The discussion of secondary suites in neighbourhoods
I recently attended a town hall meeting in Peterborough, Ontario. A small city, about 1 1/2 hours northeast of Toronto. The main point of discussion was the plan to add secondary suites into single-family homes throughout the city of Peterborough. The event was well attended and the presenter was very thorough.
However, when he finished, some locals expressed their concern with the plan. Most of their concerns were typical.
Although they understood the need to add more housing and rental units, they didn’t want these units in their neighbourhoods. These people are known as NIMBYs – Not in My Back Yard.
Politicians are always nervous about making policy that aggravates the NIMBY crowd. The worry is whether these vocal few represent the silent majority or are they a few wingnuts that complain about everything.
At this meeting the main concerns of the NIMBYs were about parking:
- There are too many cars on the streets:
- Lowering the feel and overall condition of the neighbourhood
- and the lowering of property values
The effects of secondary suites
First off, people are creating secondary suites regardless of whether it is legal or not. Should the ability to legalize be added, this will ensure that the standard of the units will improve. From a safety standpoint, this is huge.
Next, the better quality apartments will lead to better quality tenants. With vacancy as low as it is, that short supply of quality rental space will actually limit the city’s growth potential.
In order for a city’s population to grow, there needs more housing for people to move there.
Parking is usually the main issue. However, it surprised me, and pretty much every person over the age of 40, that many younger people want to live in a place and own fewer vehicles, not more. If they are close to their employment and places they want to hang out, they really don’t need a car every day. In the suburbs, that may be less frequent, but that is the trend.
Many of these towns can’t or won’t be able to spread out easily, so densifying the community is the only other logical option for growth. Adding apartment buildings really do change the landscape of a community. Now simply taking the existing home and adding in a secondary suite won’t directly change the look of the community.
Finally property values, an issue that I spoke on. The reality is creating secondary suites has a tremendously positive impact on property value. In fact, typically the legal 2-units sell for the most in the neighbourhood and help to raise the property value of the other homes in the area.
Secondary suites build property value
There was a NIMBY that shared that he was close to retirement and was planning on selling his home soo. He thought secondary suites in his neighbourhood would cost him retirement money. It was news to the group that banning secondary suites were actually limiting their market appreciation. Allowing these units to be built will invite out of town investors to enter the local housing market. This extra competition will have a real impact on property values in the area. If you are a homeowner in Peterborough, you should be doing a happy dance, as this new policy will help property value jump in price.
As of March 2018, we are still waiting for the policy to be enacted. I did offer some suggested revisions that might make the policy more efficient.
The Doors to Wealth Real Estate Group see Peterborough as a strong secondary market with low vacancy, immediate cash flow and good opportunities for appreciation. We are conducting our first Investor Tour this month. In addition, we have spent many many hours creating a PDF of information for our clients.
If you are interested in learning more about the Peterborough market, reach out to us.