Thursday, January 26, 2012

Taking a Second Look at Second Suites, part 1

The Canadian Mortgage and Housing Corporation insures mortgages so aspiring homeowners need a lower down payment. But the CMHC also keeps a finger on the pulse of the housing market in each community, both ownership and rental.
Theirnews for Barrie isn’t good. Rental vacancy rates dropped to 1.7% in 2011 and are projected to be only 1.5% in 2012. A healthy vacancy rate is 3%, providing a good choice in units for tenants and a secure market for landlords.
Two main consequences of low vacancy rates are higher rents and worse choice in units. People must settle for apartments which are too small, in the wrong part of town, or otherwise substandard, yet pay more for them. Lousy or overpriced housing is one more stress for families already struggling with higher electric and water bills and increasing gas prices or transit fares.
New rental housing isn’t coming very fast, if at all. There are promises to include affordable housing in the mix in the new annexation lands, but those are still many years off. Even once construction starts, higher density affordable units are usually the last to be built, only after the developers have made the big money selling premium properties.
Intensification is great, but there is a dearth of affordable housing proposals for our existing urban areas. Any higher density proposal meets with zoning obstacles and neighbourhood opposition, and most apartment buildings that get approved are aimed at seniors. This leaves out the rest of the demographics.
One of the best and quickest solutions would be to increase the facility for second units (apartments in houses, or granny suites) in all existing neighbourhoods. In fact, in recognition of this, the province is requiring municipalities to alter their official plans to allow for greater use of this housing mode, as part of the Strong Communities through Affordable Housing Act.
Second suites are a gentle form of intensification. Requiring no new construction or infrastructure, they don’t create a visible change in the neighbourhood. Instead, they fill underutilized space in existing homes. Our houses have grown larger while average family size has shrunk, leaving a lot of half-empty homes that can easily be split and shared.
Second units make housing more affordable for tenants and owners. A young family buying a home can rent out part of it to help pay the mortgage. Seniors and empty-nesters with an apartment get help with expenses, and someone to share yard work and show-shoveling duties. Aging or emptying residential areas are renewed as younger families move in. Having more residents improves the sense of community and security of the street.
In part two, I will address myths behind common objections to second suites.

Published in the Barrie Examiner as Root Issues: "Second suites a gentle form of intensification"
Erich Jacoby-Hawkins is a director of the Ontario School of Economic Science and Earthsharing Canada


  1. Thoughtful post Erich! We have a substantial problem in Guelph of students living in either secondary suites or, more emphatically, students living in houses owned by absentee landlords. Students come out of living in the University residence without having learned about accountability or being a good neighbour and seemingly increasingly run into problems of litter, noise and other actions inconsiderate of their more permanent community members.

  2. Generally this problem originally stems from insufficient planning by the municipality, so the market responds. Absentee landlords trying to maximize their return will usually prefer a non-divided house, because it leaves more rooms to be rented out. Second suites tend more towards resident landlords, or at least those who have families (rather than students) as tenants.

    Barrie has this student party-house problem, too - I think it's universal in college towns. I didn't (mis)behave like that when I was that age, so I'm not sure how the problem is created or how to solve it. But I'm sure that banning second suites (as is essentially the case right now in Barrie) doesn't do anything to solve the problem, and may in fact make it worse.

  3. Rental vacancy only shows how the market is going on. The prediction may not come as a surprise.

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