SURREY — As Surrey's seemingly insatiable hunger for more space spreads sprawling suburban subdivisions south toward White Rock and east into Cloverdale, some developers are headed in the opposite direction.
Two new residential towers in downtown Surrey will offer "micro" suites to people who value urban amenities over the luxury of space. One development in particular, which is located a block from city hall, will feature a 316-square-foot "studio" suite for less than six figures.
"I would say that we're not sacrificing space, we're maximizing space," explains Kiran Rai, marketing director for Evolve condominiums on 104th Avenue near University Drive. "Because even if you do look at a larger home there's a lot of spaces inside a home that go unused - for instance, a formal living room, a formal dining room."
The 36-storey, 406-suite building slated to open in early 2018 is part of West Village, a master plan community being developed by WestStone Property Group. The building will feature one and two bedrooms, executive suites and penthouses, but it is the $93,900 sticker price on their studio suites that is really turning heads.
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Rai said 2,000 people have turned up to their showroom looking at the suites in the past two weeks. The showroom uses state-of-the art augmented reality technology to entice young buyers. Standing in front of large screens, prospective buyers can look at 3D computer renderings of floor plans to get an idea of exactly what these micro suites actually look like.
"It's hard to read a floor plan for a lot of buyers, especially during presale because you don't get to have the experience where you walk around the space and get a feel for it," says Rai.
Evolve also offers an app which allows people to view a 360 degree panorama of the suites on their iPhone, iPad or Google Android device.
The physical showroom also has a television screen which shows the vista from each aspect of the tower and what the sunrise and sunset would look like based on that view.
"The reaction's been really positive and people are really having fun with it, which is what we wanted as well. It's neat, they can see the potential in it and they can see how it will change homebuying as well. I guess we're the first to do it."
Although Evolve has the most attractive price point, there's already competition in Surrey's micro suite market. Reliance Properties announced last week a new 37-storey, 372-unit tower at Surrey Civic Plaza called "Prime on the Plaza."
With micro lofts starting from $139,900 and corner two-bedroom units from $329,900, Reliance is counting on the location winning over the hearts and minds of young buyers.
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Reliance has had historical success in the micro loft market, having purchased and refurbished a Downtown Eastside hotel in 2011 and then rented out suites as tiny as 265-square-feet within a week using nothing more than Craigslist. Then in 2012, Reliance took another old hotel in downtown Victoria and created more than 100 micro units ranging in price from $120,000 to $200,000.
"Young people just love them, either to rent or to buy, because it lets them get into the market," says Jon Stovell, president of Reliance. "It's trading space for place. It's having all the stuff outside the four walls that makes up your lifestyle."
Stovell says the location was chosen as an "energy centre" with the large transit node of buses and SkyTrain surrounded by strong growth in shopping, education, medical services and employment opportunities.
"Now you've got a cultural hub developing there with the city hall, with the library, with the coming arts centre and the rec centre getting redone. So it's just a real epicentre of energy and interest."
With KPU moving into 3 Civic Plaza by Central City and Simon Fraser University (SFU) expected to expand as well, Stovell says it attracts young buyers and renters to the area. And with the recent Bank of Canada cut to the prime lending rate, the Bank of Mom and Dad are more willing to help their children with a down payment of between $10,000 and $20,000.
"Surrey's been very forward looking in wanting to bring population and life and activity into Central City and they've done a great job," says Stovell.
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Despite Reliance's success in refurbishing Vancouver's older buildings, there's actually a bylaw preventing any new construction from having units smaller in size than 398-square-feet.
Stovell says it's "really surprising" that Vancouver is resisting micro suites, given the affordability crisis in the city.
Gordon Price, director of The City Program at SFU and six-term councillor in Vancouver, says the bylaw likely has to do with previous fears about overdeveloping density and creating a "Third World city."
"That was some of the thinking back in the '90s," recalls Price. "'Oh my God, they're turning us into Hong Kong.'" Price actually decided to live in a 300-square-foot micro suite in Vancouver for a month back in the early '90s as an experiment. He says he discovered that with the right design, proper nearby amenities and ample window light, micro suites are highly livable.
"As North Americans we're used to having a separate room for each function... but so
long as it's well designed and you don't have a lot of stuff, as a consequence I thought the room was, in some ways, better than my place in the west end."
The key to success for micro suites is to be close to "synergistic" services, such as restaurants, gyms, social gatherings and ample public transit. Although Price noted that an entire development comprised entirely of micro suites would likely not make money, including them in Surrey's new towers offers broader choice for buyers.
"But that's the idea. You're offering people as much housing choice so you can at least get into the market."
Surrey's housing market at times seems to be pulling in different directions. As Price puts it, the post-war suburban landscape from "Leave it to Beaver land" continues
to sprawl into former agricultural lands underserved by transit, while downtown densifies by building along the existing transit corridors.
Rai says Evolve's location close to Surrey Central SkyTrain station offers commuters a 30 minute ride to downtown Vancouver.
"If you want to get into the market but you don't want to drive into Vancouver every day, you can hop on the train," she says, adding their location will attract people who can't afford to live in downtown Vancouver but still want to remain connected to urban amenities.
"More times than not we'll hear how expensive Metro Vancouver is. I know, for myself, people have always told me, 'you're in a generation of renters.' But with a price like this, you can definitely afford to get into the real estate market."
Stovell says having amenities in the building is also "critical" for micro suites, putting more value into the footprint.
"It really goes with the value system of millenials, it goes with the environmental movement," he says. "And people want to have more choice about how they spend their money and they want to be less 'house poor.'" The Generation Y-ers want to have a more flexible lifestyle to move and travel and socialize, explains Stovell.
Another selling point of micro suites is pointing out how people have a shrinking need for space because of technological miniaturization.
"You think about your stereo system, it's in your pocket now. Your TV is a flat screen on the wall the size of a painting. Your computer is not a PC in a nook anymore with a printer, it's a Macbook Air sitting on your lap while you're on the sofa."
Stovell says their design team has to work hard to maximize the living environment while including all the standard appliances of dishwasher, clothes washer and dryer, oven, microwave, and built-in wall beds. Reliance is even throwing in extras such as flatscreen televisions as standard with their suites.
With all the talk about the relative affordability of micro suites, Price notes it's important not to confuse them with government subsidized "affordable housing."
"The one the government addresses is the non-market housing component. That is either people for whom government subsidy is accepted because they're out of the market, otherwise they're homeless," he says.
The market that micro suite developers are trying to reach is the lower-middle income renter who have been dropped from the market due to housing scarcity. Price says the political challenge of governmentled affordable housing is that it threatens to lower the values of existing stock.
Housing prices rise within the "commuter shed" where homes are located within 40 minutes of a workplace. Once a city has developed beyond that distance the debate begins on density, neighbourhood plans and what to do with the existing housing stock, explains Price.
Micro suites have been seen popping up in other cities that can no longer build outward, such as New York, Tokyo and Toronto.
"Fortunately, the argument goes that that actually produces a better city," notes Price. "It allows more development to occur, it's more walkable, it's supportive of transit."