Vancouver’s new regulations: Single-family homes can be converted into 8 units! Will homeowners get rich?

Big news! Just two days ago, the Vancouver City Council unanimously passed a major amendment to the city’s zoning and development regulations, allowing the construction of multi-unit residences in communities where only single-family homes were previously permitted.

On a single-family home lot, up to 8 units can now be constructed!

Currently, most residential land in Vancouver is occupied by single-family homes, with high-rise apartment buildings in the downtown area and some regions. Relatively fewer are medium-density residences of three stories. Such medium-density housing is in high demand in many North American cities but is rare in Vancouver, known as the “Missing Middle.”

Gary’s video, released three months ago, already discussed the controversial “big move” by the Vancouver City Government: turning single-family homes into “8 units”. Now, the shoe has dropped, with the amendment officially passed at the Vancouver City Council meeting two days ago. The amendment aims to encourage the construction of multi-unit residences on residential land, increase the density of single-family home communities, and simplify residential zoning.

The amendment to the Vancouver City Council’s “Zoning and Development Bylaw” (No. 3575) allows for up to 6 units on single-family home lots — 8 units if intended for rental.

This is the most significant change to single-family home communities since Vancouver first introduced the concept of laneway houses in 2009, aligning with the city’s planning direction of “gentle densification.”

This means that traditional single-family home communities will gradually transition into multi-residential communities, significantly increasing housing density.

Specific provisions are interpreted as follows:

Most single-family home lots can be redeveloped into 3-6 units:

For standard lots, i.e., 33 feet wide, the maximum building area for new constructions will increase from the current approximately 3400 square feet to about 4000 square feet, allowing for up to 4 units per lot.

For large lots, i.e., 50 feet wide, the maximum building area will increase from 5200 square feet to about 6100 square feet, allowing for up to 6 units.

For rental units, a maximum of 8 units is allowed on a single-family home lot. One unit can be used by the owner.

The maximum building height is limited to 3 stories (37.7 feet).

Most of the approximately 65,000 single-family home lots in the city will be affected by this new policy, with the Vancouver City Hall estimating approximately 200 applications for multi-unit residential construction annually after the amendment takes effect.

According to estimates by Vancouver city government officials, the cost of new multi-unit housing will be 50% of the cost of new single-family homes and about 75% of the cost of new apartments.

“These multi-unit residences will allow for more homes to be built on each single-family home lot, thus allowing the land cost to be shared among multiple owners. Although the new prices are still beyond the affordability of many families, they are at least lower than the current house prices in these communities.”

Overall, after increasing residential density, housing prices are bound to be more affordable than single-family detached homes.

Vancouver City Hall has set the maximum floor area ratio at 1.0, which is a density measure comparing the interior floor area of a building to the land area.

This means that under this policy, the total floor area of multi-unit residences on a lot equals the lot area. For example, on a standard Vancouver lot measuring 33 feet by 122 feet, with a lot area of 4026 square feet, according to the new rules, the total floor area would be 4026 square feet.

However, if choosing to build single-family homes, the new rules tighten restrictions on the maximum floor area for a single main home on a lot. The current old regulations allow for a maximum floor area ratio of 0.7 for new Vancouver homes. The new rules reduce the floor area ratio for single-family homes to 0.6. In other words, for a standard Vancouver single-family home lot, the maximum building area will decrease from the current 2800 square feet to 2400 square feet, a reduction of 14%. 400 square feet is equivalent to 37 square meters, which is about the size of two bedrooms or half a basement suite.

At the same time, the primary residential density on single-family home land has almost shifted to laneway houses. The floor area ratio for laneway houses will increase from the existing 0.16 to 0.25, allowing for a 56% increase in residential area for laneway houses. For example, on a lot with an area of 4000 square feet, laneway houses were previously only allowed to build 640 square feet, but under the new rules, laneway houses on a 4000 square foot lot can reach 1000 square feet of building area. The building height for laneway houses has also been raised from 1.5 stories to 2 stories, providing a better living experience.

The intention of the new rules is very clear: as a single-family homeowner, you can choose not to build multi-unit residences on your land, but if you plan to demolish an old house and rebuild, the new house can only be smaller than the old one, while laneway houses can increase in size.

Instead of insisting on building a smaller main house, it is better to consider adding a larger secondary house. The city government encourages homeowners to build multi-unit residences on their own land! The purpose of this policy is: to moderately sacrifice one’s living space to create more space for others to use, in response to Vancouver’s housing crisis.

Larger rental units can bring higher returns to homeowners, which is beneficial to both individuals and society in a high-interest rate loan environment.

However, this proposal also faces considerable opposition. Firstly, it presents challenges for families living together across multiple generations. According to some Vancouver architects, many families in Vancouver maintain a lifestyle of living together across multiple generations or with other people. This lifestyle requires larger homes.

The new rules do not apply to Shaughnessy, as the community was designated a heritage conservation area in 2015.

In addition to densification changes, the new rules will also consolidate 9 different zones (RS-1, RS-2, RS-10, etc.) into 1, to completely reform and simplify Vancouver’s single-family home zoning.

This significant change will have a huge impact on traditional single-family home communities. At the same time, it will make the previously luxurious single-family homes even scarcer.

If all eligible 65,000 single-family home lots are redeveloped, it will add 300,000 housing units, almost enough to accommodate another Vancouver-sized population.

Many people believe that this is a rare opportunity for all single-family homeowners in Vancouver to get rich. Especially for those who own old houses and plan to renovate and rebuild, your spring is coming! Converting a single-family home into eight apartment units, whether for sale or rent, is expected to yield significant returns.

Calculating based on the current rent of $2700 Canadian dollars per month for a one-bedroom apartment, even if only converting a single-family home into six one-bedroom apartment units, the total monthly rent will reach $16,200 Canadian dollars, far exceeding the rent for an entire single-family home in Vancouver.

Mayor Ken Sim said the policy will allow seniors to downsize their homes and enable young people to stay in the community.

Councilor Sarah Kirby-Yung said in Thursday’s discussion, “This is about building vibrant future family communities. Because the reality is that most people simply cannot afford traditional single-family homes.”

To mitigate possible land speculation caused by developing multi-unit residences, the new rules include “density bonus provisions,” requiring developers to either pay fees to contribute to public facilities and infrastructure, offer a unit of self-occupied housing below market price at a 50% discount, or permanently dedicate all units to rentals.

City officials did not propose higher density mainly because they were concerned about overwhelming the infrastructure of these low-density communities, especially the sewage systems, which would require significant reinvestment. Additionally, Gary is concerned that because Vancouver no longer allows gas heating, only electricity, there will be urgent requirements and pressure for upgrades to the power system. The living environment in Vancouver’s single-family home areas will gradually deteriorate, with a lack of underground and surface parking, nowhere to park cars, and roads becoming increasingly congested. Additionally, if rental properties encounter non-payment of rent and damage to the house, disturbing the neighborhood, the “rental bullies” who cannot be evicted, what should landlords do? However, overall, Gary believes that this change is a positive move that will revitalize Vancouver and help address housing shortages, with positive impacts.