Geraldine Santiago
Other
I’ve seen it, heard it, read it everywhere: “Capacity is needed.” The demand for mid-rise housing continues to increase throughout Metro Vancouver as more residents want affordable choices for family living. Developers and builders are seeking options.
BCStats projects that by 2035, 768,600 more people will be living in the Lower Mainland, with 145,735 more within Vancouver’s city limits alone. That’s a growth rate of 1.3 per cent per year.
How does our area meet this demand? Densification.
As a long-term real estate agent in Metro Vancouver, I’ve seen this trend gaining momentum. It used to be that just your location within Metro Vancouver dictated your property’s value. Now it’s a combination of the associated lot size, zoning and future development potential.
The region is creating transit-oriented communities. It can be expected that single family homes within .5 KM of a rapid transit hub may be rezoned to allow greater density to make way for townhouses, row homes, or even mixed-use towers.
In my experience, if you buy a property and don’t consider how zoning and subdividing the lot over time could affect its future value, you might be missing out on a tremendous investment opportunity. And if you are looking to sell, seize the opportunity to learn about zoning and subdividing in order to optimize your property’s value.
Zoning and Real Estate Sellers
Do you know your property’s zoning options?
The reality is that Vancouver needs more housing options, and the only direction to go is up. Consider how high a developer can build on a lot to accommodate mid-rise, duplex, triplex and row housing relative to the zoning bylaws within a particular area in Metro Vancouver.
Zoning not only refers to the division of land into two parcels, it can include consolidation of two or more parcels into a single site, the adjustment of an existing property line or dedication of land for road or lane purposes.
The City of Vancouver is divided into zoning districts with their own particular zoning bylaws. For details on each district, you need to check the Zoning and Development Bylaw and any official development plan bylaws that may apply to that area.
Land use is divided into “Outright” or “Conditional.” Outright land uses are those permitted providing that all the regulations are met. Conditional refers to land uses that have impact on the community and must meet numerous government-specified criteria before being approved.
The key to properly valuing your lot is clearly understanding its full potential and best use. This includes factors such as your property’s Floor Space Ratio (FSR).
FSR is calculated by taking the floor area of a building on a lot and dividing it by the area of the lot. Depending on your zoning, FSR maximums can vary from .65 to 1.45. For example a property in Kitsilano, zoned RT-8, with a 33 x 127 square-foot lot has a total of 4,100 square feet. The outright FSR is .5 with a conditional increase to 0.75. Therefore, depending on the FSR, this lot could have a structure from 2,095-3,143 square feet built on the property.
Other important questions to consider before listing your property for sale include: Do you know your property’s permitted use? Do you know which properties in your neighbourhood have applied to rezone their property?
Due to the complexity of zoning bylaws, partnering with your listing agent to maximize your property’s value has become more important than ever. If you don’t take advantage of your area’s zoning laws and its future development potential, and promote them relative to your lot, you could easily undervalue your property.
Zoning and Buyers
Future value should also be a part of how a property is assessed when purchasing.
If you are a first-time home buyer, you can invest in a property to sell it in a short period of time with a high rate of return if there is infrastructure being built around it. Think of your property’s appreciation and anticipation. Anticipation is created by the expectation of benefits to be derived in the future. Home buyers may anticipate that a property in a certain neighbourhood will be in demand in the next five years, and may be motivated to purchase the property for future development.”
This trend could translate into increased real estate values for properties located around transit hubs and lesser values of properties that are located farther away, due to the increase in supply over time.
Whether you’re buying or selling, look for the market potential of the property five years from now. Consider where new transit lines, roads and amenities are being built, and how this will influence the property’s future value.
You can find out more about your city’s zoning plans at these links:
- Vancouver
- District of West Vancouver
- City of North Vancouver
- City of Richmond
- Port Coquitlam
- City of Burnaby
- City of Surrey
© 2014 Real Estate Weekly