Over the past year, I modeled every eligible R1-1 lot in Vancouver (~60,000 properties) with full pro formas: real construction costs, financing, frontage requirements, DCLs, DCCs, density bonuses, and actual resale comps.
The political narrative: “Tens of thousands of new housing opportunities.”
What the numbers actually show: 98% don’t work financially.
Here’s the breakdown based on comprehensive data analysis of 56,088 R1-1 zoned properties across Vancouver.
Two-thirds of lots are DOA financially
When you run proper Return on Equity (ROE) calculations across all eligible properties:
- 50% → less than 15% ROE, even negative losses (worse than simply selling the property)
- 25% → 15–30% ROE (barely worth the risk and effort)
- 23% → 30–90% ROE (builder-grade deals that work)
- 2% → 100%+ ROE (actual winner properties)
Translation: Only 1 in 50 lots is genuinely worth redeveloping. The rest? Eligible on paper. Uneconomic in reality.
This isn’t speculation—this is based on running full financial models including actual construction costs ($275-350/sqft), real financing terms (7-8% interest rates), city fees, carrying costs, and market-rate resale comparables.
Frontage quietly kills thousands of “opportunities”
Most people celebrating the R1-1 rezoning miss this critical technical constraint:
- 5 units → need 13.4m (44 ft) frontage
- 6 units → need 15.24m (50 ft) frontage
That classic 33-foot Vancouver lot? It maxes out at 4 units—no exceptions.
Here’s the kicker: the jump from 4 → 5 units is where profitability actually starts. One extra unit delivers a massive efficiency gain in construction costs per unit, better financing terms, and significantly improved ROE.
No frontage = no deal, regardless of what the zoning technically permits.
The Net-Zero density bonus changes the math — but fees still hurt
Everyone discussing Vancouver multiplexes knows about the base 1.0 FSR (Floor Space Ratio).
Almost nobody understands the bonus 19% FSR you automatically receive for Net-Zero or Passive House design standards.
That extra density is:
- ✅ Exempt from Density Bonus Contributions (the amenity fees charged above 0.7 FSR)
- ❌ Still subject to DCLs and DCCs on ALL square footage
Here’s why this matters economically: You’re building 19% more sellable space without paying the density bonus contribution. That’s $200-300/sqft saved—a significant margin improvement that can shift a marginal deal into viability.
The catch? City fees like Density Bonus Contributions, Development Cost Levies (DCLs), and Development Cost Charges (DCCs) can still add $400K-$600K+ in total costs—even with the Net-Zero exemption.
The top 12% of lots share these “unicorn traits”
From 60,000+ lots analyzed, only ~14,000 hit the basic viability threshold. Only ~1,500 are true Alpha properties (100%+ ROE).
What they have in common:
| Trait | Why It Matters |
|---|---|
| 4X value creation | $2.5M land → $10M finished product |
| Corner or double-lane access | Better layouts, easier parking configuration |
| 44–50 ft frontage | Unlocks 5–6 units (the profitability threshold) |
| Strong local comps | Fast absorption, premium $/sqft resale prices |
| Clean demo | No heritage designation, no structural surprises |
East side or West side doesn’t determine success. These five traits do.
”My house is worth more as a multiplex” — the dangerous myth
For most homeowners, redeveloping actually destroys value once you factor in:
- $2.7M–$3.9M construction cost (for 5-6 units)
- 18–30 month timeline (construction + permitting)
- Carrying costs + financing (7-8% interest on construction loans)
- City fees totaling $400K-$600K+ (Density Bonus, DCLs, DCCs)
- Construction risk (cost overruns, delays, market changes)
You need ALL of these to make redevelopment work:
- ✅ No mortgage (or very low loan-to-value)
- ✅ Deep cash reserves ($300K+ liquidity)
- ✅ High risk tolerance (construction is unpredictable)
- ✅ Strong local comps (proven demand for multiplexes)
Otherwise: Selling beats building—especially before the January 2026 capital gains inclusion rate jump to 66.67%.
