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A $700,000 house (happily) divided

KERRY GOLD

From Tuesday's Globe and Mail

Latest comment posted at 2:24 AM EST 09/08/08

Can't afford a house on your own? Try splitting one down the middle ...Read the full article

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  1. RD Lone from Vancouver, Canada writes: Nice, last ditch attempt to pump the market?

    Vancouver sales have plummeted and inventory has skyrocketed - shockingly similar to how Calgary and Edmonton before prices collapsed this year. Since the CHMC is paring back Canadian sub-prime (40 year zero down) they need to get more creative in finding the greater fool.

    This is just a disaster in the making anyway. When one person wants to move/sell this thing will be a wreck.
  2. R. Merchant from Calgary, Canada writes: An important issue to check out, only slightly noted in the article, is the legality of this arrangement relative to land use (zoning) and building codes. Most municipalities would interpret this as two living units or creating a duplex where only one existed before. The increase in density requires conformance with zoning, and implies more parking requirements, more services, mechanical and electrical changes, and more amenity space. In addition, building codes require proper exiting, egress, fire separations, sound separation, alarms.

    So imagine this scenario:
    Four cars now show up where space only exists for two, twice as many trips per day coming and going, an over heated fryer flames in one unit and dangerous smoke now spreads to second unit through interconnected ducts asphixiating the other sleeping couple, alarms are not interconnected so the other knows nothing about problems, the sewers sized for one family backs up because of peak loading, et. etc.
    I'm all for using these monster homes efficiently, but there are good reasons why we have zoning and codes.
  3. vanessa stirling from Canada writes: The headline and article are deceptive. 700K will not buy you a monster place in Kerrisdale, which is what the title suggests. You'll note that the article doesn't mention how much these two families paid for their 500 sq. ft of space there. My guess is upwards of 1 million (given the prices a few months ago). And that's not 'affordable' for most people.

    I'm just one of many people who has fled the unaffordability that is Vancouver. When a city can't house the people who run its infrastructure, then there's a major problem. And the nimby's who don't want higher density housing in 'their' neighbourhoods have an equal problem.
  4. Chucky Chucky from Canada writes: What happens if the other guy defaults on the mortgage?
    What happens when one wants to sell, but the other don't?
    What happens if the other guy don't properly maintains the place?
    What happens if the other guy wants to renovate, but the other one don't?

    I see a lot of risks here. This may work within families though.
  5. Bob Fugger from Victoria, BC, Canada writes: R. Merchant from Calgary, Canada writes: An important issue to check out, only slightly noted in the article, is the legality of this arrangement relative to land use (zoning) and building codes...

    I agree - it's not fair to everyone else to have a fly-by-night contractor come in and suite a place - although out here, you pretty much need a mortgage helper, unless you're independantly wealth. And trust me, despite a higher density of folks using existing infrastructure, one would assume that the city would take the higher tax revenue (multi-family units are taxed higher than single family) and re-invest it in upgrading the infrastructure.
  6. Overtaxed and underlaid from Canada writes: Does the risk/reward of purchasing a house with another couple outweigh the cost/benefit of just buying a townhouse / duplex unit / condo? Why overcomplicate, assuming of course a townhouse can be found in Vancouver.
  7. Doug Dewan from Canada writes: R. Merchant, what's the difference if it's four adults or two adults and their two teenage kids....still four cars and just as much crap!

    Chuckly...good points for people to consider. Lots of risks in this senario...ya want to make some legal documentation to cover all of these aspects.
  8. B C from Canada writes: This is a beautiful article illustrating the madness that occurs during a housing bubble.
  9. Guy Olivier from Columbus, Ohio, United States writes: You had better know the person(s) you are getting in this with... divorce, moving and so forth with either couples could present many problems.
  10. vanessa stirling from Canada writes: B C - unfortunately, they've been forecasting this as a bubble for years, and the house prices still keep going up. It's beyond ridiculous. And would i pay 350-600K for what is essentially a duplex? nope.
  11. aniphylactic shock troops from Victoria, Canada writes: You commenters are sad, lonely, desperate people. Working stiffs find creative ways to put roofs over their heads and you have to remind us of the grand conspiracy to "force" people to buy real estate despite the crash, you pull out the most gruesome doomsday scenario I've read in years, or you worry about how the lawyers will sort out the problems when the homeowners decide to sell.

