To hell with this home market

Aaron Urion considers himself lucky. Very lucky. He has a great job as an associate at a downtown Vancouver architectural firm and, last summer, he married his sweetheart and sailing partner, Heather Thompson, 36. These days, the couple enjoy their evenings looking out over the city, the water in the foreground and mountains in the background. On warm nights, Aaron, 38, waves to his neighbours before getting a glass of sparkling water for his wife (she’s expecting their first child this fall). Their biggest dilemma is whether or not to start the BBQ or go for a quick paddle before dinner.

Despite what you might think, Aaron and Heather didn’t saddle themselves with an infamous Vancouver million-dollar mortgage to get these phenomenal harbour views. Nor do they drive 90 minutes each way to Cultus Lake, a Fraser Valley vacationer hot spot. To get this cottage-in-the-city feel, the couple head to North Vancouver’s Mosquito Creek Marina, where they own a custom-built, two-bedroom float home.

Solution No. 1: Skip the land value costs

“You’re right on the water and still only 15 minutes away from downtown Vancouver,” he says, gloating, just a bit. For Aaron and his wife, float home living is a great alternative to buying a condo or stacked townhome. “We didn’t want to be squeezed into a walk-up that had no privacy and would force us to share a wall with a neighbour where we can hear every little noise,” says Aaron. “Better still, we have zero lawn maintenance and we’re still building equity in one of Canada’s most expensive cities.”

Not to be confused with a house boat—which has a motor and can putter around—a float home is a permanent dwelling that’s attached to a dock and connected to a sewer system and hydro. It rests on a concrete barge—the floating equivalent of a crawl-space or concrete slab foundation that can be found under rural or mid-century land-built homes. Older float home barges can last for 100 years or more, while newer ones have lifetime guarantees and both can support anything from the equivalent of a quaint 300-sq-ft condo to a luxurious 3,000-sq-ft, three-level home.

Buying a float home means buying into a tight-knit community, says Aaron. At Mosquito Creek that means BBQ gatherings with a front-row seat to fireworks on Canada Day. But it also means monthly mooring fees, starting at $800, that pay for communal walkways, service hookups and concierge services such as mail drop off and 24-hour security. There are other quirks too: Residents must remember to pay special attention to weight distribution. For instance, if you want to refinish your floors, you can’t simply move all your furniture to one side of the house, or into one room. Do this and your home could tip over and sink.

While virtually all float home residents extol the benefits of falling asleep to the gentle lapping of the water, or spending the day feeding swans and watching otters, one of the biggest draws to float home living is the price tag. In nearby Coal Harbour, the marina in downtown Vancouver, a small one-bedroom float home can be had for $325,000, almost $200,000 less than a similar-sized condo. Even a family-sized float home comes in at more than 20% less (about $150,000) than a landlocked property.

Scroll down to see photos of the Urions’ float home. 

Housing market prices are outrageous

Still, the majority of Canadians opt for more conventional home purchases. As of September last year, the national average price of a two-storey single family detached home increased by 9%, year-over-year, while the national average price of a bungalow rose by 6.5% in the same time period. To put those figures in perspective, if you owned an average single-family home in Toronto your net worth grew by $8,500 each month during the last year, according to the Toronto Real Estate Board. For those looking to buy, the goal post is simply moving faster than they can save. A study published last year by UBC associate professor Paul Kershaw found that it takes roughly 400 weeks of labour—or eight solid years—to purchase the average home in Canada. This is double what it would’ve taken in 1970. In larger cities, like Toronto and Vancouver, it’s worse. A first-time Toronto buyer needs to pinch pennies for 15 years, while Vancouver buyers need to save for 23 years. Kershaw argues that it takes longer because our average annual salaries just haven’t kept up with the astronomical housing prices.

Eye-popping real estate prices, however, are prompting a growing segment of buyers, like Aaron and Heather, to look beyond conventionally built homes. These buyers don’t want to pay a premium to live in a city nor do they want to be tied to 25 years of debt. By saying “To hell with traditional real estate,” these alternative homeowners are proving that you can still own a piece of paradise, even in Canada’s priciest real estate markets.

Solution No. 2: Buy a cottage, instead

Deep in this cash-strapped down payment crunch is exactly where Lindsay Swanson, 38, and Jeff Johns, 45, found themselves several years ago. “We both came out of divorces pretty much financially devastated,” says Lindsay, an account manager currently on maternity leave from KPMG with the couple’s 11-month-old baby boy, Sullivan. “We wanted to buy in Toronto, but just couldn’t afford it.”

