REDEFINING HOME

Part 4: What’s Really Driving Our Real Estate Market?

Welcome to the final chapter of our series, What's Really Driving Our Real Estate Market? We’ve been taking a look at the challenges and solutions around the Guelph real estate market – specifically, the severe lack of available homes.

Let me start by saying that I don’t for a second imagine I have the magic bullet that will make this market fair and equitable for everybody. I do, however, have some ideas and observations that I’ve developed over the last 3 decades of being involved in this market.

The challenges faced by our local real estate market are echoed in many markets across the country, most notably in Vancouver and Toronto. Over the past decade, smaller cities like Guelph, Ottawa and Kitchener/Waterloo have begun to experience challenges akin to those of the major cities. The root of that problem, as we’ve discussed at length, is a lack of supply and an ever-growing demand. Over the past few weeks, we’ve outlined some of the major factors in this blog series: immigration, interest rates, and a new generation of buyers entering the market.

Many of those factors, though, are outside of our ability to control at a local level. So what solutions exist within our community?

On the surface, the simple solution is to just build more homes and grow the city. The nuanced solution means looking at how we define a single family home, and when was that definition last reviewed? Not everyone wants the detached home with the white picket fence in a distant suburb. We know that today, the definition of family often means multiple generations. North America has a peculiar mindset that the younger generations need to leave the nest and start out on their own. Looking at many parts of Europe and Asia, the lack of physical space means families adapt or build homes that suit multiple generations.

Our North American culture has not embraced this type of housing because available land to build on has been, historically, cheap and plentiful. It was, and is, easier to build on what planners call greenfields than it is to repurpose or redevelop existing sites. It wasn’t long ago that any sort of “accessory” use in a single family zoning was restricted and actively enforced. Zoning restrictions have only recently started to relax, and allow for multigenerational homes as well as accessory apartments.

Municipalities need to further loosen zoning restrictions to accommodate a better utilization rate for new developments, as well as redevelopment. This means adding density to existing neighbourhoods, without resorting to huge multi-story buildings.

Many planners now embrace the concept of neighbourhoods in the sense that resources like shops, schools and work are closer to residential areas, and therefore make a neighbourhood more local and less car-dependent.

So how does this alleviate supply issues? Increased flexibility and density means we can add residential on top of existing commercial, redeveloping of old commercial buildings and strip plazas. To do this often requires zoning changes, as the existing zoning is generally not flexible enough to accommodate residential space. Changing official plans or amending existing official plans can be expensive, time consuming, and full of risk to property owners. If municipalities and provincial governments are keen to slow the greenfield expansion and developments, the process to rezone and repurpose existing sites needs to be more affordable and easier to accomplish.

As a community, along with the various levels of government, we need to be flexible and adaptable to new ideas and styles of homes. Redefining what “home” is will be the first step towards creating a community where everyone has access to a home. There’s a reason the tiny house trend has been growing beyond a fad and becoming a real solution to housing, as we’ve seen in cities like Spur, Texas and Portland, Oregon.

There was a feature in the Guelph Tribune just over a year ago discussing a proposed Harm Reduction Housing project in the city. The project looks at the possibility of taking shipping containers that have been transformed into modular homes, and putting them together to provide shelter to the city's homeless population. You can learn more about this project & see a video tour of the tiny homes at the links below:

Tiny Town in Guelph: Turning Shipping Containers into Affordable Homes (ARTICLE)

Turning Shipping Containers into Homes for Guelph’s Homeless Population (VIDEO)

What if we were to scale this process, enlarging it to accommodate families – suddenly there is possibility for creating realistic, affordable housing options. Of course, the major barrier – as the above article acknowledges – is the rules and bureaucracy that makes it difficult to build this type of housing.

The politicians and bureaucrats can change the rules to accommodate new ideas, however, we also need to wrap our heads around housing looking different, and accepting that difference in the marketplace. Without that acceptance, the Catch-22 of housing shortages will continue.

We’d love to hear from you on this topic. Would you object to tiny homes in your neighbourhood? Would you consider a home built from non-traditional materials – like shipping containers – on your street? Would you or your family consider living in one? Let us know what you think in the comments section below.

THE PAST WEEK IN THE GUELPH REAL ESTATE MARKET

Last week in our local market, 28 homes sold – not far off last year’s 31 sales.

The median home last week was surprisingly on the larger side: 4 bedrooms, 3 bathrooms, and 1,507 square feet. This home sold in 8 days for $649,900 – that’s $421/sqft and 106.1% of the original list price.

Same week last year, the median home looked more like what we’re used to seeing, with 3 beds, 2 baths and 1,431 square feet. In contrast, this home sold in 22 days for $565,000 – that’s $399/sqft and 98.3% of the original list price.

A whopping 24 of the 28 homes sold last week went at or above list price, while just 8 (of 31) did during the same week last year.

Thanks for being part of our community & following along with our blog. As always, if you have any questions about the local real estate market, send us an email at info@homegrouprealty.ca

Learn more about the Home Group Realty Journey

SIGN UP FOR SALES REPORTS

Not a subscriber? Sign up for our weekly blog and receive up-to-date information on local market conditions, plus receive exclusive reports with each week’s homes sales & sales price, for all of Guelph’s neighbourhoods and nearby cities