Branden and Sylvie Kotyk are turning their Mount Pleasant home into a three-unit multiplex using a new financing program by Vancity specifically for multiplex construction.Deep Green Developments
Vancouver’s plan for densifying the parts of the city formerly zoned as single-family is straightforward – replace much of it with the three-, four- and-six-unit housing known as the multiplex. And multiplex homes are popping up on side streets throughout the city.
But building multiplex housing is not without its challenges, as builders and homeowners are discovering. Some of the new designs don’t fit with the neighbourhood. Building fees are high and the cost of construction has become so onerous that inexperienced mom-and-pop developers are advised not to enter into it without the help of a professional.
West side builder Joel Silverman, owner of Clear Water Development Group, has built a lot of house conversions over his career. He has one multiplex project under way, another about to get started and two more sites in the pipeline. Mr. Silverman is a developer who doesn’t take on projects for others.
While he’s enthusiastic about the gentle density approach, he said it’s going to transform the city, for better – and in some cases, for worse.
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In 20 years, west side neighbourhoods like Mackenzie Heights and Kerrisdale will be “canyons of multiplexes,” he said.
“I haven’t seen any west side ones that look pretty, that look any good,” he said. “They’re pretty abrupt, they’re pretty ugly. He said his projects will be different. “We’re going to bring some grace to the space; some generosity to the space – and some aesthetic value.”
One way to do that, he’s decided, is to save as many trees as possible.
“I’ve fallen in love with trees because they … how should I say … bring scale to the building.
“They actually help us camouflage these big abrupt buildings a little bit. So, keep the big, mature 100-foot trees,” he said. “Sure, we’ve got to take a few out on some of these lots, but you need the dappled light.”
He’s also opting to put four units on a 50-foot lot instead of the allowable six, to create more spacious housing. He is building a sixplex on an 88-foot-wide lot, but the biggest obstacle is the city’s density bonus rates charged for densifying the lot. Mr. Silverman said he’s looking at around $82,000 per unit, and that doesn’t include other significant fees and costs. He applied for a development permit a year ago and is still waiting.
The Kotyk's are using Mr. Kotyk's development experience to turn their Mount Pleasant home into a multiplex.Deep Green Developments
“This, in addition to approximately $200,000 in other fees and levies – and that doesn’t include the more than 12 months’ carrying cost it took to get permits,” he wrote in an e-mail.
“The [fees charged to densify a lot] were set about three years ago, in better times … and yes, we were aware of fee rates when we bought and planned the project,” he said. “But if anyone thinks development is a road to certain riches, that is a popular and misguided perception.”
He is aware that many homeowners are considering densifying their properties. But he advises that they hire an experienced co-developer if they want to take on a multiplex development.
Renderings of the Kotyk's finished multiplex project.Deep Green Developments
For those homeowners with building experience, the developer role might not be as daunting. Branden and Sylvie Kotyk are turning their Mount Pleasant home into a three-unit multiplex that will also be pushing the envelope on green building practices, according to Mr. Kotyk, who is owner of Deep Green Developments.
The couple is posting the construction process on YouTube, under the name 1908 to Net Zero.
“It’s the first of its kind in Canada, and it’s the first character home that is being reconstructed to [Canadian Home Builders Association] net zero standard, and it’s also a multiplex conversion,” said Mr. Kotyk, who has a background in commercial construction and prefabrication.
He’s partnered with the CHBA for their house to be a case study nationally that will show others what is involved in building “gentle density,” with low-carbon construction, while retaining the character of the neighbourhood.
So far, they have lifted the 1908 house and built a new low-carbon concrete foundation with insulating concrete forms. They will construct a three-bedroom primary suite and a two-bedroom ground floor suite, in addition to a three-bedroom laneway house, on a standard 33- by 122-foot lot. Once finished, they will have doubled the floor space of the existing home.
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But the policy that made this possible was the city’s move to stratify the units, which made the appraised value of the three separately owned units enough to obtain financing. The Kotyks are the first to use a new financing program by Vancity – the Vancouver City Savings Credit Union – specifically for multiplex construction.
There are many risks and setbacks to construction, he cautions. For instance, they discovered an oil tank buried in the property, which added significantly to costs.
“That said, by taking a long-term view and also ensuring that we’re designing housing that is fit for purpose and fit for what families need and not purely for an investment purpose, there’s going to be a demand there,” he said.
“It will hold its value. But I certainly would not recommend this as a flipping exercise. It truly needs to be done for the right reasons.”
The City of Vancouver approved multiplex up to six units, or eight for secured market rental, in some single-family residential areas in 2023. The province passed legislation the following year allowing three to four units or up to six units near transit, of small-scale multi-unit housing.
To convert the Kotyk's house into a multiplex, it has been raised on stilts to enable the pouring of a new foundation.Deep Green Developments
Wellington Holbrook, Vancity’s chief executive officer, says “the magic sauce” is the provincial legislation that allows the units to be legally separate strata units, with separate titles and separate mortgages. The new Vancity financing is aimed at the mom-and-pop developer who owns a house with a lot of equity built up, and they want to redevelop it as a multiplex. The new financing allows homeowners to take out a loan that is similar to construction financing, but without the level of scrutiny that a commercial developer must go through.
“What we’ve done is treated it like if you were to build your own standalone single unit home, this operates very similar to the financing you would obtain on that basis as a consumer,” said Mr. Holbrook. “They can develop their property just like it’s their own home, even though they’re building units for others.”
But the Canadian financing world is too conservative and limited compared to financing that is offered in other countries, he said, and it’s limiting the construction of new housing. His beef with the housing landscape in Canada, especially around financing, is that there is so little innovation.
“We don’t have enough competition in banking,” said Mr. Holbrook. “Even though the banks do a pretty good job overall, we have a lot of underserved markets … and I think this is an example of that.”