Hidden alternatives to get into the housing market

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Noam Dolgin, a real estate agent who specializes in home co-ownership, outside of one of his current listings in Vancouver, on June 2.JENNIFER GAUTHIER/The Globe and Mail

Jen Abrams has lived for seven years in a 978-square-foot float house called the Lilypad, moored at Richmond Marina and walking distance to the SkyTrain station, which brings her downtown in 15 minutes.

The set decoration buyer for the film industry has decided to sell her beloved home because she wants to spend more time outside the country. She recently listed it for $439,900 – a steal by Lower Mainland standards.

The Lilypad, one of maybe three dozen float homes in the marina, is two floors, with kitchen, laundry room, dining and living rooms, one bedroom and den, patios, garden, storage and light filled rooms. She pays annual property taxes of $600, as well as monthly moorage of $1,142. (There’s a distinction between a float house – which can’t move on its own power – and a house boat, which can.)

Financing is limited. Few lenders offer mortgages on float homes, and her insurance is higher. But overall, she feels that her housing costs and lifestyle are preferable to a condo unit. The views from her windows are ocean, and she’s central and secure, with a security gate at the entrance to the marina, a parking space, and a close-knit community around her.

Ms. Abrams had always wondered about float houses after seeing them on Granville Island, and after her divorce in 2016, she found herself in the rental market.

“I looked at a coach house on 33rd and Clark in the back of a house, and it was like $2,200 a month. I was so close to renting it because I needed a place. I had money, but I didn’t have enough to afford a place in Vancouver for a down payment.

“I’m not looking for brand new, I don’t like high-rise living, that kind of thing. I’m always looking for something cool and different, and comfy, and this house came up on the market, and so I went to look and I walked through the door and said, ‘Oh my God, this is my house.’ I totally fell in love with it.

“Between my mortgage and moorage, I was still paying less than my friends who rented in downtown Vancouver.”

For those willing to think outside the boxy condo, or high-priced house, there are options. Her agent Thomas Beeson sold her home seven years ago, and it was his first float home transaction. Since then, he’s sold several more, including one to his father, which became his dad’s “dream home.”

Most buyers pay cash, he says, which means they’re often down-sizing. And although landless, the homes hold their value. Ms. Abrams paid $270,000 for her house and prices for float homes have since gone up considerably due to demand. Since it was listed this month, there’s been considerable interest in the house, which was built around 1980.

“In Vancouver real estate, even the weird stuff grows in value too,” Mr. Beeson says. “It’s obviously not going to grow at the same rate as traditional real estate, but she did very well.”

He added that it’s impossible to find a house on land in her neighborhood for less than $1.5-million.

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The Lilypad, home of Jen Abrams. The 978 sq. ft. the floating house is moored at Richmond Marina and is walking distance to the SkyTrain station, which brings her downtown in 15 minutes. It is currently listed for sale at $439,900.The Vancouver Agency

Another alternative to traditional housing is the corporate-owned building, or equity co-operative, which is a co-op that is privately owned by its shareholder residents. It is the precursor to the strata unit, which came along in the late 1960s. Until then, people formed corporations and purchased shares in apartment buildings and leased back the units. In Vancouver, many of these buildings were built throughout Kerrisdale, Oakridge, Kitsilano and the West End, and several of them remain today.

Because they are not legally strata, they can put restrictions in place, so a lot of them operate as adults-only buildings, which is a limitation. It’s similar to the New York co-op model, whereby purchasers often go through an interview process. Most don’t allow rentals, making them unappealing to investors. Generally, banks also want 35-per-cent down, which is a higher down payment than required for the usual strata unit.

But realtor Krystian Thomas, who specializes in co-op buildings, says these buildings are centrally located and often have spectacular views, and are larger than the average strata unit, and may have heritage features such as hardwood floors and coved ceilings. Because they’re older, they often don’t have in-suite laundry, but there are shared laundry rooms. There’s a monthly fee, similar to a strata fee, but sometimes the fee includes property taxes. And oftentimes, buyers do not pay the property transfer tax, although Mr. Thomas says buyers should always consult with a professional to determine upfront costs.

Mr. Thomas grew up in a non-profit co-op, which is what most people think of when they think of a co-op. People shouldn’t confuse it with the equity co-op from 50-plus years ago, he says.

“Back then, small was 700 or 800 sq. ft., so one of the selling features is house-size furniture friendly, perfect for downsizers.”

He estimates that these units typically sell on average for $100,000 to $200,000 less than a condo.

“It’s a huge gap. They aren’t giving them away, but they’re much larger, and people are paying less.”

He’s sold six equity co-op units this year so far. One of the more popular buildings is 2055 Pendrell St., called Panorama Place, a 25-storey tower in the West End that was built in 1965. Buyers are always asking him if there’s anything available there. It’s a 27-storey building with a rooftop, live-in caretaker, swimming pool and unobstructed views of Stanley Park. A one-bedroom there sells for about $800,000 to $1-million, which would be much higher if in a strata building.

He just sold a co-op unit at 106-2015 Haro St. for $507,000. It didn’t have a view, but it was a bright, large unit, near Lost Lagoon. He has a listing at 903-710 Chilco St. for a unit with unobstructed views, priced at $749,000. That one received an offer the first day it was listed. The buyer is just waiting for an interview with the management.

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2044 Turner St., in East Vancouver, is currently listed for $1.025 million as a 50 per cent co-ownership property. The house has an upper floor loft that is 1,098 sq. ft. with two bedrooms and mountain views. There’s a garden and large yard, and the property comes with half the income from a basement rental suite.Heller Murch Reallty

Basically, if you’re willing to forego all the modern trimmings of a deluxe new condo, the equity co-op is an option, he says.

“Your swimming pool is English Bay, your treadmill is the park and your therapy is the birds outside and no traffic. You might not get the amenities of a luxury building, and they aren’t for everybody. But they hold their values,” Mr. Thomas says.

Another option that could get someone into the market at a reasonable cost is co-ownership, a growing movement among boomers and millennials alike, says realtor Noam Dolgin, who specializes in matching co-owners with properties around the province.

Mr. Dolgin offers popular tours of shareable East Vancouver houses, which are most often divided into individual spaces, but with shared mortgages. He recently sold co-ownership of a property at 2281 E. 10th Ave., which received eight offers. The owners had sold a 55-per-cent ownership stake listed for $998,000, offering 1,216 sq. ft., three bedrooms and two bathrooms on the top floor of a house with shared yard.

He has a current listing for 50-per-cent ownership in a house with an upper floor loft that is 1,098 sq. ft. with two bedrooms and mountain views at 2044 Turner St., in East Vancouver. There’s a garden and large yard, and half the income from a basement rental suite. That one is listed for $1,025-million, and there’s an existing low-rate mortgage.

He says most lenders offer co-ownership mortgages, but credit unions allow more flexibility, such as when a co-owner wants to move on and a new owner wants to take on an existing mortgage.

Mr. Dolgin said most of his clients were friends or strangers, but family members and unmarried couples often entered into co-ownership agreements too. For younger people, and those with families, it’s a viable way to enter the market. And for boomers who own more houses than they need, it’s a viable way to stay in the market, free up some cash, and share costs. It’s also becoming a popular way to own recreational property too.

“I think co-ownership has definitely come of age,” Mr. Dolgin says. “I’m working with multiple groups and getting a lot of interest and having general meetings with folks moving into this space. We are doing stuff on Gabriel [Island], Parksville, Duncan, and Victoria. All the stats out there say this is going to be huge, that Gen-Z non-owners are considering co-ownership as the pathway to home ownership.”

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