Multiplex policy update from city staff

With proposed FSR limit, economic viability will be difficult

In January 2022, Vancouver city council voted to ask staff to prepare a policy allowing a four-plex on a 33-foot lot or a six-plex on a 50-foot lot - a form of gentle density (“missing middle”), basically a small townhouse complex. Last month, there was a staff update to council on the multiplex policy, basically summarizing what they’re proposing so far.

• Presentation slides

• Video of presentation

Where multiplexes could be built (basically RS zones) across the city, if it’s economically viable: 33-foot lots are shown in yellow, 50-foot lots are shown in turquoise.

What I found most surprising is that the staff proposal is for a total floor space limit (“floor space ratio”) of 1.0: if the building is three floors, the size of each floor can only be 33% of the site. This is not much more than the current FSR limit (0.86).

This means that there won’t be many lots where this kind of project is economically viable. For a landowner to carry out this project, the land price - the value of the final product minus all construction costs, including fees - has to significantly exceed the current value of the existing building. Maybe there’ll be a limited number of lots where the expected value is particularly high.

In a 2022 letter to council, Tom Davidoff suggested an FSR of 1.5 (50% site coverage for a three-storey building). He proposed that the city use a fixed fee, as opposed to one negotiated on a time-consuming site-by-site basis, and adjust it a couple times a year to limit the number of applications to a predetermined target (say 500 applications per year). Thus the city would make the zoning less restrictive, while still limiting the rate of redevelopment by using the fee, and capturing most of the increase in land value. He estimated that this would provide the city with $1.2 million in revenue for each project.

With an FSR of 1.0, there’d be much less revenue to the city.

In a 2020 article, Bryn Davidson was suggesting that an FSR of 1.2 (same as townhouses) would be appropriate.

Davidson said that for Stewart’s concept to work, he’d suggest what he called a “townhouse” building size: 1.2 FSR. On one of Vancouver’s standard 33′ x 122′ lots, that’d allow 4,831 square feet of interior space. For a hypothetical fourplex, that’d allow homes averaging 1,200 square feet—three market-rate and one below-market.

“I’m always trying to target that sweet spot of unit size, somewhere between say 1,200 to 1,500 square feet,” Davidson said. For newly built homes under Vancouver’s current laws, “you can get a house that’s like 3,000 square feet or you can get a 600-square-foot condo. But getting that 1,200 to 1,500 square foot house is hard.”

Vancouver has many older houses of that size, of course. But they’re mostly detached—and far beyond most people’s price range, due to the price of empty land in modern Vancouver. So in a sense, allowing attached homes would be a way to help more Vancouverites live in more or less the same way they grew up.

Of course limiting FSR to 1.0 means that the resulting homes would be smaller.

It sounds like the engineering department is concerned about increased stormwater runoff, putting greater strain on the sewer system. Direct link to video with engineering’s comments. I'm puzzled because I would have expected this concern to translate to a site coverage limit (typically 60% for RS zones) rather than an FSR limit. And for standard 33-foot lots, four units are already allowed, in the form of a duplex with a basement suite on each side. (As Avi Barzelai points out, the advantage of a four-plex is that you have four owner households, instead of two owners who each have a basement tenant to help pay a mortgage that’s twice as large.)

The initial target for the Making Home four-plex/six-plex proposal was for 2,000 lots over four years (500/year), adding 10,000 homes. The FAQ for the Missing Middle proposal suggests that staff is setting much lower targets:

Q. How much change will this create? How many multiplexes will get built?

… Based on the current concept, we don’t expect the option to build a multiplex to significantly speed up the rate of redevelopment currently happening in low density areas. In recent years, approximately 500 lots have been redeveloped annually in these areas, mostly to build new single detached houses.

If multiplexes were to account for about 1/3rd of the redevelopment (with new house and duplex construction accounting for most of the other 2/3rds), we could expect to see approximately 150 multiplex projects per year.

Q. Won’t these changes just increase property values even more?

For most properties in low density areas, multiplexes would not impact property values. We expect single detached houses and duplexes would continue to be the primary driver of land values. On lots where multiplexes may increase land value (primarily larger properties and properties in higher-value locations), a higher density bonus rate would apply in order to offset that increase.

Links:

• City website on the proposed multiplex policy, including an online survey open until March 5. Public open house events begin this week: the first one is Tuesday evening at City Hall.

• Daily Hive article with the highlights of the policy

• Twitter thread by Peter Waldkirch

• Twitter thread by Avi Barzelai

• Twitter thread by Tom Davidoff

• Abundant Housing Vancouver - “This proposal allows far too little housing, in the areas with the best opportunity to add new homes without displacement.”

• Dan Fumano in the Vancouver Sun

• Frances Bula in the Globe and Mail

• Vancouver is ready to build new housing in old no-grow zones. But the plan is too timid. Globe editorial.

• Daily Hive article on sewer separation

• Upper Kitsilano Residents Association. Includes a number of criticisms, but their opposition isn’t very harsh. (Gentle density usually doesn’t get as much opposition as high-rises.) “While UKRA welcomes the idea of more missing middle in low-rise buildings as opposed to towers, it would be foolish not to see this as the beginning of a more densified city being planned for all neighbourhoods over the next 30 years.”