Squamish Townhouse Showdown: How One Couple’s Court Challenge Failed—and Why It Matters for B.C.

A Townhouse Battle, A Province Watching

In the rapidly densifying communities of British Columbia, where single-family homes once reigned supreme, the very definition of neighborhoods is shifting. Squamish—a picturesque town caught between urban pressures and rugged wilderness—is ground zero for this conflict, illustrated starkly by one recent court battle.

In 2025, a couple attempted to halt construction of a modest four-unit townhouse project on their neighbor’s property. Citing an obscure "building scheme" from 1959 that mandated only single-family homes, they launched a legal challenge aiming to preserve their neighborhood’s traditional character.

But their case wasn’t just dismissed—it was dismissed emphatically. Justice Catherine Steele of the B.C. Supreme Court labeled their concerns “overblown” and effectively set a precedent: in the battle between outdated covenants and contemporary densification, the past might no longer hold sway.

This investigative deep dive explores why one Squamish townhouse project has implications far beyond its property lines, touching on legal precedents, community tensions, housing affordability, and the uncertain future of restrictive covenants in B.C.

A Dispute Decades in the Making

To understand this legal showdown, it’s essential to grasp the role of “building schemes”—essentially restrictive covenants placed on property titles decades ago to ensure consistent neighborhood development.

In this Squamish neighborhood, the 1959 building scheme mandated single-family homes only, reflecting mid-century values emphasizing suburban uniformity and lower density. The covenant was a promise, embedded into land titles, that neighborhoods would remain single-family, quiet, predictable, and unchanging.

Fast-forward 66 years to 2025: Squamish, once a quiet logging town, has rapidly transformed into a bustling commuter community. Townhouses, duplexes, and mid-density housing developments are becoming commonplace. But the aging covenants remain, creating tensions between historical promises and contemporary housing needs.

This tension culminated dramatically on one quiet residential street when a neighboring property owner announced plans to construct a modest four-unit townhouse—a project compliant with modern zoning but prohibited by the 1959 covenant.

The Legal Challenge—One Couple’s Resistance

When homeowners David and Elise Thompson heard about the proposed townhomes next door, they were stunned. They’d bought their home precisely because of the quiet, single-family character of their street. To them, the townhouse project didn’t merely threaten their views—it threatened the integrity of their neighborhood.

Leveraging the old covenant, the Thompsons filed suit to block construction, asserting that the 1959 building scheme legally forbade multi-family structures. Their claim wasn’t frivolous—previous B.C. courts had sometimes sided with homeowners on similar covenants, especially when explicitly restrictive language was present.

But from the outset, their case faced significant challenges. The political and judicial landscape had shifted drastically since the covenant was first registered. Urban densification had become official policy province-wide, significantly influencing court interpretations of property law.

Inside the Courtroom—Why the Judge Said “No”

Justice Catherine Steele delivered her ruling in blunt, unequivocal language rarely seen in such disputes. She described the Thompsons’ claims that townhomes would radically harm their neighborhood as “overblown and unsupported.”

The judge’s ruling hinged on two crucial arguments:

First, Steele argued the original intent behind the 1959 covenant was no longer enforceable in modern times. With Squamish growing and evolving dramatically since the covenant’s inception, its enforcement now actively contradicted broader public policies emphasizing housing affordability, densification, and urban planning flexibility.

Second, she emphasized the relative modesty of the proposed project: four townhomes, rather than a sprawling apartment block. The court explicitly rejected claims the townhouses would materially damage neighborhood character or homeowner property values, pointing out similar multi-unit buildings nearby.

Her ruling sent a clear signal: restrictive covenants must evolve or fade into obsolescence when they clash with today’s housing realities.

Precedent-Setting Impact—Why Developers Celebrated

The Squamish ruling resonated far beyond the town itself, capturing immediate attention from property developers across B.C.

Historically, restrictive covenants represented substantial legal and financial risks for developers. Projects frequently stalled or collapsed due to legal challenges from neighbors wielding covenants as powerful vetoes. Even minor developments could spend years mired in costly litigation.

