, and there is a lane or second road adjacent to the lot, duplexes with accessory suites can be legally constructed.
In other words, starting from September 18, 2023, in Burnaby, it is highly likely that side-by-side duplexes can be legally constructed on R4 or R5 lots with widths of 49.2 feet (15 meters) and lot sizes of 6,000 square feet.
In the past, land suitable for building duplexes was rare and demanded prices about 20% higher than detached homes. Now, the threshold for building duplexes has been lowered, and the number of lots suitable for building duplexes has increased significantly. Moreover, duplexes can be built with three full above-ground levels or two levels with a half-basement, and the rental units do not count towards the allowable floor area. This table shows the conditions you need to meet to build a duplex with two accessory suites. In addition to R4 and R5 zoned lots, duplexes with rental units are also allowed on R6, RM6, and R12 zoned lots.
Once built, the two units of a duplex can be separately owned and sold, or one can be kept for personal use.
Can the rental suites be left vacant or occupied by adult children or parents? Absolutely.
So, how much floor area can be built? The new bylaw states:
A semi-detached home with two and a half stories shall not: (a) have a total floor area greater than 2,000 square feet for the principal dwelling unit; (b) have a total floor area greater than 30% of the lot area plus 1,500 square feet for the combined floor area of the two principal dwelling units; or (c) have the floor area of the upper floor of the principal dwelling unit be less than one-third of its total floor area.
In other words, the maximum allowable floor area is 2,000 square feet, plus the basement or ground floor rental units, which do not count towards the above area. For example, on a 6,200 square foot lot, the total allowable floor area would be approximately 3,360 square feet (approximately 1,680 square feet per side), plus the area of the attached rental suites. Theoretically, this lot could accommodate a total floor area of about 5,400 square feet (approximately 2,700 square feet per side).
If the conservative estimated sale price is around $2.1 million per unit, with an average price per square foot of only about $780, significantly lower than the current price per square foot of condos and townhouses in Burnaby. Currently, duplexes in North Burnaby and South Burnaby without basements, complying with the “old bylaw,” with floor areas of approximately 2,000 square feet per side, are already selling for $2.1 million or more.
Building duplexes not only helps the government provide more housing to address Canada’s housing crisis but is also a win-win for governments, investors, and homeowners. For those who already own such properties, you’re winning. Buyers who don’t yet have these properties can also act now.
We provide a benefit for you on our website BurnabyHouse.com, listing all the potential lots currently on the market suitable for building duplexes, updated in real-time according to the listed properties. Because the data comes from the MLS, provided by various real estate agents, errors and omissions are inevitable. For more detailed information, you can also set up free personalized VIP email notifications to have new listings sent directly to your inbox. Feel free to contact us, and let our experienced design and construction team at CitiDesign also provide you with one-stop purchasing, design, construction, and marketing services.
Under the current regulations, once a side-by-side duplex is built on a lot, laneway homes cannot be built.
Developing in Burnaby has unique advantages compared to Vancouver.
Vancouver: Long approval times; High city fees; Long construction periods; Separate building regulations, complex review procedures, and strict restrictions on tree felling.
Burnaby: Short approval times; Low city fees; Short construction periods; Suitable for fast-paced projects.
Here is a rough demonstration of cost calculations and the budget for buyers purchasing such newly built homes for your reference:
Floor area: 5,400 square feet Land cost: $1.95 million + taxes = $1.99 million Construction cost (including taxes, etc.): $1.2 million Management fee: $120,000 Brokerage commission: $100,000 Total sale price: $4.2 million Total profit: $790,000 Purchase cost per unit for new homes: $2.1 million + $105,000 GST + $41,000 PTT = $2.246 million Down payment of 35%: $800,000 (can come from parental assistance or proceeds from selling a home) Mortgage loan: $1.45 million Mortgage loan interest at 5%: Monthly payment: $7,270 CAD Monthly rent $3,600 CAD (basement and main floor rental units) Actual monthly payment: $3,670 CAD If you consider the cost of mortgage interest in the home purchase decision and base it on an 18-month calculation, we can calculate it as follows: Below are the costs and data related to real estate investment:
- Land acquisition cost:
Land acquisition cost: $1.95 million + taxes = $1.99 million Down payment: $1.99 million * 35% = $696,500 Mortgage loan: $1.99 million * 65% = $1.2935 million Interest rate: 6% Amortization period: 35 years
- Construction cost (including taxes, etc.):
Construction cost: $1.2 million Construction period: 12 months Monthly bank payments: $100,000 Interest rate: 10% Amortization period: 35 years
- Management fee:
Management fee: $120,000 Construction period: 12 months Monthly payment: $10,000 Similarly paid from bank loans
- Brokerage commission and legal fees:
Brokerage commission and legal fees: $100,000 Paid after the house is sold
- Mortgage interest cost (calculated for 18 months):
Mortgage interest cost: $1.2935 million * 6% * 1.5 years = $116,640 6. Total selling price:
Total selling price: $4.2 million These data provide basic costs and loan information for real estate investment, helping assess the profit potential and risks of projects. Please note that these numbers are for reference only, and actual costs may vary due to regional differences, market conditions, and other factors. Investors should carefully consider all relevant factors and consult with professionals to make informed investment decisions.