Only 4X wins. Period.
| Land Value | Finished Value | Result |
|---|---|---|
| $2.5M | $10M | ✅ Winner (100%+ ROE) |
| $2.5M | $5M | ❌ Loser (sub-30% ROE) |
The risk/reward equation only works at 4X value creation or higher.
Anything less and you’re better off in an index fund—with zero construction headaches, no permitting delays, and complete liquidity.
The market already shifted — most people just haven’t noticed
2023–2024: Homeowners browsing “4-plex renovation ideas” and attending multiplex webinars
2025: Small developers + private investors buying specifically for 5–6 unit builds with immediate sale upon completion
Multiplexes aren’t big renovations. They’re small-scale development plays requiring development expertise, construction management, and sophisticated financial modeling.
Vancouver didn’t create 60,000 opportunities. It created ~3,000.
Real breakdown of the 60,000 eligible lots:
- ~60,000 eligible lots (zoned R1-1)
- ~14,000 viable (positive ROE after all costs)
- ~3,000 strong deals (50%+ ROE worth the risk)
- ~1,500 investor-grade (100%+ ROE, institutional quality)
The zoning changed. The economics didn’t.
City fees, construction costs, financing terms, and market absorption rates still determine what actually gets built.
One finding I didn’t expect
The highest ROE lots aren’t clustered where most people think.
Not concentrated in Kitsilano. Not all in Dunbar or Point Grey.
The real winner properties are scattered across neighborhoods most investors completely overlook—and there’s a specific street-level pattern involving corner lots, lane access, and local comparable sales that predicts success.
The data shows that certain micro-neighborhoods with the right combination of frontage, access, and strong resale comps dramatically outperform prestigious addresses with poor property geometry.
What this means for homeowners and investors
If you’re a homeowner:
- Don’t assume your property works just because it’s zoned R1-1
- Run a proper pro forma before spending money on architects or engineers
- Compare redevelopment ROE to simply selling (especially before 2026 capital gains changes)
- Factor in ALL costs: construction, fees, financing, carrying costs, risk premium
If you’re an investor:
- Focus on the 12% (the ~7,000 properties with builder-grade economics or better)
- Prioritize frontage (44+ feet to unlock 5-6 units)
- Target 4X value creation minimum (anything less isn’t worth the risk)
- Verify local comps (proven demand for multiplexes in that specific neighborhood)
Methodology and data sources
This analysis is based on:
- 56,088 R1-1 zoned properties across Vancouver
- Full pro forma models for each property including:
- Real construction costs ($275-350/sqft)
- Current financing terms (7-8% construction loans)
- All city fees (DCLs, DCCs, Density Bonus Contributions)
- Actual frontage measurements from city data
- Resale comparables from MLS data
- Net-Zero density bonus calculations (19% FSR exemption)
- ROE calculations factoring in equity requirements, carrying costs, and risk-adjusted returns
The analysis combines construction economics with data science to provide realistic financial projections—not political talking points.
Free lot analysis tool
We’re building a free tool to help property owners see their lot’s real development potential before spending money on consultants.
Enter your address to see:
- Estimated ROE based on your specific lot characteristics
- Maximum units given your frontage and lot dimensions
- Estimated total costs including construction, fees, and financing
- Value creation potential (is it worth redeveloping or better to sell?)
More at vanplex.ca or connect with me on LinkedIn.
Discussion: What ROE ranges are you seeing?
Are you running pro formas on Vancouver R1-1 properties? What ROE ranges are you seeing in your models?
The conversation around multiplex rezoning needs to shift from “how many lots are eligible?” to “how many lots actually pencil?”
The data tells a clear story: eligibility ≠ viability.
About the author: My co-founder (PhD in computer science) and I have been modeling Vancouver multiplex opportunities since Bill 44 passed—combining construction economics with data science. We built a dataset tracking every lot, every sale, every fee structure and exemption to provide realistic financial analysis for developers and homeowners.
