Affordable Housing Micro-living

Affordable Housing Micro-living

Guelph, like most Canadian cities, has a shortage of affordable housing. It’s a very complex issue and one that I can’t claim to fully appreciate or understand. But I do think about it constantly and wonder what role the City of Guelph can play to help address this issue. In particular, I wonder if Guelph can deal with aspects of affordable housing differently, rather than just doing more of the same.


Micro-Living and Guelph
Have you heard of micro-living or perhaps micro-condos? Think of apartment-style units that are much smaller than what people think of traditional condo dwellings – in the range of 200-300 sq. ft. – which is closer to the size of a hotel room. Their popularity has exploded in the North American condo market in recent years as potential condo buyers search for less costly living arrangements in larger urban areas like Toronto, New York, Vancouver, etc. Doing a Google image search for “micro-condo” shows you some amazingly efficient designs that are making small living comfortable (and affordable!) for buyers.


Currently there are no micro-living units in Guelph of which I am aware. Some 1-bedroom condos can be as small as 450-600 sq. ft. or so, but nothing as tiny and efficient as a true micro-unit. Including micro-units in Guelph’s housing landscape may not be appropriate for small families or couples but could be an ideal solution for those preferring to live alone.


Micro-Units Equals Micro-Costs
Can city constructed and owned micro-units help address the shortage of affordable housing in Guelph? Although issues of funding and regulating affordable housing typically falls partially to other levels of government (Wellington County or Provincial/Federal responsibilities), I think Guelph can take a leadership role in creating such units. By driving the construction ourselves, rather than hoping the private sector steps up to participate actively in affordable housing, Guelph can keep costs low without direct taxpayer subsidies.


Costing Example
Consider this article from CTV News that talks about a 4-storey condo of micro-units recently marketed in Surrey, BC. A private developer sold small 300 sq. ft. condo units starting around $110,000 each. This price is obviously significantly higher than what a city could create them for since:


• the private developer needs to purchase land, whereas a city could potentially build an affordable apartment on its own land;
• the developer needs to pay development charges to the city, whereas the city would obviously not incur this full cost;
• these micro-units likely have more upgraded “frilly” features for an open market that may not all be needed when constructing more utilitarian affordable housing;
• the developer incurs sales fees to bring a condo to the marketplace, whereas a city-owned and operated micro-living unit wouldn’t need to pay sales/marketing costs;
• the developer is a corporation that needs to make a profit


Making some logical conclusions, if a private developer can build and sell micro-units for $110,000 each, I’m confident that the City of Guelph could create the same unit for no more than $60,000 to $80,000 each. Debenture financing (like a residential mortgage) to fund the construction of an 80-100 unit apartment (assuming 3% financing over 25 years payment period) could cost in the range of $330/month per unit. Add in $70/month for repairs, management, and upkeep (like a condo fee) and Guelph could offer these affordable micro-units to low-income individuals for $400/month – without requiring any external subsidy funding or tax dollars.


And wouldn’t it be amazing if we could offer these micro-living units at this fantastic price to those most in need?


Conclusion

Obviously, the above example is simplified and doesn’t consider many factors. I may be a real estate broker (in addition to being a city councillor) but I don’t pretend to have all the answers to this complex housing solution. But my ideas above illustrate how Guelph can play a much more active role in pushing a locally made affordable housing agenda.


It’s about leading rather than following ... and I think we can do it!


PS. And for REALLY micro-living, check out the video below about a tiny 78 sq. ft. apartment that rents for an astounding $750/month in New York City!