A listing for a single-family house on Main St. in Vancouver is offering a 50-per-cent share in ownership, with an asking price of $748,888.For that, the buyer would get half the home — the first floor is 800 sq. ft. with two bedrooms and one bathroom, the second floor is 700 sq. ft. in unfinished basement space — as well as half the yard on a 65 x 90-ft. corner lot.“Why would you buy a townhouse when you can own (this)?” the listing asks.Listed by Vancouver realtors Rimpy Hothi and Giles Pan, the house was co-owned by friends for decades, going back to the mid-1980s. One of them passed away recently and the estate is selling his 50-per-cent share of the property.Co-owning isn’t a new concept. Many immigrant families have shared ownership of homes for decades, with multiple generations living together under one roof. As prices have skyrocketed throughout the Lower Mainland over the past decade, co-owning has become more common and taken on various forms.Nick Tay and Lena Sin co-own an East Vancouver property with another couple. It’s a double lot on which there is now a main house and a laneway home. Tay knew one of the other co-owners from work and they had been friends for years before deciding to buy the property together in 2005.“We had been through a lot and knew each other well,” said Tay. He was still cautious about mixing money and friendship, but “we said, after five years, we can sell and divide the profits.”Instead, by the time that date came in 2010, they had each met their significant others and agreed to sign a fresh agreement to build a laneway home and have all four of them co-own both the main house and the new laneway house.Tay and Sin own 47 per cent of the whole property and, along with two young children, live in the newly built, 1,170-sq.-ft. laneway home. The other couple own 53 per cent of the whole property and live in the older, main home, which is over 3,000 sq. ft.The ownership breakdown is not based on square footage, but rather on the amount of money invested by each side, said Tay.Of the various trade-offs, he said: “Their maintenance costs are much higher — the (main) house is over 100 years old. But they are protecting our investment (too). And we are happy living here in a (smaller, but) newer place.”“There are many advantages (of this arrangement) over owning a townhome or an apartment,” said Sin. “We have a garden and we don’t share walls with anyone. There are no strata fees.”But they acknowledge that while co-owning a property like this is something you can do, to do it these days “your budget still has to be high,” said Tay, thinking of how much the cost of land and construction has increased.LISTEN: President and CEO of the Urban Development Institute Anne McMullin and adjunct professor at the Centre for Sustainable Development Michael Geller join host Stuart McNish to discuss measures taken in the B.C. NDP budget to impact the housing market. Can government’s plan to target the demand side of the housing equation lead to lasting results?
Although Vancouver real estate prices are declining somewhat, so is affordability based on local incomes.A recent National Bank Financial study estimated the jaw-dropping number of months it would take to save enough money for a downpayment on an average non-condo home, based on saving 10 per cent of a buyer’s income.In Vancouver, a homebuyer would have to save for 340 months (or over 28 years), compared to 102 months in Toronto and 34 months in Montreal.The same study found mortgage payments as a percentage of income are 75.8 per cent in Toronto, but in Vancouver, they have “crossed the psychological threshold of 100 per cent as it would now require 101.5 per cent of pre-tax median income to pay for a representative home.”“Are only the rich able to buy a home these days?” asked RBC chief economist Craig Wright.He estimates the income needed to cover ownership costs of an average Vancouver home and clear the mortgage stress test is $211,000 in Vancouver, compared to $167,000 in Toronto and $154,000 in Victoria.Vancouver realtor Noam Dolgin wonders if collaborating to own could be an answer for those who still dream of living in a house with a yard. Instead of trying to buy an entire single-family property, they might be able to co-own one or, put another way, buy a share in one. Or for retirees who already own a single-family home and want to live in a smaller space, selling a share of their freehold property could be a way to cash out some money and continue to live in their home.There are many different ways such homes and lots can be divided, said Dolgin.“Two families could (together own) a Vancouver Special house, where there are two floors of about equal floor space, where one family would live upstairs and the other downstairs and they could do a 55-per-cent, 45-per-cent split” of the ownership.“Or two parties could share a property and one would live in a main house and the other in a laneway house.”On a per-square-foot basis, he said, it makes sense when you consider that a 2,500-sq.-ft. home in East Vancouver is going for about $1.5 million, or $600 per square foot, compared to the going rate of $700 or $800 per square foot for condos in the area.Last spring, he started holding monthly “mixers” to connect people interested in the idea. About 20 people showed up to the first one.“There are some who have been coming repeatedly to events,” said Dolgin, although he admits that solidifying a match that leads to a co-owning arrangement is a challenge.
The half duplex at 7818 Main St. is for sale.
Gerry Kahrmann /
Sharply escalating prices mean that many legal agreements being drawn up for co-ownership involve the gifting of wealth from the Bank of Mom and Dad to their children, said Khushal Bains of Vancouver law firm Bell Alliance.In general, Bains said, it has become “too much money to risk doing with your friends” or another party.There have been instances where co-ownership ended with a court battle after the relationship soured. A few years ago, two families who met in a mother-and-baby group and co-owned a home in North Vancouver for almost eight years had to go to court when their once-close friendship ended.Vancity, which offers mixer mortgages that allow for two parties to have different rates and terms for their individual share of a property, has a check-list for would-be co-owners, said senior mortgage development manager Ryan McKinley.The list includes all co-owners taking out life insurance under the same policy so that shares of the home are protected in case of death, deciding on a process for resolving disputes, and setting up a joint fund for emergency firstname.lastname@example.org