Co-living: another type of housing needed in Vancouver.

According to Vancouver Is Awesome North Vancouver is now the most expensive place in which to rent an unfurnished one-bedroom unit in Canada, with its new-to-market units averaging $2,802 a month in February; it also had the highest prices for two- and three-bedroom units.

Nonetheless, most single people live alone often in these expensive studio or one-bedroom apartments. While two unrelated people may share a two-bedroom apartment, rarely do two unrelated people share a one-bedroom apartment. Furthermore, the living room is rarely used at night. Why? Because the standard one-bedroom apartment design is not conducive to sharing.

I am therefore hoping North Vancouver District staff and Council will welcome our proposal for a new 5-storey building in Maplewood Village Centre offering 33 co-living suites designed for sharing. As a result of the unique design features, these 33 suites could provide more affordable accommodation for up to 88 residents.

If you are not familiar with co-living, it is different from co-housing, or cooperative housing. Instead, it is what many of us experienced when we were at university or starting our first job. It is living with other people and sharing...sometimes a bathroom, but always a kitchen (or two), and living/dining spaces. Sometimes the rooms are furnished or partially furnished and sometimes some services are provided.

Coliving often happens in an old house shared by five people, or it can be a large new building conplex like those being developed by common.com and other similar operators. I personally experienced different forms of co-living which I wrote about five years ago in an article about the need for more innovative forms of housing. https://www.vancouverisawesome.com/courier-archive/opinion/vancouver-needs-innovative-approach-towards-affordable-rental-housing-3103544 Some of these experiences resulted in some innovative designs at UniverCity, the model sustainable community I oversaw at SFU from 1999 to 2006.

I have recently been working with a developer and Integra Architects on a proposal for a residential development on a small site in Maplewood Village Centre in the District of North Vancouver, within walking distance of various shops and services and Phibbs BusExchange. While from the outside it appears like a conventional 5-storey apartment building, the building offers an excellent opportunity to create another form of co-living, with a variety of suite layouts designed for sharing. Our goal is to incorporate some of the best ideas developed at UniverCity and other co-living developments.

Below are illustrations of two such suite designs incorporating what CMHC and others sometimes refer to as 'flex housing' features.

In this proposal the flexible one-bedroom, two-bedroom and four-bedroom suite designs allow living rooms to become bedrooms at night. How? By simply adding a door to the living room and including a small closet.

The building also includes lock-off suite designs, similar to those pioneered at UniverCity. The lock-off potion of the suite creates a rental unit and mortgage helper for a first time buyer. However, in this building the lock-off suite also has a living room designed to serve as bedroom at night.

As my former colleague Norm Couttie, former president of Adera, who is working with me on this proposal recently said, given the housing affordability crisis, we cannot continue to do things just like we did in the past. We need to try and innovate. Some innovations may not work. But others may well lead to commonplace solutions in the future. I believe our North Van District proposal will work, especially if it can be regarded as a demonstration project. We just need to get the planning staff and Council to let us proceed, sooner rather than later, since the interest meter is ticking!

Is it time to bring back market 'equity' Cooperative Housing?

Earlier this week, John Mackie wrote an article about a waterfront apartment for sale without a requirement for property transfer tax. Why? Because it had an 'unusual ownership structure'. What was its structure, you ask? It was a cooperative (or coop), not a condominium. You can read John's story here. https://vancouversun.com/business/real-estate/a-waterfront-view-with-a-quirk-no-property-transfer-tax#:~:text=Ocean%20Towers%20isn't%20a,to%20purchasing%20a%20strata%20property.

The False Creek Coop is one of the many government subsidized housing cooperatives with which I was involved as Program Manager-Social Housing for CMHC in the 1970s

Cooperative Housing  Most people don't understand cooperative housing. They assume it is a form of low-income housing. While most coops around Metro are in fact government subsidized developments occupied by predominantly lower income households, cooperative ownership is simply a form of tenure for a building with multiple housing units accommodating both low or high income households. In New York, coops are often associated with the highest income households. For example, The Dakota where John Lennon lived was a cooperative.https://en.wikipedia.org/wiki/The_Dakota

The Dakota in New York, one of the most exclusive apartment buildings in America

There are numerous differences between a coop and condo. However, the key difference is that in a condominium you have ownership of your individual unit and an undivided share in all the common spaces in the building. You also have a right to participate in the collective governance of the private and common property.

