Do laneway homes in Vancouver make property values?

In the real estate world, there is a historic divide between the east and west sides of Vancouver, and researchers have found that it reappears.

A study by UBC shows that laneway houses, the secondary detached domiciles built on properties, usually as rental units, can damage the value of neighboring properties. They found that if there was a house with a path within 100m of a property on the west side of town, that property would get a 2.8 percent lower sale price.

For neighbors, the price drops 3.8 percent and the value of properties in the most affluent areas of the city can drop by 4.7 percent.

In East Vancouver, the impact of laneway homes in a neighborhood was negligible.

“The total effect is about 2.8 per cent, but this is because the effect is so much greater at the high end. In many areas, the effect was much smaller,” says associate professor and co-author Dr. Tsur Somerville in a press release.

The reasons for the pattern are not so surprising, researchers found. The main reason for the price impact was that people did not want people living in the houses that are usually adjacent to a lane to look into their backyard.

“So when the second floor of the neighbor’s street looks right into the back of my house and into my backyard, that’s where we find the negative effects,” says Dr. Somerville. “That’s what we’re really picking up.”

In other words, it’s very much part of the ‘not in my back yard’ attitude known as NIMBYism.

Other factors were the density of the area and “a disgust for tenants.”

The report’s co-author, Dr. Thomas Davidoff, notes that research on specific topics such as that described in the paper allows for a better understanding of complex issues surrounding housing affordability.

“So it’s important to understand at a slightly more detailed level how neighborhood density affects homeowners,” he explains.

In recent years, thousands of new laneway homes have been built after Vancouver City changed the rules for redevelopment in 2009.

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