    My gawd, with outlooks like yours, why do you people even get out of bed in the morning. It's too risky!
  12. M Irwin from Kits, Canada writes:
    Wow, I'm surprised at the number of people who have left comment who obviously DIDN'T READ THE ARTICLE but instead jumped in with their uninformed comments.

    Readers like...

    RD Lone from Vancouver,
    Guy Olivier from Columbus, Ohio, United States ,
    Doug Dewan from Canada and
    Chucky Chucky from Canada,

    READ THE WHOLE ARTICLE!
  13. Swifty J from Mtl, Canada writes: I find it strange that banks are (supposedly) lining up to finance these deals.

    Here in QC, we've long had a similar arrangement for selling off parts of a duplex or triplex without legally dividing the property into condos.

    But this arrangement, common though it is, is not something you can take to any old bank. You have a choice of two institutions (Caisse Desjardins or National Bank), and you have to have 20% down for your share.

    And now they're "reinventing" this setup in Vancouver... and banks are eager to hop on board? And no doubt they aren't asking for 20% down. I'm puzzled.
  14. Steve Not an Alberta Redneck from Calgary, Canada writes: I wonder if all the McMansions are subdividable here in Calgary. I suspect that the zoning won't allow it, but in the future, when people cannot afford these follies, I'm sure that the rules will change. Unfortunately, by then, people will want to live close to work and these monstrosities are usually at the edge of the city.

    It used to be that the robber baron's mansions were downtown and these properties are now converted into 9 apartments. Newer cities haven't developed along these lines.
  15. Naomi Y from Canada writes: R. Merchant from Calgary, Canada writes: An important issue to check out, only slightly noted in the article, is the legality of this arrangement relative to land use (zoning) and building codes. Most municipalities would interpret this as two living units or creating a duplex where only one existed before. The increase in density requires conformance with zoning, and implies more parking requirements, more services, mechanical and electrical changes, and more amenity space. In addition, building codes require proper exiting, egress, fire separations, sound separation, alarms.
    --------------------------------------------
    How is this difference from families who have a dozen ppl in the same house?

    If we want to be fair, shouldn't we use the number of adults/children per house instead of counting "Families"?
  16. Rusty Brown from beautiful, quiet, shady Cobourg, Ontario, Canada writes:
    Legalities? Zoning? Note that "there is a pair of internal communicating doors that are kept locked - unless the families are sharing a babysitter or co-hosting a party."

    So, technically, I would think, this is still a single dwelling shared by unrelated individuals, a not at all uncommon situation when you consider all the various rooming houses, shared apartments, townhouses &c. in any big city.

    My bet is that those pair of doors are not there as a matter of convenience at all, but an example of astute thinking.

    RB
  17. Down Town from Canada writes: Bleh. Ever heard of living within (or god forbid, below) your means?
  18. Eat your Weedies from Canada writes: What a great idea!.... Intra-family and for maybe 1% of the population. Too much of this and I see lots of law suits and a bureaucratic quagmire that constipates the justice system even further. I hope not too many people do this...
  19. Eat your Weedies from Canada writes: I meant "within the family" and not "intra-family"... sorry.
  20. John McMortimer-Boyles from An Undisclosed Underground Location Safe From Nuclear Attack, Canada writes: Naomi Y from Canada writes: "How is this difference from families who have a dozen ppl in the same house?"

    This left a smile on my face because it reminds me of a house one of my sisters and her ex bought. When they first looked at it, it was occupied by a group of about 20 people, and the only rooms that didn't have beds in them were the kitchen and the bathroom.

    To Down Town from Canada, in many Canadian cities these days it is hard to own an affordable house--even when you have an above average income. I bought my current house a few years back, and if I were doing the same move today, I would not be able to afford to live in the neighbourhood where I live. Even with recent declines in the prices of Edmonton homes, my house is still worth twice what I paid for it. The problem is, my income hasn't kept up with the housing market.

