Wednesday, 3 October 2012

"Ya gotta live somewhere!" - a wider perspective on home values

Concerns have circulated that the single-family homeowners might be left disadvantaged without future prospects for development, disenfranchised from the area's redevelopment.  For some this idea is manifested as an imperative to push for residential density "before it is all eaten up”.

Within the detached family house area of our community there is a requirement for a wide range of viable housing forms to match a range of needs, not a single blanket approach to the matter.  Several development brokers and analysts have examined our situation in terms of what is most probably acceptable to the greater community, as well as agreeable to the majority of the single-family homeowners who want to remain in this neighbourhood and have invested themselves into the community fabric for the longterm.

Several key points arose from discussions with development professionals:  (a) most people do not realize near the money they have been led to expect as a result of selling their homes for redevelopment, (2) the uplift of property values for anything  below a FSR of 1.0-1.2 is practically nil.  It is only at densities of 1.4 - 1.75 FSR (ie; 3 storey multifamily units) that there is a clear upside lift of the property over selling straight across as a single family residence.

As a comparison, one needs to look at the values of homes in neighbourhoods long recognized as highly desirable.  A teardown in Kerrisdale currently goes for $3.5 mil, while just up  the road most Edgemont teardowns for single-family redevelopment sell for upwards of $1.25+ mil.

Simply stated, there is no need for most homeowners here to accept radical measures to ensure the value of their property.  With completion of a well-developed and walkable Village Centre, this area will see appreciation rise as others begin to recognize the same benefits to the area we do.  As the figures above illustrate, people will pay to live in an area with convenience, connection and vitality.  This benefit will derive not only to those in the immediate detached homes, but to all in the neighbourhood including the Woodcroft apartment complex.

Most of our present residents are not what one would call wealthy in today's terms.  The money they would receive as a result of uplift value for their homes will not - in most cases - allow them to replace their home in other areas of the DNV.  In all probability, moving to another area will not bring the daily living benefits and conveniences they will be able to obtain here, right where they are at present.  

Even small features, such as the opportunity to access co-op cars would in many cases, allow residents to forego a second car at an annual savings of $5,500 - 8,000+ (Cdn. Automobile Assoc. 2011 study).   That level of annual savings, compounded over 15 years would result in significant increase to one's retirement savings.

Seen from this perspective there appears to be no basis for residents to imagine they must accept selling and moving from the neighbourhood.  Everyone has to live somewhere.  With an appropriate set of options, all homeowners will be able to obtain benefits to their daily living for which they would be hard pressed to attach only monetary value .
It's always good to remember, "Ya gotta live somewhere..."

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