Vancouverites turn to co-ownership to jump into red-hot market
With skyrocketing property values, more people are turning to co-owning a house as a way to get into the real estate market, according to a Vancouver real estate lawyer.
“Over the last six to 12 months, this has become one of the hottest issues in the city for parents and their children. We’re going to see more and more of this,” said Richard Bell.
Bell not only helps clients navigate co-ownership, he’s adopted the strategy for his own family. He and his wife Reni Kind have gifted their daughter Heather Bell and her husband Andrew Stegemann 20 per cent ownership of their home in the hot Cambie neighbourhood.
The couple, in their thirties, was resigned to be renters for a long time until they sealed this arrangement.
The two couples are planning on redeveloping the West 22nd Avenue property into a duplex and a laneway house. The adult children will pay for their portion of the duplex.
“Without something like this, they’re not going to own a piece of dirt in the city,” said Richard Bell.
Some parents build laneway houses to rent to their children, but Bell prefers co-owning because it lets them build equity.
He admits it’s not for all families. Co-ownership gets a little more complicated for non-related parties but he advises having a written agreement anticipating different scenarios.
“We’re really close with Heather’s family and we’re really comfortable having some of those difficult discussions,” says Stegemann.
Heather Bell says they could move into the laneway house and rent out their half of the duplex if one day they somehow couldn’t afford their share. If they had to move, she hopes the city would eventually allow them to stratify so they could sell their unit.
Acting Mayor Raymond Louie says there are no plans now to create more strata in single family neighbourhoods but they’re waiting for a report from the Chief Housing Officer which might include recommendations for further stratification.
“In any case, it’ll entail a significant amount of consultation for rezoning before that would happen,” said Louie.
Bell points out that co-ownership is not just great for the young buyer, but for the city. It creates more density while preserving the character of neighbourhoods. The Cambie corridor is rapidly transforming as single family homes make way for condos.
But what if parents can’t help out?
Vancouver realtor Jen Li has heard from many clients wanting to co-own. She’s working on a website that will connect buyers. Li cites a recent report that says 40 per cent of first-time home buyers are turning to the “Bank of Mom and Dad” for their down payment.
“What about the other 60 per cent? They also want to buy properties. Co-buying can help with the down payment which is a big issue,” said Li.
She calls her website, which has yet to be launched, “house dating” or “real estate dating” – a way for people to find financial partners in a market that’s increasingly out of reach.