    Anyway, what the arrangement in the story indicates to me is that housing really is in a housing bubble. And when it bursts . . ..
  21. John McMortimer-Boyles from An Undisclosed Underground Location Safe From Nuclear Attack, Canada writes: Eat your Weedies from Canada writes: I meant "within the family" and not "intra-family"... sorry.

    No apology necessary. "Intra" means "within", amd so your original statment means exactly what you wanted to say.
  22. John Zimmerman from Victoria, BC, Canada writes: re: R. Merchant from Calgary, Canada writes: An important issue to check out, only slightly noted in the article, is the legality of this arrangement relative to land use (zoning) and building codes.
    _____________________________________________________

    I completely agree with your concerns but would also point out that, at least here in Victoria and I can only assume in Vancouver, the city often turns a blind eye to these type of zoning infractions. In fact, it is very common to see properties listed with "mortgage helper" suites that are fully disclosed as being non conforming suites. Further, Victoria just announced a program whereby it intends to try to legalize these suites rather than fight them.
  23. Rusty Brown from beautiful, quiet, shady Cobourg, Ontario, Canada writes:
    Really?

    Allah be praised! An outbreak of common sense in the mindless bureaucracy!

    RB
  24. Harbinger from Out West from Canada writes: Define the word "affordable"' please. Is it as easy as defining pornography or is it just in the "eye" or wallet of the beholder?Seems to me that the word affordable is not a definable term. So why the use of it?
  25. Eat your Weedies from Canada writes: Affordable: as in a) you easily have the money to pay for it or b) would survive should that thing suddenly disappear. I think most people can not afford what they permit themselves to have.
  26. Eat your Weedies from Canada writes: From an online dictionary...

    af·ford (-fôrd, -frd)
    tr.v. af·ford·ed, af·ford·ing, af·fords
    1. To have the financial means for; bear the cost of: not able to afford a new car.
    2. To manage to spare or give up: can't afford an hour for lunch.
    3. To manage or bear without disadvantage or risk to oneself: can afford to be tolerant.
    4. To make available; provide: a sport affording good exercise; a tree that affords ample shade."

    I think most people can not afford what they purchase by this definition. Affordable is more concrete than you seem to think Harbinger...
  27. Was Canadian from New York, United States writes: A generation ago one person (breadwinner) worked and a couple could afford a house - then two people worked to afford a house - now two people work to afford half a house?!

    I don't like where this is going...

    To rip off a Chris Rock line - we're eventually going to get down to a point where we can just jump up and down on the spot on one leg!!
  28. Harbinger from Out West from Canada writes: The term affordable is more concrete than I think? I doubt it. From a homeless bum all the way up to a guy like Jimmy Pattison, I beg to differ on the definition.
  29. Richard Hawrelak from Sarnia, Canada writes: vanessa stirling from Canada writes: The headline and article are deceptive. 700K will not buy you a monster place in Kerrisdale,

    vanessa, 700k for a small house in kerri? As I recall, they were all small. My God, how do students live these days? Some of us lived in 6x8 trailers next to Acadia camp, but many of us lived in rent-a-rooms in Kerrisdale. We drove our bikes to school, in the rain, to boot.
  30. Steve Not an Alberta Redneck from Calgary, Canada writes: John McMortimer-Boyles from An Undisclosed Underground Location Safe From Nuclear Attack, Canada writes: "Naomi Y from Canada writes: "How is this difference from families who have a dozen ppl in the same house?"

    This left a smile on my face because it reminds me of a house one of my sisters and her ex bought. When they first looked at it, it was occupied by a group of about 20 people, and the only rooms that didn't have beds in them were the kitchen and the bathroom."

    The record that I'm aware of was a 4 bedroom unit in Hub Mall on the U of A campus. The Chinese (HK) students put two sets of bunks in each tiny 8' x 7' bedroom and the "holder" of the lease got his own room, the L shaped store room - about 5" by 4" - missing a notch. Luxury!

    All were evicted.

    The Greyhound killer probably shared a room with 3 snorers.

    The unit rent in 1979 was $355 a month, divided by 17, so they each paid less than $21 a month. With a sack of rice and some bok choy, total cost was likely less than $60.

