The concept of “Home” has always been associated with connections to family and friends along with emotional and physical wellbeing. Ownership has historically been important to those who want a “stable” lifestyle. The reality of our present day fast-paced, unpredictable, information-based economy, has forced us to re-evaluate these ideas and prepare for the future.
As residential experts NORR prides itself in understanding these values and trends, and is “future proofing” design to respond accordingly.
What are the driving forces behind these values and trends in the idea of “Home”?
Purchase or Rent?
Today the question asked is “should I purchase or should I rent?” Let’s look at the positives and negatives of each.
Purchasing a Home +/-
Home equity is the difference in the market value of your home and how much you owe. If the market value of your home is increasing, you are building equity. In the correct market with steady growth this is still the most compelling reason to purchase versus rent.
Owning a house is a huge investment and there is always a chance you may sell your house later for a profit. But there are also significant tax benefits to owning your own home. Interest payments, maintenance and rental income are often tax deductible. In addition, you are allowed to avoid capital gains when selling if the home is your principal residence.
+Mortgage Payments may be lower than Rent
In some fast growing cities, the monthly mortgage payment may be lower than the rental payment or, at least, equal.
+Improving your Home
Owning a house gives you the freedom to customize it to your liking.
-Lack of Flexibility
When you take a mortgage for a house, you’re stuck for a long time. Mortgage rates also fluctuate causing financial stress and unpredictability.
-Paying Property Taxes
As a homeowner, you are obligated to pay property taxes. Property taxes vary wildly between municipalities and are controlled by elected officials.
-Home Repairs, Maintenance or Condo Management Fees
You pay for all the work and materials keeping your house in good repair whether you are part of a Condominium or in a single family home.
Renting a Home+/-
+No mortgage debt.
Mortgages take a long time to pay off. Not having debt allows financial freedom.
+You can move anytime (depending on your lease).
Whether for a career move, or lifestyle change, renting a home typically makes relocation a less stressful exercise.
+Live in a Neighborhood you cannot afford to purchase in.
We all love living in a great local community, but most of the time these locations have a high price tag. Renting an apartment can provide the opportunity to become a part of that community.
+No maintenance and repairs.
Your landlord is technically responsible for all standard maintenance and repairs.
-No return on investment.
You are not building equity; therefore, your rent is a loss of investment.
-The lease rules must be followed.
Restrictions may exist regarding changes to the property, which results in a loss of freedom in a rental situation.
Trends or Values?
Studies show a general trend to rental across North America. Boomers often argue this is a characteristic of our younger millennial generation yet the facts suggest otherwise. The rental market has been the highest proportion of the home market since 1965, however only 32% of renters agree that renting is a matter of choice. Sixty-five per cent claim that they rent due to the life circumstances and financial issues.
Perhaps the desire to own a Home has never been more important or more elusive for all generations? Maybe the “Value of Home” will always be an eternal truth? The real fact is that people are having difficulties affording a Home. With a rapidly changing global economy and powerful technological advances the challenge of “Home” becomes a great design problem that needs addressing.
NORR has developed design strategies to address these values and trends.
NORR seeks to:
- Design living spaces and floor plans that are proportionally correct but highly efficient (85-90% net to gross buildable area).
- Understand the math of development (net to gross, parking ratios, unit ratios, rate of return, construction cost).
- Integrate flexibility into building floor plans, unit types, options and styles to allow maximum flexibility of choice for various consumer lifestyles (bang for their buck).
- Promote multi-purpose development wherever possible to encourage sound urban design. (can I walk to the store?).
- Integrate “beauty” into the physical appearance of our projects to promote “pride of ownership” whether rental or condominium (variety and identity).
- Design for durability to address maintenance costs (it’s got to last).
- Integrate thoughtful amenities into our designs promoting well-being and a sense of place (social interaction).
- Integrate biophilia principals to both indoor and outdoor environments to promote healthy living (landscape design).
- “Future proof” building design to allow for condominium or rental conversion (amenity conversion, storage and parking needs).
- Design large scale “communities” which recognize diversity and encourage inclusivity (room for everyone).
- Embrace technology, and balance cost versus benefit in application (security, communication and convenience).
Residential design is complex, yet extremely rewarding. NORR designs projects through careful analysis of needs and a powerful understanding of the eternal value of “Home”. We apply discipline and diligence in our design decisions and combine them with a love of beauty to produce the best results.