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Old Posted Mar 10, 2009, 4:03 PM
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Basement Suites in the Sky

Basement Suites in the Sky

Lock-off suites could help young families own condos and create rental housing for singles.

http://thetyee.ca/News/2009/03/10/SkySuites/
By Monte Paulsen

Published: March 10, 2009
TheTyee.ca

High atop Burnaby Mountain stands a housing solution that could unlock one of the thorniest problems facing Vancouver and other expensive B.C. cities: Where to house the students, artists and other working singles who are critical to creating an information-based economy.

The City of Burnaby may be the first municipality in the world to legalize secondary suites within apartments -- also called lock-off suites -- that enable owners of condominiums to do what owners of houses have done for decades: rent out extra space.

Towers of basement suites

"Basement suites provide the most affordable housing in the Lower Mainland," said architect and planner Michael Geller. "Some of these basement suites are legal; most are not. Some remain as rental housing in perpetuity; others are taken over by the homeowner as family size increases, or family finances improve."

A longtime advocate of Flex Housing, Geller was president of the SFU Community Trust during the development of UniverCity http://www.univercity.ca/home.42.html, a planned community of up to 4,500 homes on 200 acres adjacent to Simon Fraser University.

"Both the university and the City of Burnaby wanted to provide some affordable housing for students within the community. However, the university did not want to use high value land for student housing, especially since it might "de-value" the adjacent condominium sites," Geller explained.

"So the question we asked ourselves was: Why not create the equivalent of a basement suite in a fifth-floor apartment?" he said.

"The answer came from resort architecture. We've all been in a hotel room or suite where, through a series of interlocking doors, two individual rooms can be joined as one suite," Geller said.

After considerable negotiation, the City of Burnaby amended its bylaws to approve lock-off suites within up to half of the apartments and townhomes at UniverCity. The suites must be at least 240 square feet. They are permitted to have their own entry from the corridor, as well as their own bathroom and cooking facilities.

"When we initially thought of this concept, we expected these suites would be the third bedroom in a three-bedroom unit," Geller said. "However, the first units to be built were in fact two bedroom units, where the second bedroom could either be the master bedroom, or a separate suite."

Twenty-four such suites were built as part of the first development at UniverCity. (See sample floor plan, above.)

"I am quite certain that nowhere else in North America -- or for that matter, in the world -- has another municipality developed a specific zoning bylaw to govern suites within apartments," Geller said. "Burnaby did it in 2002. And Vancouver is looking into it now."

Flexibility does not come cheap

The Burnaby Mountain lock-off suites are not "affordable" in the strictest sense.

In fact, Geller figures they cost between $20,000 and $30,000 more than the same-sized unit with ensuite bathrooms but without lock-off capability. Included in this amount is the extra door to the corridor, more fire-proofing between living quarters, an additional electrical panel and wiring, and parking.

"In order to increase affordability, the city agreed that it would relax its normal parking requirements," Geller said. "Only one space was provided for every four secondary suites."

But the existence of the lock-off suites -- and, specifically, the prospect of their rental income -- has made these relatively expensive apartments more purchase-able, because lenders have regarded a portion of the anticipated rent as income.

"This allows a young family to get into the suite they might not otherwise afford. And later, when kids need their own room, they can take over the whole suite," Geller said.

"Some people would argue that costs inherent in making a home flexible are too great," Geller said. "Particularly recognizing that, at least in North America, we have a propensity to move quite frequently. Others might argue that our propensity to move is a result of the fact that our homes can't change as our needs change."

Filling a gap in the rental market

The lock-off suites have not proven cheap to rent, either. These tiny bachelor suites -- ranging in size from 240 to 285 square feet -- fetch from $525 to $750 per month.

"They rented for much more than I expected," Geller said. "Still, they rent for considerably less than for a conventional one-bedroom suite."

But while the rents are quite high on a per-foot basis, these tiny suites are cheaper than almost anything other than a substandard basement suite or an aging residential hotel.

This may prove to be the lock-off suite's greatest advantage: It serves the most extremely under-served gap in British Columbia's expensive urban rental markets.

In Vancouver, newly built or recently renovated one-bedroom apartments in walkable neighbourhoods rent for about $1,200 a month. Basement suites fetch $750. And a bug-infested room in an aging residential hotel runs to almost $600 a month -- if one can be found.

This leaves students, artists, and other young singles priced out of the market. It also serves as a profound disincentive for the province's tens of thousands of mentally ill and frequently addicted citizens to better their lives: After all, why undertake all the hard work of getting clean if, years later, one is going to wind up shelling out $600 a month to live in the same sort of residential hotel that one lived in on welfare?

A clean, modern suite -- even a miniscule one -- for between $525 and $750 a month is precisely the grail sought after by thousands of single Vancouverites, including many in what Richard Florida calls the Creative Class.

