How To Perform A Site Assessment
Welcome to the Real Estate Espresso podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re talking about the design of a multi-unit building on a property that was originally designed for a single-family home. There are many urban infill opportunities in major cities across North America.
Earlier this week, I was looking at a property for a consulting client that has the potential to be redeveloped from a single-family home to a six-unit apartment building. On today’s show, I’m going to guide you through the thought process on how we would analyze this property to determine its basic feasibility.
There are several aspects to this. From the physical standpoint, the aim is to find out if it is possible to fit a sizable structure on the property in a cost-effective manner. Then there’s the financial point of view, where we analyze all the financial levers in the project. However, we’re not going to talk about the financial aspect today, we’re focusing on the physical aspects of getting a project that conforms with zoning regulations and would still make sense to build.
If you’ve been a regular listener of the show, you’ll know that the availability of parking can be a limiting factor in almost any design. It doesn’t matter whether the city’s rules require fewer parking spaces or not. The fact is clients usually demand it.
The property in question is 150 feet deep and 50 feet wide. So, the first thing we need to look at is whether there’s enough gross floor area within the setbacks of the zoning and the height restriction to comfortably fit six units. Once we establish that the property can support six reasonably sized apartments, the next question will be how much parking you can cost-effectively include.
The location of the property makes it prone to high water due to the proximity of a major river. Although it’s not in a flood zone, it’s not 100% clear that you could build a full basement level for living quarters. Perhaps you could do it for structured underground parking. That’s something that still needs to be determined.
We always start the assessment process with the city’s published zoning code to confirm the rules. This means reading all the fine print. We also need to consider any proposed changes to the zoning legislation. In this case, there are imminent modifications, which means we need to look both forwards and backwards in time to determine the best window in which to consider building.
The original zoning historically only supported two stories. The current zoning supports three stories, and I believe that will be sufficient to accommodate six comfortably-sized units. The front yard setback from the property line is 20 feet and the rear yard setback is 25 feet. With a 150-foot depth, we have 105 feet to place the building between the front and rear setbacks, which is more than enough.
The width of the property is a little more challenging. At 50 feet wide, we have minimum 4-foot side yard setbacks, which means the widest the building could be is 42 feet. If we build according to the minimum setback on the side, we will be obligated to construct expensive, noncombustible sidewalls. So, we’ll likely want to shrink the building further to avoid this requirement.
The reality is a project like this quickly reveals complexities imposed by restrictions and limitations. Whether it’s parking, building design or the zoning legislation, every aspect needs to be thoroughly examined in order to make the right development choices.
Remember that creating a workable and feasible site plan is just the first step. It’s important to then examine in detail the projected costs and revenue in order to determine if the project is worth pursuing. As always, be good stewards of your investments and strive to maximize value in every decision. I wish you an awesome rest of your day, and until next time, go make some great things happen.
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