    In contrast, we usually kept a room open to use for studying and storage. Room, food and telephone was still less than $200/month.
  31. Rusty Brown from beautiful, quiet, shady Cobourg, Ontario, Canada writes:
    Memo to Eat your Weedies (and others):

    Main Entry: can·not (1 word, not two)
    Pronunciation: \ˈka-(ˌ)nät; kə-ˈnät, ka-ˈ\
    Date: 15th century
    — cannot but or cannot help but also cannot help : to be unable to do otherwise

    Unless you are trying to say: "I think most people can afford what they purchase ... not."

    RB
  32. Steve Not an Alberta Redneck from Calgary, Canada writes: An alternative to subdividing these houses is for seniors to revert to the lifestyle of the 80's. Have 5 of them live in one of these McMansions and they can help each other. It will be affordable and they will only need to cook dinner every 5 days.

    It will take a change of mindset but if we legalize pot, this will be possible. I'd like to see how this would affect my Mother's rigid mindset! Clinging to a large house one doesn't need and hoping that family visits has to be one of the saddest aspects of our society.
  33. Tim W. from Vancouver, Canada writes: I agree with the commenter that many here didn't read the full article. The people bought the home 3 years ago, they have a lengthy agreement of what to do in different circumstances, and what isn't mentioned is in Vancouver, the city turns a blind eye to these sorts of things because of the need for housing.

    And Down Town, these people ARE living within their means. That's the point of doing a deal like this. You get to own land, live in a house and in the area you want, but at a lower cost. My brother did this not long after university with two other friends. One of the friends died and he bought the other out so now he owns the whole place himself.

    This isn't a new thing in the least. In fact my wife and I were looking into this before we decided to buy a whole house ourselves. As long as there are strict rules laid out, it's a great way to get into a house if you normally couldn't afford it.
  34. Terry Terry from Brantford, Canada writes: The "door trick" is the usual route around the 2 dwelling units in an area zoned for singles. Parking js usually the main problem from these -- no problem with lack of outdoor amenity space, the kids are inside playing video games and eating pizza pops and Pepsi (,,, oops that's another story).
  35. Western Observer from Canada writes: Why on earth is Vancouver so expensive? There is no way I can afford to live there, despite making a good income, and hope to own a home. $700,000 for Kerrisdale is ridiculous, and yet still, the market sustains it. I hope they all crash and bring reality back in, but it just won't happen.

    So I can't live where I was born. Thanks a lot, city.
  36. Carl White from Canada writes: "Western Observer from Canada writes: Why on earth is Vancouver so expensive? There is no way I can afford to live there, despite making a good income, and hope to own a home. $700,000 for Kerrisdale is ridiculous, and yet still, the market sustains it. I hope they all crash and bring reality back in, but it just won't happen.

    So I can't live where I was born. Thanks a lot, city."

    Why? Because of demand. There's been huge demand for housing.

    Why? Because the population of Vancouver and the surrounding region has grown enormously.

    Why? Because of Canada's mass immigration policy. It certainly hasn't been because of people producing babies at below replacement rate.

    Thank mass immigration for "improving" the quality of your life so much.
  37. Confused By It All from Canada writes: This is not news - people have been buying houses and working out living arrangements like this in Toronto for 20 years. The reality is that one mortgage is often less costly per month than the rent on 2 apartments. The banks love it, because they have more people paying. And if one person decides to travel or go away for work for a year, their furniture, etc. are safe and they have a place to come back to. Not sure why folks on this thread seem so negative about a very useful strategy.
  38. Lowen Wrainger from Canada writes: Have the Israelis and Palestinians considered this household arrangement? They probably have at some point, but then reality sets in as one party always manages to say, 'I want it all!'
  39. vanessa stirling from Canada writes: Western Observer, you won't be getting a Kerrisdale house for anywhere near 700K now. Even though prices have 'dropped', the average house price in Vancouver is still just under 600K, and Kerrisdale, being a desirable neighbourhood, starts at 1million these days. Friends bought a small house (probably about 1000 sq ft in main and a 700 sq ft basement suite) on the east side of town (nowhere near Kerrisdale) for 700K last year. It's got a nice yard, but that's about all I can say about it. It was on the market for a while, too, so they got a 'reduced' price. And they've spent lots of time and $$ renovating the basement to actually make it liveable.

    yep, 700K for a duplex. nice.
  40. Christine M from Ottawa, Canada writes: People have enough trouble staying married these days. I have to believe that splitting a house would add a whole new layer of congestion to our civil courts.

