Is Real Estate Densification Good or Bad for Our Cities?
One of the most contested arguments around urban planning and housing has been whether real estate densification is good or bad for our cities. In some spheres, densification can be the key to a city’s future, leading to reduced urban sprawl, accessible transit, and more vibrant and walkable amenities. Densification is suggested to not only increase the value of the land for those who own large lots, allowing them to subdivide for profits, but it also decreases the cost of entry for many looking to purchase their first home.
Others regard it as a net negative for our communities, citing increased traffic, deteriorating parking, fears regarding the creation of slum neighborhoods, and a departure from the favoured suburban living environments North Americans have grown accustomed to.
The Canada West Foundation, on the topic of densification, cited in 2009, “to the extent that western Canadians get (density supported by public transit) right, we will be ahead of our international competitors; to the extent that we get it wrong, we will fall behind in the race to sustain economic prosperity and the quality of life to which it contributes.”
Undoubtedly, the stakes are high, but it seems a clear winner in the debate is starting to emerge.
Densification may be inevitable
Major metropolitan areas in Canada such as Toronto and Vancouver may be proof that high-density housing is here to stay. Median home prices in Toronto were listed at $1,205,815 in 2017 and have not dropped significantly in 2019 despite a minor cooling. Even as housing prices dip or rise only modestly in 2019, home affordability will decline in most Canadian cities according to a recent report from the Royal Bank of Canada.
As housing prices continue to climb across the Lower Mainland, it’s beginning to spill into areas such as Chilliwack, a municipality well known for its urban sprawl. As a result, low vacancy rates in Chilliwack are leaving people desperate to find suitable accommodations.
Chilliwack residents are citing that densification is the solution as hillside living is expensive and farmland developments are not allowed by the ALR, therefore leaving densification as the only viable choice. “[I] just hope densification is done taking full consideration of community feedback,” wrote one resident in an editorial piece published by the Chilliwack Progress.
Densification being pushed by law
Densification is being pushed via a new bill that allows single-family homes to be converted to four-unit buildings anywhere in the state of California. A property could, with no interference, subdivide or remodel a house to turn it into four apartments. California isn’t the only state to consider or act on such a drastic shift in policy.
Planners in Charlotte, N.C. are looking to eliminate single-family zoning and the Minneapolis City Council has already voted to successfully eliminate single-family zoning to allow duplexes and triplexes to be built on lots reserved for one house to tackle the housing crisis and inequity caused by rising housing costs. High-cost cities such as Seattle and Portland have also considered rezoning single-family lots or allowing up to four-unit buildings in single-family neighborhoods.
British Columbia municipalities looking to curb urban sprawl
Kelowna City Council is preparing to shift to urbanization by promoting the future growth of the city in established core areas to limit sprawl. Two-thirds of the growth in the next 20 years will take place in the urban centres of Downtown, South Pandosy, Capri-Landmark, Midtown, and Rutland, which will equal roughly 18,750 housing units.
This decision is favoured by UBC community planning professor Frank Lawrence, who mentions that, “one of the biggest problems that we face is that some of the suburban cities are permitting incredible amounts of development away from transit.” He suggests that developments should occur near city centres easily accessed by public transit.
The City of Surrey’s urban planning department has initiated public consultations on light rail to help determine where the focus for new developments or rezoning should occur. “Surrey currently plans out development by identifying frequent transit corridors in its official community plan,” reports Katya Slepian of the Surrey Now-Leader, lending further evidence to the shifting focus coming from British Columbia municipalities.
Densification benefits both land owner and home buyer
Densification seems to benefit all parties involved. Those who own larger lots will benefit from the subdivision process as a one acre lot divided into two half acre lots will fetch more money in the market. At the same time, the price of the half acre lot is significantly less than the full acre, allowing for easier entry into the market for those looking to purchase land.
Finpedient is an ally in the future of urban planning
The current landscape of urban planning points to the end of the densification debate. With major regions across North America now pushing to the end of single-family zoning, it is apparent that Finpedient is at the forefront of a major shift in policy. Finpedient provides direct connections to investors and real estate developers. Non-traditional lending such as direct financing can help many to successfully convert their single-family homes into apartments, duplexes, and triplexes, allowing owners to increase their net wealth and at the same time aid in solving the current housing crisis.
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