Now, let’s calculate the total investment and total profit, including interest rate costs:
Total investment = Down payment + Construction cost + Management fee + Mortgage interest cost Total investment = $696,500 + $1.2 million + $120,000 + $116,640 = $2,133,140
Total profit = Total selling price – Brokerage commission and legal fees – Total investment Total profit = $4.2 million – $100,000 – $2,133,140 = $1,966,860
Return on investment = (Total profit / Total investment) * 100 Return on investment = ($1,966,860 / $2,133,140) * 100 ≈ 92.31%
If you consider the cost of mortgage interest in the home purchase decision and base it on an 18-month calculation, the return on investment is approximately 92.31%. This is a relatively high return rate, but please remember that this is still an estimate, and actual results may vary due to market fluctuations and other factors.
If you don’t use a loan and instead purchase the house entirely with your own funds, the total investment and total profit calculations are as follows:
Total investment = Own funds payment + Construction cost + Management fee Total investment = $1.99 million + $1.2 million + $120,000 = $3.31 million
Total profit = Total selling price – Brokerage commission and legal fees – Total investment Total profit = $4.2 million – $100,000 – $3.31 million = $790,000
Return on investment = (Total profit / Total investment) * 100 Return on investment = ($790,000 / $3.31 million) * 100 ≈ 23.87%
If you don’t use a loan and instead purchase the house entirely with your own funds, the return on investment is approximately 23.87%. This return rate is relatively lower, but please remember that this is only an estimate, and actual results may vary due to market fluctuations and other factors.
If the future mortgage interest rate drops to 3%, the total monthly payment is $5,565 CAD, minus the rent, the actual monthly payment only needs $1,965 CAD.
Home purchase decisions should consider all relevant factors, including mortgage interest rates, monthly payments, property fees, maintenance costs, etc.
Although high interest rates and inflation can lead to an increase in monthly payments, we must recognize that housing rents are also rising, so compared to renting, buying still has advantages.
From the above table, we can see that the profit margin for investing in new construction is still considerable.
Regarding interior space design: Duplexes include two units, each with a floor area of approximately 2,700 square feet, with separate ownership and the ability to be sold separately. The owner’s space includes not only a living room, dining room, kitchen, and family room but also 3-4 bedrooms and a spacious balcony, with a floor area of approximately 1,700 square feet. The rental unit is approximately 800 square feet, with its own separate entrance and room for 2-3 bedrooms. Of course, the allowable floor area may vary depending on the size of the lot. Elevators can be added indoors for the convenience of the elderly.
Gary believes that these lots will appreciate in the near future due to changes in regional planning and will become hot commodities. Investors, if your funds allow, take action now before most investors wake up.
The government is mobilizing social forces and funds to expand housing supply. Investing in real estate construction can not only contribute to solving the housing crisis but also bring you personal benefits. Why not do it?
While building detached houses is also a good option, new detached houses are at least $1 million more expensive than new duplexes, with higher purchase thresholds, and detached houses and duplexes target different groups of homebuyers.
If you already have a lot that meets the above requirements, don’t miss out. You can contact Gary for consultation and start the design and approval process to maximize the value of your real estate and improve your life.
Gary Gao, licensed Realtor® with Grand Central Realty, a licensed real estate brokerage in BC. Gary is also the principal of CitiDesign Build Inc., which is not affiliated with Grand Central Realty. CitiDesign and Gary are licensed builders in BC. Contact Gary.