First of all we need to go over the math equation, it is something like this for inner city properties with old houses on them (and particularly really old, end of life homes that are either condemned or close to it). Land Value or purchase price = current property value - asbestos remediation - cost to demolish/permit/financing penalty or premium on raw land deals.
However, the issue of the property next door and its value comes into play as well. Contextual rules dictate making a lot of concessions when designing new housing among old housing. The most damaging is lengthy front setbacks, because to be contextual to these setbacks, the backyard space can be really diminished. this leaves a property with longer front yards than rear yards, far from ideal. In the case of a project I built some years ago, both sides of my site were still ‘littered’ to put it kindly, with the original shacks. These were tiny, cottage style homes (in rough shape too). These homes had no value, the land contained all of the value.
In permitting, my project was pushed back farther than ideal from the street, and other efforts were made to lower the appearance of the units (roofline, massing, etc). I still had nice units to build, but not as easily had these contextual issues not been at play. Fast forwarding to the future, which is now, and one of the neighbouring parcels has been developed. Now they’ve benefitted from being positioned beside a new build, and were able to creep the building significantly forward from where otherwise they’d have been able to. Now my building doesn’t look like it is at the right setback, which I find to be really aggravating. It would have been better for the two new builds to line up a little closer toward the street and had a more cohesive landscape plan.
The lesson here is the city required too many contextual concessions on a street where likelihood of development was very high to the context of the existing houses. We have seen now that the end of life home to the left was gone in a couple years. Why then was there any need to be contextual to this home while it existed?
My perspective is contextual rules should be modified when new, high cost development is proceeding against very old homes of no economic value. The permitting should recognize development pathways that are likely and plan for the future when dealing with massing and setback details. This is particularly acute in RC2 and RCG zones where extremely different massing are required to allow development to proceed.
The photo does not show front setback well, but the new building is quite a bit forward of my building that was constructed a few years ago. The massing is not very consistent either. My building should have been permitted with a broader perspective that more development was coming, and the homes on either side were not going to be there, thus contextually are not relevant to new build permitting.