So they kept renting their two-bedroom apartment in the city’s Roncesvalles neighbourhood and watched as friends and family scraped enough together to buy into the hot urban market. “Now they’re house-rich and cash-poor,” explains Lindsay. “They bought into the market but can’t take a vacation or even go out for dinner.” These trade-offs weren’t appealing to the gregarious Lindsay, who confesses: “I might sound like a poor little rich girl, but I truly want to enjoy what this city offers.”

So when a family friend asked if the couple was interested in buying an outdated 1960s-built cottage in Tobermory, four hours north of Toronto, Lindsay and Jeff jumped at the opportunity. “Buying out of the city wasn’t our first choice,” says Lindsay. “But we’re not condo people, so this was the next best option.”

As a fixer-upper, the sale price was perfect at $150,000, and with 15% down they could keep their monthly mortgage to less than $800 per month. This, combined with their “very reasonable” rent in Toronto, meant they were able to become property owners. “We still need to be fiscally responsible, but in the meantime we’re creating memories and enjoying the cottage life.” (Jeff, who works for the federal government, frequently takes Mondays and Fridays off, turning their summer break into a series of long weekends up at the lake.)

While Lindsay and Jeff are juggling the routine of city life with the joys of country living, Carle and Laurie Proskin have left the concrete jungle altogether. For Carle, 52, and his wife, Laurie, 41, their decision to retreat from the city came at a time when everything in their life was being re-examined—from budgets, to retirement goals, to how they wanted to raise their two daughters. Sure, they loved their city house, located in the sought-after metro Vancouver neighbourhood of Kitsilano, but the couple couldn’t help but question whether or not things could be different. Days were filled with trying to balance hectic work schedules and family time, all while trying to keep on track with their financial goals and family dreams. “We had all this equity in the home—a home that had increased in value by more than 50% since we’d bought it,” recalls Carle. Faced with this all-too-familiar crunch, Carle and Laurie made a life-changing decision: They sold their downtown Vancouver home and moved into a vacation home they co-owned with two family friends. At first, the Proskins just wanted to get away and regroup, but then the family fell in love with full-time cottage life. “Everyone is happy when they come to Cultus Lake,” says Carle. “Kids can play in the lake, neighbours smile and wave. It’s like Pleasantville,” he says, “a sheltered, manicured community of happy people.” Of the 200 homes only 35 to 40 are full-time residents, but for Carle, this is perfect. Since moving here in 2011, he’s started a successful online business and in the evenings he can saunter down to the lake, rather than spend his time fighting for street parking. “If we’d stayed in the city, there’s a good chance we’d just be squeaking by.”

Scroll down to see more photos of Lindsay and Jeff’s cottage.

Solution No. 3: Get dirty and go off-grid

Talk to Craig and Connie Cook and they would agree: They were just “squeaking by.” A decade ago, the married elementary school custodians had just entered their 50s, and began crunching the numbers on retirement. They quickly realized that the money from their pensions would barely cover their bills. That didn’t stop this hardworking couple from Tillsonburg, Ont., from finding a fiscally responsible solution.

Today, the Cooks live in a 3,000-sq-ft home in Clear Creek, a community on the northern shores of Lake Erie. It’s more than three times as large as their last home. But this isn’t your typical Southern Ontario red brick farm house. They live in an Earthship—the self-sustaining abode and brainchild of U.S. architect and conservationist Michael Reynolds—which was built using old tires, earth and cement parge. “I still remember the day a back-door mechanic dropped off more than 400 used tires he’d collected,” says Craig. While tires are extremely flammable, the process of stacking hundreds of tires, then packing the exposed spaces with dirt, before parging the entire structure with cement eliminates the dangerously flammable nature of the material and creates a self-sustaining structure. So, despite having no furnace or A/C, the Cooks’ home maintains an internal temperature of 21 to 23 degrees Celsius, all year round. “It works because it relies on passive solar heating and thermal mass,” says Craig, who says he walks around in shorts and a T-shirt, even when the temperatures are sub-zero outside. The home is so well-regulated, they can grow just about any type of food, even bananas.

Perhaps best of all, the home cost them less than $70,000 to build and generates absolutely no bills. No heating bills. No water bills. Not even an electricity bill. The Cooks installed a system that collects and recycles water and they use solar power for all their electrical needs. “If you’re not afraid to get your hands dirty, you can easily build a 3,000-sq-ft home for less than $100,000,” says Craig. But the costs go up if you pay an Earthship crew to build it for you. Today, there’s a diverse group of Earthship dwellers in Canada. “Some are drawn to living off the grid,” says Craig, “while others are drawn for economic reasons.”

