BC Zoning Changes | BC Residential Zoning Changes | Vancouver Real Estate Podcast

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Did the province just incite the next land rush? Municipalities have until June 30th to revamp single family zoned real estate across the province. Density is coming. But what does that mean for land values? And did we just witness the death of the single family home?

Associate Professor Tom Davidoff sits down with Matt & Adam to discuss landmark changes to housing in the Lower Mainland and the province, and whether new policies will move the needle on affordability.

Also, what are Tom’s thoughts on the state of the market, interest rates and inflation, and where prices are heading in 2024? All this and more in this action-packed VREP master class.

What are the BC zoning changes in 2024?

There are three new zoning changes in BC that could have a major effect on Vancouver real estate in 2024.

1) The City of Vancouver is allowing multi unit housing on single family lots

A lot of Vancouver, historically, was only zoned for detached, single family homes. About 15 years ago, laneways homes and basement suites were allowed, and then duplexes.

Now, city council is allowing multi units or multiplexes on previous single family lots. 33-foot lots can have four-plexes and 50-foot lots can have six-plexes.

2) The province has instructed municipalities to have at least 1.5 FSR

The province has released a framework where almost every municipality in BC can’t have an FSR (floor space ratio) of less than 1.5. This means structures can cover 50% of a lot and be three stories tall.

Tom Davidoff, associate professor at UBC Sauder School of Business, points out that the province’s measure is actually more generous than the city’s. He hopes the City of Vancouver steps up to where the province is since the greatest need for housing density is in Vancouver.

3) The province is increasing density around Transit-Oriented Development (TOD) Areas

This legislation by the government of BC increases minimum density in TOD Areas, namely “within 800 metres of a rapid transit station (e.g. SkyTrain station) and 400 metres of a bus exchange and West Coast Express.”

As Davidoff points out, this could be a big windfall for single family homeowners who suddenly get up-zoned to significantly higher density by being in one of these transit-oriented areas.

How will BC Zoning Changes affect supply and pricing?

Overall, Davidoff feels that the new BC zoning changes are good policy, particularly when 70%+ of land in most jurisdictions is dedicated to detached, single family homes. But he acknowledges that increased density policies alone won’t make new buildings affordable.

Davidoff’s hope is that multi unit buildings will at least be more affordable than detached homes, and that the spillover of new apartments will push down the prices on older apartments.

He’s also optimistic that some of the new rezoning processes will be sped up since there are so many eligible sites and they’re consistent with the city plan, meaning they won’t involve a public hearing. The political process should also be smoother with these new policies.

However, high interest rates mean the cost of multi unit housing is still high. Davidoff warns this will likely mean we won’t see a lot of construction in 2024. Expect to see an improvement in supply a few years down the road.

For single family homeowners, property values will be determined by what you can build on your current lot and how nice your existing property is. A tear down on a large lot by a Skytrain station is going to see a significant value increase compared to a new luxury build on a 50 foot lot in the suburbs.

Like the laneway houses, Davidoff believes the new multiplex zoning will be a matter of learning by doing. The original laneway houses were almost unlivable but over a decade later, they’ve transformed. As the building community gets more familiar with these new regulations, Davidoff expects we’ll see better designs and more take up of multi unit projects.

How will BC Zoning Changes and the increase in multi units affect the overall Vancouver housing market in 2024?

Initially, it may seem like the increase in upcoming multi unit supply would mean bad news for townhome, duplex and condo pricing. But Davidoff warns, “The typical buyer makes decisions based on what inventory is available today, not what inventory they think is going to be available in the future.”

Davidoff predicts that condo pricing in Vancouver will stay pretty flat this year. He doesn’t believe presales will impact the existing market too much.

And while we may not see a lot of multiplexes built this year due to high interest rates, Davidoff does believe that will impact the single family housing market. He predicts single family house pricing will be up 7.5% year over year in Vancouver.