Justice Steele’s ruling signaled a seismic shift: if restrictive covenants could be so quickly dismissed as obsolete in court, developers suddenly had a clear judicial path to push projects forward—even in neighborhoods historically resistant to density.

A leading Vancouver property lawyer summarized the impact succinctly:

“This ruling isn’t just good news for one developer in Squamish—it’s transformative. It sets a precedent allowing future courts to swiftly sideline restrictive covenants when they conflict with contemporary densification.”

Homeowners React—Fear, Frustration, and Powerlessness

On the other side, homeowners across Squamish—and throughout B.C.—expressed anxiety and anger over the ruling. Many had specifically purchased homes based on neighborhood covenants, believing these agreements provided permanent protections against densification and property devaluation.

“This isn’t just disappointing; it’s terrifying,” said one Squamish homeowner whose neighborhood faced similar townhouse proposals. “Our protections are being stripped away. What stops developers from overrunning every community now?”

These homeowners feel betrayed, not just by developers but by the courts. They believed property covenants were legally sacrosanct and binding. Suddenly, they discovered covenants may be legally fragile, dependent on shifting judicial and political interpretations.

Political Context—Provincial Pressure for Densification

The Squamish ruling didn’t occur in isolation—it reflects broader provincial housing priorities. Premier David Eby’s government has relentlessly pushed for increased housing supply, higher densities, and expedited municipal approval processes.

This intense political climate influenced court interpretations. Judges, aware of provincial policies, have become more reluctant to enforce outdated covenants blocking densification. Many legal observers suggest the judiciary’s shifting stance reflects a conscious alignment with the provincial policy agenda.

Indeed, Squamish municipal leaders privately expressed relief over the court’s decision, acknowledging political pressure from Victoria to quickly increase housing availability.

Are Covenants Obsolete?—A Legal and Ethical Debate

Justice Steele’s ruling ignited vigorous legal and ethical debates over restrictive covenants’ role in modern urban planning. Are these century-old agreements fundamentally incompatible with contemporary housing realities?

Urban planners increasingly argue yes. Covenants—originating from exclusionary practices—often represent outdated visions of single-family suburban exclusivity incompatible with dense, affordable, modern urban centers.

Yet property-rights advocates argue covenants still have value, preserving homeowners’ investment-backed expectations, neighborhood stability, and character. Courts, they claim, should uphold these covenants as critical legal agreements rather than discard them in response to transient political pressures.

Squamish at the Crossroads—Community Tensions Rise

In Squamish itself, the ruling triggered intense local debates about growth, density, and community identity. Historically single-family neighborhoods are now uncertain about their futures—will they face increasing density, accelerated townhouse construction, or even mid-rise developments?

Local council meetings overflow with concerned citizens, passionate advocates on both sides, and heated arguments reflecting deeper anxieties around affordability, development, and demographic shifts reshaping Squamish.

Affordability—Does Densification Truly Help?

Pro-density advocates celebrate the ruling as a victory for affordability, arguing increased townhouse availability inevitably reduces housing prices. But skeptics note new townhomes often target higher-income buyers or investors, not ordinary working families seeking genuinely affordable options.

Moreover, accelerated densification can trigger land speculation, ironically driving land prices—and housing costs—even higher.

While densification might theoretically ease supply constraints, critics argue it doesn’t necessarily deliver true affordability for most families.

The Future of Covenants in B.C.—A Precarious Road Ahead

Ultimately, the Squamish ruling highlights restrictive covenants’ uncertain future across British Columbia. Once powerful tools protecting homeowner interests, covenants now appear increasingly vulnerable amid housing crises, political priorities, and shifting judicial perspectives.

Homeowners relying on covenants must reassess their protections. Developers now have newfound leverage to push densification faster and farther, confident courts will prioritize contemporary needs over historical promises.

B.C.’s communities stand at a crossroads: Can neighborhoods balance historical character with contemporary demands? Or will rapid densification render covenants—and homeowner objections—powerless?

The answer, after Squamish’s landmark court decision, seems increasingly clear: The past no longer holds a veto over the future.

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