In a co-op, you own shares in a company that owns the building. Consequently, as a co-op owner, you don't own the unit itself. But your shares are equal to the value of your unit, relative to the value of total building.  A good summary can be found here. https://www.rvlaw.ca/co-operatives-and-how-they-differ-from-condominiums/

An example of an older cooperative built in 1947, that recently made way for a new condominium development.

Cooperatives were common in Vancouver before condominium legislation was first introduced during the 1960s. In fact, it was the primary way of 'owning' an apartment, as distinct from renting. The first condominium sale in Canada was in 1967 in Ottawa https://knewresearch.com/a-glimpse-into-history-the-first-condo-ever-sold-in-canada/ While I didn't come to Vancouver until 1974, I'm told that condominium tenure was not popular when first allowed. It took a number of years before it became acceptable. 

Since the introduction of condominium tenure in BC I am not aware of any new market equity (that is non-government subsidized) cooperatives being developed in BC. However, as I watch the accumulation of government taxes and changing rules and regulations affecting condominiums, I think it might make sense, in limited instances, to bring back this form of tenure as an alternative to a condominium.

For one thing, and this may upset some of you, cooperative boards unlike strata councils, can decide who gets to live in their building. If they don't want renters or households with children or pets, they don't have to allow them. In fact, cooperatives can be quite selective in deciding who gets to live in the building. I once was asked to write a letter of reference on behalf of a friend who wanted to buy into one of Vancouver's remaining cooperatives occupying a valuable piece of land in Shaughnessy.

Another consideration is the increasing number of taxes that apply to condominium units but do not apply to dwellings within a coop. In addition to no property transfer tax, Empty Home and Speculation and Vacancy Taxes do not apply to units within a coop. The Foreign Buyers Tax does not apply either.

Each year, the Vancouver Sun invites me to write an 'outlook' column on what to expect in the coming year. My columns are often a mix of predictions and aspirations. In my January 2023 column, I wrote that for various reasons, we might start to see a renewed interest in cooperative housing. https://vancouversun.com/homes/metro-vancouver-real-estate-commentator-michael-geller-reflects-on-past-predictions-looks-to-the-future.  Here's an excerpt:

"The combined impact of the prohibition on rental and age restrictions, along with expanded or increased provincial and municipal speculation and vacancy taxes and the federal government’s forthcoming underused housing tax (UHT), might have a surprising, unanticipated consequence.

Prior to the introduction of strata-title legislation, the most usual form of apartment ownership in B.C. was the housing co-operative. Unlike a condominium, where one owns the apartment and a percentage of the common area, in a co-operative, one owns a share in a corporation that owns the building. The share is associated with a particular unit.

In recent years, co-operatives have been developed for lower-income households, usually with government subsidies. However, in the future, some higher-income households may find a New York-style co-op more appealing than a condominium since municipal, provincial, and federal speculation and vacancy taxes will not apply. B.C.’s property transfer tax and companion foreign-buyers tax will also generally not apply. Furthermore, co-ops can independently impose additional rules and restrictions, including who can live in the building."

While I do not expect cooperatives to ever replace condominiums, I think it will make senses for some enterprising developers to initiate new housing cooperatives, especially for people who like the idea of restricting who can live in their buildings and don't need large mortgages. These developments should be particularly appealing to those wanting second homes in British Columbia, including foreign buyers. While governments will no doubt immediately start to explore how they can impose their various vacancy taxes on these homes, it might not be possible without significant legislative changes.

If I were a younger man, I would most definitely initiate a new housing cooperative for all of the above reasons. But instead, I will watch with interest and be delighted to assist anyone who does decide to try.

Thanks John Mackie for inspiring me to resume the conversation.