Our Process For Turning One Lot Into Three Lots

Let us share with you our recent success of being approved by the City of St.Catharines to add 2 additional residential lots to an existing single family lot, with the potential to add 5 additional housing units within walking distance to a GO train station with daily service to Toronto.

Unfortunately the successful outcome of this approval was not a straight line. There were numerous stages to the process, and as a matter of fact, it ended up being perhaps the longest it could have been in a residential infill development application. So let us share with you what our steps were.

We’re going to just summarize it here, but if you’re interested in learning more about this project, and others we have or are currently working on, come to our site tour on Sunday February 23rd at 10am to our newly completed semi-detached homes in Hamilton. To sign up for that, head over to www.InfillDevelopments.com/sitetour and sign up! We’ll be sharing lessons learned from this project and others so that you can take advantage of similar opportunities with the benefit of some of our experience.

BACKGROUND OF THIS PROJECT:

Existing Property: Large single family corner lot sized 70’ x 105’ with an existing 1000 SF bungalow on a crawl space.

Proposed Property: 2 additional lots (3 in total), with semi-detached home with second suite in each (and possibly a second suite on existing house - bringing it from 1 housing unit to possibly 6 in total).

Sometimes you have to be creative for the best design. One of our new lots is an L shape.

You may be aware that doing a severance to a property is not “by-right” (meaning it is not something you can do without special permission from the city). You have to apply for minor variances and consent applications to do a land severance. 

However, we had to first comply with the design requirements of the city’s Design Review Panel, which is a new part of the development process in St.Catharines. 

Unfortunately we failed our first attempt, and had to go back to the drawing board to do a re-design. This came at a cost of both time and money. When we finally redesigned the project to their satisfaction, we were okay to move to the next step, which are the minor variances and consent applications for land severance at the Committee of Adjustments hearing.

At our Committee of Adjustments hearing months later, they ultimately rejected our application 3 votes NO and 2 votes YES. 

That was a BIG blow to us!

After some analysis, we decided to appeal the decision by escalating to the LPAT (Local Planning Appeal Tribunal), because we felt strongly that this was a very positive contribution to the city as well as being potetially a very profitable project. 

After months of waiting, we finally got our appeal hearing, where we had the help of legal council to show clear evidence on the benefits of this project.

Long story short, we’re happy to announce that we were recently notified that we got approval to move forward with the project. 

So now the fun begins! 

We’re currently looking at construction options to determine if it may be worthwhile to use a prefab approach or onsite construction.

We’re currently looking at construction options to determine if it may be worthwhile to use a prefab approach or onsite construction.

These properties are located within a 15 minute walk to the GO Train station, which now provides daily service to Union station in downtown Toronto. This project will definitely help to provide additional affordable housing units in a growing city with convenient transit access to the economic center of Canada as well, and should prove to be another profitable infill development project. 

The lesson here is that any success in infill development, or real estate in general is not a straight line. There are bumps along the way, and you don’t alway succeed. But if you keep pushing, you will win more than you lose, which is what you’re after in the long run.

Additionally there were a number of lessons we learned ourselves here that if we had known, would have done things a bit differently, and want to share that with you in our site four or our In-Depth Infill Development Training Course.

If you’re interested in learning more about this and other infill development, make sure to download our FREE guide at www.InfillDevelopments.com and sign up for our upcoming site tour at www.InfillDevelopments.com/sitetour.

The True Cost Of Homebuilding - It's Not What You Think

The question we get asked most often related to our development projects is “How much does it cost to build per square foot”. This is a tough question because if we’re being frank, the answer is $100-$400 per square foot. 

We never actually say this, because:

1. It’s not helpful for anyone

2. We would sound like jerks

The reason most people would like to know the cost per square foot is because it’s always fun to do a “back of the napkin” analysis, where you plug in the cost of a property, the cost to build based on house size and SF price, and boom! There’s your profit. 

Maybe we’re being a wee bit facetious here, but it’s not far off.

The answer we actually give is “it depends.” And boy, does it depend.

So here are a few things that an investor needs to consider before plugging in a square foot build cost.

1. Are you hiring a builder or are YOU the builder? And if you’re the builder, what value are you adding for your time and energy?