Solution No. 4: Consider alternative building materials

Not everyone has the time, energy, or desire to collect and prep hundreds of used tires (an integral part of Earthship construction). For 38-year-old Jason Rioux, the vice president of Toronto-based energy firm NRStor Inc., building an off-the-grid vacation home at a lower cost had to be a project that wouldn’t consume all of his free time and money. It took 30 months—18 of which were dedicated to just doing research—but he did it.

Nicknamed the Octopod, it’s built from seven recycled shipping containers that branch out from a central hub (the eighth was removed during the design phase to provide a better view). Tucked away in the sought-after Kawartha Lake area of Ontario, it’s an ideal all-season retreat for him, his wife Victoria and their three kids.

“We spent less than $100 a square foot to build a 1,400-sq-ft, self-sufficient home that meets all the building codes,” says the energy expert. Add in the roof and a stamped concrete floor and the build cost was still less than $150,000. In contrast, Jason had previously built a 400-sq-ft log cabin on the property which set him back $40,000—not including electricity, plumbing and finishes, items that would easily push the cabin’s build cost to $200 or $250 a square foot. “I have a real-world comparison that shows me that building a self-sufficient home doesn’t have to be expensive.”

Yet, like many alternative homeowners, Jason’s biggest hurdle was money. “We had to finance the build ourselves,” he explains. “It was only after it was built and an appraiser could see it that we were able to get insurance and, if we wanted, a mortgage.” But Jason didn’t go to all this trouble to make money. He built his custom vacation retreat so his family could enjoy Canadian cottage life without a 25-year debt sentence.

Scroll down to see photos of Rioux’s Octopod.

Solution No. 5: Or just go nomad

For a few, however, the ultimate alternative to the crazy housing market is no home at all. It’s what Danielle Chabassol, 33, and Mat Dube, 39, realized only after they’d scrounged enough together to put a down payment on a four-bedroom home in Gatineau, Que. The purchase came just a few months after Mat had recovered from a near-fatal car accident and, as Danielle recalls it they, “wanted more security and to invest in our future.” To make it work, they agreed to a 35-year mortgage. (In July 2012, the federal government lowered the maximum insurable mortgage to 25 years). “We were kind of overextended and always worried that interest rates would go up,” she says. But the real clincher was knowing that they might have to wait 35 years, until the mortgage was paid off, to do what they really wanted to do, which was to travel.

Four years later, Danielle and Mat have sold their home and now split their time between living in a camper van and house-sitting during the colder months. “We drastically downsized our life,” explains Mat, “and we’ve become extreme budgeters.” The couple says their monthly expenses were about $4,500 a month when they lived in their home in Gatineau. Now, if they’re really pushing it, they spend as little as $1,500 per month. “We could spend less, but we choose to buy organic food,” says Danielle.

Danielle and Mat know they are living in an extreme way. Their Gulf Stream van, which they bought for $5,000, has been retrofitted to carry the bare necessities. To access their kitchen, they must park, open up a side door and unfold a shelf they’ve bolted to the door. Their fridge is medium-sized cooler; their cooktop a single-burner camping stove. At night they retire to a futon with a hand-built wooden frame (to better fit the van). To get work done while on the road—Danielle and Mat now run an alternative housing blog called Exploring Alternatives and post weekly videos to YouTube—the couple invested in a mobile hot spot and spent $1,500 to install a 300-watt rooftop solar panel system. “We’re not trying to sell this way of life,” Danielle says. “It definitely has its challenges.” But, for now, the couple is quite happy living and working as nomads.

Still, it doesn’t mean Danielle and Mat haven’t discussed settling down again. “We believe real estate is a good investment,” Danielle says. “We just don’t like the decades of debt.” As a result, the two already know they’ll end up bypassing the traditional home purchase. “We’ve seen it all from a community of tiny homes in northern Quebec, to yurt-living in B.C., to van-dwellers and Earthships. What we’ve learned is that in each case these people seem to be living in a more financially sustainable way because they aren’t tied to a big house or big mortgage.” While the couple still haven’t settled on the right solution for them, they know that whatever they choose it won’t come attached with a generation of debt.

See Danielle and Mat’s camper van in the gallery below.

Gallery: Not your typical homeowner