BCBusiness

| L AND VALUES T H E B R I E F 18 | BC B U S I N E SS OCTOB ER 2025 sounds so enticing. Sure, the maintenance payments seem high—$1,000 a month for some of them—but how bad could that be when you'd have a mortgage that's smaller than the cost of some people's kitchen renos? Tear down that adorable but, really, out-of-date, modest and mortgage-free house that you bought in 1992—one that's now a lot of work to keep up, with the yard, the aging roof, the plumbing issues and more. Build four homes on the same lot, sell three of them for something like $1,100 to $1,400 a square foot and walk away with a million-plus in pre-tax profits. Or you could house a couple of your kids and rent out the fourth unit for another stream of retire- ment income. That's the potential deal available to tens of thousands of people in this province who bought their homes decades ago and now find themselves sitting on property that has essentially been upzoned by the province. That's the picture that David Babakaiff paints for potential clients who are cautiously pondering this opportunity to become "citizen developers," as he calls them, thanks to the province's law enacted in December 2023 that says any single- family residential property in a city or town with 5,000 or more population could be redeveloped into duplexes, triplexes, fourplexes or up to sixplexes. "Now, those houses are in a new asset class. Overnight, they went from single- family to a small multi-family asset," says Babakaiff, one of the partners at the custom home-building company Alair Homes. You'd think that would kick off a big building boom throughout the province among the 42 percent of B.C. homeown- ers who are mortgage free (50 percent in Vancouver proper). But, it turns out, that's not happening. At least not yet. The idea of undertaking a building proj- ect that would require at least two million or more to finance is daunting to many hesitant homeowners—even though some builders are offering to do multiplex projects as a joint venture with owners. The subset of builders in B.C. who specialize in smaller projects all say that current land costs and construction costs are stalling what would have likely been a big new wave of housing if it had been an option in the 2010s. "If cities had allowed this 10 years ago, it would have worked quite well," says Bryn Davidson, co-owner of Lanefab Design/ Build, which has specialized in laneway houses for the past couple of decades. That housing form boomed after the City of Van- couver allowed for it in 2009, and about 6,000 have been built in that city alone. Davidson has a few multiplex projects on the go, partly a result of his ability to get slightly more square footage than nominally allowed because he is using passive-house techniques to create net zero energy-efficient homes. Jake Fry, owner of Smallworks, who has spent almost two decades building laneway homes, is even more blunt about current prospects. This is only an option for people who bought their property years ago, are mortgage-free and are able and willing to finance the significant construction costs—or enter into some kind of joint venture with a builder, he says. "If you go buy a piece of land now, it doesn't work," says Fry; other builders agree. Daniel Clarke is another person who has been seeing flurries of interest from different types of potential fourplex owners, but the initial enthusiasm dies off as people grapple with the financial realities. Plenty of families are thinking of developing their own property or going in jointly to buy land and build, says Clarke, an architect whose site explains all the complexities of the new form and who has fielded dozens of calls, including inquiries from small builders—those who've specialized in duplexes and the odd triplex in the past—looking at whether they can make it work. Full-time developers are trying to figure out how to capitalize on this new possibility. There are even realtors who call him seeking insight into potential. "What everyone has found," Clarke says, "the cost to build is too high [estimates are around $400 a square foot these days] and L A N D V A L U E S The Case of the Missing Fourplexes Upzoning promised untold riches to homeowners willing to redevelop their properties into multiple units. Here's why that never happened. — By Frances Bula It

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