2. The size of property. All things being equal, a 3000 SF home will have a lower per/SF cost than a 2000 SF home because of certain fixed cost.

3. How many units are you building? This is similar to point 2. 10 units should have lower per unit costs than 2 units.

4. What’s your relationship with trades and suppliers? 

5. What are labour and material costs in the city you’re building in?

6. What is the quality of the build? There are usually varying degrees of quality depending on who your target market is.

7. What season are you building in? Winter construction will cost more.

8. And are you just concerned about “hard costs” (i.e. cost of materials and labour for construction), or are you considering “soft costs” before construction begins (i.e. planners, surveyors, house designer/architect, application fees, parkland fees, demolition, legal, engineering, development charges, building permits, and additional miscellaneous fees.

To give you an idea of these “soft costs”, here are some rough numbers for our recent Semi detached development in St.Catharines with legal second suites (4 units in total).

• Planner: $10,000 (Typically $5,000-$7,000)

• Surveyor: $6,000

• House Designer - Stage 1: $2,000 (Basic Layout and Elevations)

• Application Fees (Lot severance): $11,000 (Typically $3,000-$5,000)

• Parkland Dedication: $10,000 (5% of New Lot Value)

• Demolition: $5,000

• Legal: $2,000

• Engineer: $5,000

• House Designer - Stage 2: $5,000

• Development Charges: $15,000 (this can vary wildly depending on the city)

• Building Permit Fees: $4,000 (Based on Sq Ft)

The numbers for your potential project will definitely be different.

So there you have it. The right answer to what the SF price is it depends, and it would be best for any serious investor to do an analysis on all the items mentioned above before trying to determine actual costs to build a home.

The purpose is not to scare you away from development, but rather to encourage you to be realistic. 

The opportunities are out there, but you have to budget accordingly, and you can be on your way to being an infill developer and profiting!

What Is Infill Development & "The Missing Middle"?

You may know that our website is InfillDevelopments.com, and “infill developments” is what we do.

But do you know really understand what “infill” entails? Let’s take this opportunity to explain it clearly just in case.

Even though the term may seem self-explanatory, there’s really quite a bit to it.

Let’s start with Wikipedia’s definition:

"Infill is the urban planning term for the rededication of land in an urban environment, usually open-space, to new construction." It goes on to say that "Infill has been promoted as an economical use of existing infrastructure and a remedy for urban sprawl."

We feel this is a pretty accurate description, but want to add that it typically involves the development of vacant or underutilized parcels of land within the existing urban areas. Essentially we are “filling the gaps”.

So how did we get here, and why do we think this is a good opportunity for you and us to take advantage of? 

To explain that, we’ll have to get a bit macro.

In North America, urbanization is happening fast. Limited supply of new construction, along with soaring population growth is resulting in extreme unaffordability and a continued rise in property values.

At the same time, governments are facing massive economic and environmental challenges with urban sprawl, and realizes that this type of development is unsustainable in the long term. As a result, many are creating rules which makes intensification a mandate across many cities.

This means the government is encouraging development within the existing infrastructure. 

Most traditional home construction falls at two ends of the spectrum. On one end, you have low-rise single family homes, and on the other end you have mid and high rise condo apartments. 

Unless you’re already a big developer or have deep pockets, it’s unlikely you will be able to do either. 

However, as a smaller investor, you can get involved in a certain type of infill development known as “the missing middle”. This is what we’re mostly involved in, which includes housing such as duplexes, triplexes, townhouses, and even mixed use live/work type spaces.

We need to build more of the “missing middle”

These are the types of development projects that many smaller investors can get venture into.

In addition to the potential for profitability, these projects also contribute to the community in many ways, including providing:

• Efficient use of land and infrastructure

• Increased affordability due to an increased supply of housing

• A diversity of housing options to meet different demographics of people

• Increased vibrancy to an otherwise dilapidated neighbourhood

So that’s a quick explanation of what infill development is. 

We truly feel that infill developments can benefit the community and also be profitable, and encourage you to take the following steps;

1. Find a city you love and want to help improve;

2. Get to know the rules and development costs for that city;

3. Build local professional contacts that can help you (i.e. planners, architects, engineers, surveyors, builders, contractors, etc.); and lastly

4. Find the right property to develop!

We hope to provide more content for you that you can use to get started on this journey as well!