"It's not necessarily affordability in the sense that most people use the word," Geller said of the UniverCity lock-off suites. "But it created a housing choice that would not otherwise have been provided."
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  #2  
Old Posted Mar 10, 2009, 4:04 PM
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i saw these when i went up to look at UniverCity. TINY!

as well, 285 sq ft for $750 is nuts
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Old Posted Mar 10, 2009, 4:17 PM
WarrenC12 WarrenC12 is offline
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I guess these are meant to compete with dorms, but I remember some of the crappiest SFU dorms being around $250/month back when I was there in the late 90s.
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Old Posted Mar 10, 2009, 4:45 PM
twoNeurons twoNeurons is offline
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$750!! Two Words: "Rip" "Off"

But hey... it would definitely be a good investment. I'm thinking... not only "mortgage" helper but people who want to live with their aging parents or in-laws... but don't want to live "with" them.
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Old Posted Mar 10, 2009, 5:15 PM
DKaz DKaz is offline
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Yah $550, 600 tops is reasonable but everything in UniverCity is expensive anyway. You pay for the location. I saw one of the rooms, it's decent sized for a student not wanting to mix quarters, a tiny little bathroom and a reasonable all-in-one kitchenette.
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Old Posted Mar 10, 2009, 8:01 PM
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The sooner people realize that these "mortgage helpers" are a false economy (i.e. make property more expensive), all the better.

Let me explain thusly: you are in the market to buy, and have two choices. One with and one without a "mortgage helper" suite. Which one can you pay more for? Why the one with the mortgage helper, of course, because you can afford to get a bigger mortgage given the rent you can get from renting the suite out.

Me, I'll take the cheaper property without the basement suite and forego having to be a landlord to a city of pothead renters.
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Old Posted Mar 10, 2009, 9:07 PM
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Quote:
Originally Posted by s211 View Post
The sooner people realize that these "mortgage helpers" are a false economy (i.e. make property more expensive), all the better.

Let me explain thusly: you are in the market to buy, and have two choices. One with and one without a "mortgage helper" suite. Which one can you pay more for? Why the one with the mortgage helper, of course, because you can afford to get a bigger mortgage given the rent you can get from renting the suite out.

Me, I'll take the cheaper property without the basement suite and forego having to be a landlord to a city of pothead renters.
well, sort of. a basement suite also means that the house is bigger with more assets (bedrooms, kitchens, etc.) in that case, you should pay more.

as well, if a couple buys a house (or in this case, a condo), their space needs may be small but grows as the family grows. then you kick out the tenants and voila.... new baby room plus entertainment room!

but i agree, being a landlord sucks
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Old Posted Mar 10, 2009, 10:30 PM
WarrenC12 WarrenC12 is offline
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To add to that, if I want to live in the same building as other people, I'll buy a condo. If I want to live in my own SFH, it won't have any other suites. It's that simple.
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Old Posted Mar 11, 2009, 1:35 AM
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Smaller lots and rowhouses are not permitted in typical single family zones, so a typical house built to the maximum floor area under the zoning can accommodate three or more small suites if they're packed in. If smaller lots with a lower maximum far/fsr had been the rule when most of the city's single family stock was built, you could say that this was a false economy for the owner. But because there are no cheaper smaller lots to choose from, renting out a suite can make sense.
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Old Posted Mar 11, 2009, 1:40 AM
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Quote:
The lock-off suites have not proven cheap to rent, either. These tiny bachelor suites -- ranging in size from 240 to 285 square feet -- fetch from $525 to $750 per month.

"They rented for much more than I expected," Geller said. "Still, they rent for considerably less than for a conventional one-bedroom suite."
I know a number of people who rent basement suites in different parts of Metro Vancouver (Vancouver, Surrey, Coquitlam) they are all about 500sf and cost about $700 a month. That is such a rip off, especially for SFU; 240sf unit for $700 should be located in central London or Manhattan.
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Old Posted Mar 11, 2009, 1:58 AM
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That's not too bad, it's between $2-3/psf. The going rate downtown for new construction rentals is just over $2/psf. Remember that prices shoot up psf as the size gets smaller, in the DTES most SROS are ~100sqft and go for $375/month, so much more then those units, and I can assure you the SFU units are much nicer. Yes you can find a basement suite for $500 but it's going to be an old building and probably an illegal suite. Most legalized basement suites still rent out for ~$700/month for a one bedroom and while the size might be a little larger the location wouldn't be a good. Plus those places have amenties that basement suites don't offer. Just playing devils advocate.
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Old Posted Mar 11, 2009, 3:03 AM
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in surrey you can get a nice place for $500 in a basement suite

my friend looked at some a while back - there was a 2 bedroom for $550 included cable and utilities except phone
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Old Posted Mar 12, 2009, 10:06 PM
twoNeurons twoNeurons is offline
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Quote:
Originally Posted by s211 View Post
The sooner people realize that these "mortgage helpers" are a false economy (i.e. make property more expensive), all the better.

Let me explain thusly: you are in the market to buy, and have two choices. One with and one without a "mortgage helper" suite. Which one can you pay more for? Why the one with the mortgage helper, of course, because you can afford to get a bigger mortgage given the rent you can get from renting the suite out.

Me, I'll take the cheaper property without the basement suite and forego having to be a landlord to a city of pothead renters.
In some cases, you are correct, however, since most of the cost is in the land, you are in effect getting renters to subsidize the land for you. The net effect is that the property price goes up, but as others said, in many cases, it's a case of wanting to be in a house but not having any lots small enough to build a sfh that's affordable.

People who have small kids are thinking to the future when they can have their married kids in a suite of their own in the basement... or the kids, when taking care of their aged parents, can keep them closer.

There's a lot more to "mortgage helpers" than just buying more house than you can afford.

People used to buy sfh to be just that... single family homes. Ranchers with three bdrms up and two down. Not anymore.

In any case, it actually adds density.
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