Road to building more multiplex homes in B.C. could be bumpy, experts say, as similar plan in U.S. halted

B.C.'s proposed legislation aimed at increasing small-scale, multi-unit housing in the province may face multiple bumps in the road — and still not have the desired effect of increasing affordable housing supply, according to experts who looked at similar approaches in the U.S.

The new law would require local governments to update zoning bylaws to permit multi-unit buildings on lots typically used for single-family detached homes.

It would also require one secondary suite or laneway home to be allowed on lots zoned single-family or duplex in communities throughout the province.

The changes would apply to municipalities with populations over 5,000, and the province says local governments are expected to update their bylaws to accommodate the new zoning requirements by the end of June next year.

The province estimates the initiatives could create 130,000 new, small-scale homes over the next decade.

Gradual process

In 2019, the state of Oregon passed a bill that allows duplexes to be built in areas zoned for single-family housing and up to four homes on almost any residential lot in cities of a certain size. In 2020, officials in Portland, Ore., introduced a law allowing up to six units with strict affordability requirements.

Michael Andersen, a senior housing researcher at the non-profit Sightline Institute in Portland, says the changes have been slow to come, and have yet to make a dent in housing affordability.

"It is absolutely not a panacea. It is not going to solve the shortage," Andersen told CBC Radio's The Current.

Portland's population is roughly 640,000 and Andersen says the city has seen only 200 to 300 additional homes created per year in the first few years of the new zoning.

"Once in a while a lot turns over, once in a while one of those lots is redeveloped. That's not a wholesale rapid process. That's a very gradual process," he said.

Vancouver-based property tax expert Paul Sullivan says B.C. should also look to Minneapolis, Minn. In 2018, the city approved a housing plan that effectively spelled the end of single-family zoning in the city.

As of 2020, property owners in that city were allowed to build duplexes or triplexes or expand existing houses, but so far the overall results have not had a huge impact, said Sullivan. 

A 2022 Bloomberg story said ending single-family zoning had led to fewer than 100 new housing units from January 2020 through June 2022.

Minneapolis city records show 104 building permits were issued for duplexes, triplexes, and fourplexes buildings since January 2020.

Sullivan says there are multiple reasons why developers will be slow to get behind building multiplex homes.

"Money is super expensive. There's no proven business model on how quickly these things are going to get permitted and approved," he said, adding that historically, building multiplex dwellings hasn't proven to be profitable for developers.

"And then to insert them in single-family neighbourhoods produces additional risks. If I'm going to be the first guy building a sixplex across the street from a bunch of single-family homes, I'm going to anticipate some opposition from residents."

Earlier this week, and following a lengthy court battle, a county district court judge forced the city to reinstate single-family zoning after a group of residents successfully sued to block the plan, saying it violated state environmental laws.

The city of Minneapolis announced on its website that, due to a court order, it was reinstating single-family zoning immediately.

Political efforts will be 'formidable'

At Harvard University's Joint Center for Housing Studies, senior research fellow Alexander von Hoffman looked at the efforts Minneapolis and Oregon undertook to allow building up to four units on a previously single-family lot.

He concluded that most new development will be done one lot at a time by homeowners or small-scale builders — and that history suggests eliminating single-family zoning is unlikely to significantly increase housing stock.

"To unleash residential development will require peeling back layers of regulations that have accrued over the decades," von Hoffman wrote. "That could mean reducing minimum lot sizes, relaxing overly stringent construction and site requirements, easing design reviews, and rolling back some environmental controls."

A statement from Premier David Eby earlier this month said "outdated zoning rules'' are making it harder for people in B.C. to find a place to live in their own communities.

"Constructing mostly high-rise condo towers or single-family homes means B.C. isn't building enough small-scale multi-unit homes that fit into existing neighbourhoods and give people more housing options that are within reach.''

The province also said Auckland, New Zealand made similar changes in 2016, which led to the creation of more than 20,000 additional new homes over five years.