Multi-Generational Housing: Are You Prepared?

A growing new wave of homeowners is bucking traditional Canadian housing trends, moving away from the dream of a single-family detached house. They’re living multi-generationally in sundry units on the same property. Are you ready for the potential upsurge in business multi-generational housing promises?

According to Statscan, the number of non-single-family homes has risen by 45% in the past 20 years. Increasing property prices that far outstrip the rise in average income have highlighted the growing need to finance wisely.

However, it’s not just about saving money. It’s about staying together.

The above growth in population is largely from immigration - so is the trend. Meaning? Many newcomers bring a rich culture with them that’s lived multi-generationally for thousands of years.

And other Canadians are learning from their new neighbours, joining the multi-generational housing trend. After all, why wouldn’t your clients want their aging parents, grandparents, aunts and uncles safely in the same place as their kids? It’s a win-win. Their hardy 30-something son can shovel the driveway. And they can be available to pick up the granddaughter at 3pm when school’s out but office work is still very much in.

How does all this affect your practice?

Such clients - new or longstanding Canadians - and those they’re sharing a mortgage with will need your oversight and involvement far beyond the initial property purchase.

Consider the intricate financing that multiple mortgagors (the people borrowing) on a single property necessitate. First, how many are there? Next, are they splitting the costs and equity equally?

Down payments are a major stumbling block for younger people, till now shut out of the market. How does capital contribution affect ownership interest among mortgagors? How would divorce affect where each half the split couple lives? If someone dies, what are their plans regarding inheritance? These clients need your help with their wills. Indeed, all these legal questions need your attention.

Then there are the complicated local bylaws. Federal and provincial governments are making housing a priority but can’t build new homes fast enough. So, last year the feds enacted the multi-generational home renovation tax credit. Since January 1, this tax credit of up to $7,500 has been available to “maintain traditions of multiple generations living together - and help more Canadians find a safe, affordable place to call home” announced Justin Trudeau.

The requirements for the credit are not black and white. There are limits and stipulations. So, again, your clients will probably need your help navigating the niceties.

That’s the upper levels of government. In the cities however, where concentrated housing should blossom, politics are often choked by nimbyism - resulting in complex building and zoning issues. Bylaws can vary wildly - not just from city to city but within neighbourhoods and sometimes even on the same street.

Examples? Some municipalities demand that a secondary unit receive its own address, which can affect taxes. Others insist the surface area of the second living space not exceed a percentage of the total. And some cities simply disallow multiple homes on a single property in certain neighbourhoods.

Zoning decisions can range from sensible to seemingly frivolous. Some local laws demand that secondary homes install a firestop. Others insist they feature the same exterior siding. Some secondary homes can legally share heating systems and even other rooms with the primary dwelling.

Assuming your clients successfully navigate the above, they’ll also need your eye on their contracts with builders constructing new units on the property. So, your to-do list continues to lengthen.

The solutions families are creating are as diverse and evolving as a modern Canadian city.