    And what about infill policies? Isn't this an end run around them?
  41. k g from Canada writes: [Quote] Swifty J from Mtl, Canada writes: I find it strange that banks are (supposedly) lining up to finance these deals.

    Here in QC, we've long had a similar arrangement for selling off parts of a duplex or triplex without legally dividing the property into condos.

    But this arrangement, common though it is, is not something you can take to any old bank.[/quote]

    If you're talking about co-proprietorship, you're mistaken. The mortgage on my place is through Scotiabank, but my mortgage broker found decent deals with every major bank, and some loan agencies I'd never heard of.
  42. RD Lone from Vancouver, Canada writes: @ M Irwin from Kits: with all due respect, consider reading with your brain and not your eyes. Just because the globe and mail says it is a-ok doesn't mean that there are no problems.
  43. Carl Hansen from Canada writes: If the city ignores illegal suites then it is just a matter of time before you have people living in parks and shanty towns.
    That stuff you step in on the street might not be dog crap.
  44. Harold Alan from Victoria from Canada writes: Vanessa Stirling, you put your finger on an important issue: affordability for those who service the infrastructure. I think higher densities, ala many European countries is the answer. Vancouver like Calgary have followed the model of surburban sprawl rather than planning high density urban cores.
  45. Emma Hawthorne from Canada writes: I think it's the thin of the wedge of a massive housing revolt. There is no good reaosn for Canadians to be held ransom just to be able to own a home. It needs to be within everyone's reach, for just 25% of their income - and that should cover all housing costs, utilities, insurance, taxes, phone and internet. When Canadians decide they are going to force the cost of housing to 25% of net income and hold it there, they will find a way to do it and the market will follow.
  46. Marv M from Canada writes: I's a good idea, their loss will be equally split among two families once the great Canadian Housing Bubble scam collapses. You can't fight it, EVERY Bubble eventually pops and prices come crashing back down to earth. It will not be pretty in Western Canada after the Real Estate implosion dust settles.
  47. Mark Peart from New West, Canada writes: I think the house prices in Vancouver are eventually gonna fall also, but they are not gonna hit rock bottom. People have been calling for the bubble to burst almost 5 years now, meanwhile prices have continued to go up. Prices will not be appreciating 20-30% a year, instead it will probably increase a modest 2-5% per year. I am buying my place to live in, not as an investment, so that works fine for me. I will live here until I grow old if I have to. I moved here from Atlanta and for $150,000 I can get a 2000 sf house with alot of yard space, two car garage etc, so when I first came here I refused to spend 350,000 for a little apartment. So I have been waiting for the prices to come down for the past 3 years, which they haven't and I didn't feel like sitting around any longer, so my wife and I still went ahead and bought a brand new condo for $400,000 1035 sf 2bed and den and 2 bathrooms, river view, walking distance to the skytrain in New Westminster. It still pains me to talk about the price, but it had everything we wanted and we didn't want to let this one go,so I took the plunge. My point is, I was just as salty as some of the people on here a couple months ago, wishing for the bubble to burst, but now that I bought my own place, I wish they would all die a slow and painful death...just kidding...but shut up and go to hell.....lol.
  48. Harbinger from Out West from Canada writes: A lot of money for a warm place to sleep. Plus impress yer friends and neighbours too!
  49. Swifty J from Mtl, Canada writes: "If you're talking about co-proprietorship, you're mistaken. The mortgage on my place is through Scotiabank, but my mortgage broker found decent deals with every major bank, and some loan agencies I'd never heard of."

    Undivided co-proprietorship. It's definitely only Desjardins and National, as a chat with any banker or notary will show. (A few months ago I personally spoke with bankers from Scotiabank and three others about this.)

    I'm guessing you're either not in Quebec, or you're in a divided co-property (a.k.a. condo) situation.

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