Restrictive Covenants: A Good way to Prevent Skinny Homes?
Last year the City of Edmonton changed zoning by-laws to allow the sub-division of any residential lot that is at least 50′ wide, with the goal of increasing population density in the centre of the city and reducing urban sprawl. Some people were thrilled by the decision while others… well let’s just say they were less than thrilled.
The Edmonton Journal has reported on a few neighbourhoods where residents are putting restrictive covenants on their properties, to prevent the future subdivision of their lots, and I thought this was an interesting topic to discuss. Restrictive covenants are registered on title, and can make just about any restriction you can think of, such as the type of exterior finishes allowed, or the location of buildings on the lot (a common example is the “setback” from the street). It’s quite common for a developer to create restrictive covenants for an entire subdivision, as a way to maintain the value of the properties by ensuring consistency in the type of roof, the colour of fences or any number of other restrictions. Restrictive covenants are nearly impossible to remove (everyone with the same covenant has to agree).
Any type of restriction can affect the value of your home. In higher end neighbourhoods restrictive covenants are often used to keep values high, since everyone is required to maintain a minimum standard. But, these restrictions can also become a deterrent when the cedar shingle roofs all have to be replaced for somewhere around $40,000.
In this case, residents in certain neighbourhoods are putting restrictive covenants on their titles, to forever forbid the subdivision of their lots. They don’t want “skinny homes” going up in their neighbourhoods, so they’re encouraging all residents to join them in putting the covenants on their properties. In some areas, as many as 80% of residents are expected to “sign up.”
“Skinny homes” are basically two detached houses built on a subdivided lot where one house used to exist. A common example is a 50′ lot, divided into two lots, with one 17′ wide detached house on each lot. In most cases you can actually build larger duplexes on the same lots, but some neighbourhoods only allow detached homes, and many people prefer detached homes to attached homes.
So here’s my question: if you lived in Westbrook, Aspen Gardens, Rio Terrace or any of the other areas where residents are pushing these restrictive covenants, would you agree to put one on your lot?
I wouldn’t. If the majority of the homes in a neighbourhood have a restrictive covenant preventing future sub-division of their own lots, it could bring up the value of the neighbourhood, but it will likely bring up the value of the lots without restrictions even more.
If you were considering buying a skinny home, and you knew the neighbours were unhappy about “skinny homes” in their neighbourhood, would it make you think twice about buying one? I think most of the anger would be directed at the builder, not the buyer, but you never know.
About Sara MacLennan
Sara MacLennan is the Director of Marketing at Liv Real Estate and a licensed Real Estate Associate. The bulk of Sara’s experience and wealth of expertise lies in on-line technology and marketing both for agents and consumers. Sara is the former National Director for Interactive Marketing for Coldwell Banker Canada where she was responsible for an extensive training program traveling to offices across the country training agents and brokers on marketing and technology. Find Sara on Twitter @edmontonblogger.