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West End Neighbours continues its pressure on Vision Vancouver

June 16th, 2010 · 44 Comments

In the last election, Non-Partisan Association organizers were dismayed at their reception in the West End during the campaign. “We gave up phoning because there was no point,” said one.

The renters there hated the NPA for not doing more to protect the neighbourhood’s rental buildings, which felt like they were under attack from owners wanting to “renovate” and charge much higher rents.

If the mini-revolt in the West End keeps going, Vision Vancouver could find itself meeting pockets of similar dislike. The ubiquitous West End Neighbors is organizing another protest/rally outside tonight’s VV fundraiser downtown, along with other activities. (Their news release attached below.)

A small note from me: Although this West End group’s efforts to have more input into development decisions is admirable, I have to sigh in despair at the way they stray into misinformation and hyperbole in an over-enthusiastic or perhaps incompletely researched effort to make their case.

Like actors in some Robert Redford drama about nasty developers, they have in the past made accusations that council is allowing certain developments in return for donations from particular developers. As I’ve pointed out before, this might make sense if councillors were getting direct cash in their pockets. But all contributions just going to pay off their giant election-expense bills. It doesn’t make any sense to imagine that even a $10,000 contribution would make a difference in a $2-million election budget and that the entire council would decide to allow a project just to get that.

They also make a reference, in this news release, to the “$16-million tulip tree” — reference to the six storeys that was proposed as compensation for a developer who would have to build around the 107-year-old tree in order to preserve it. As city planners noted, that estimate — the result of poor math on the part of one local writer — was wildly off. The net profit on six storeys was calculated at $4 million and that money would be used for the extra expense of building around the tree.

Finally, a point that opponents to tower projects in the West End keep making is that developers are getting “subsidies” from council to build rental projects. The implication is that they are making a killing on these rentals. As anyone who has studied rental housing for even 30 minutes in this country knows, developers more or less stopped building rental projects in this country in the 1980s when the federal government changed various pieces of tax law. Ever since, city planners and housing advocates have been struggling to figure out ways to encourage developers to get back into the business.

Vision’s Short Term Incentives for Rental — which the WEN group is so opposed to — is the local attempt to provide a solution. Developers do not get cash subsidies. They get given enough density to provide them with the equivalent level of profit they would make by building a condo project. Ironically, traditional housing advocates, who are not usually developers’ big friends, have supported this effort.

Okay, end of my exasperated rant.

(Vancouver, June 16, 2010) The West End will be busy today with a rally about rezoning and development pressures on the community and then “greeters” outside a “Vision Vancouver” fundraiser at the Coast Plaza Hotel. Media are welcome.    

WEST END RALLY AT MAXINE’S (1215 Bidwell Street) When: 4:45 to 5:15 pm, Wednesday, June 16, 2010 Where: Outside 1215 Bidwell Street, near corner of Davie What: Speakers will present the latest info on rezoning and development in the West End and other neighbourhoods in Vancouver. Information will be presented on the status of “Maxine’s” (historic building rezoned in December for a subsidized 20-storey tower, and threatened soon by the wrecking ball); the “No Rezoning without a Comprehensive Plan!” petition now with over 6300 signatures, findings of a citizen’s opinion survey on the future of Maxine’s, and more. Participants will also hear about concerns in other neighbourhoods of Vancouver about major rezonings and proposed developments, many of them under the City’s controversial Short Term Incentives for Rental Housing (STIR) program.  

VISION VANCOUVER FUNDRAISER AT COAST PLAZA HOTEL (1763 Comox St.) Then, after 5:15 pm the group will walk 2 blocks to the Coast Plaza Hotel to greet Mayor Robertson’s guests for Vision Vancouver’s fundraiser (starts at 6 pm), welcome them to the neighbourhood and let them know taxpayers and voters care about Vision Vancouver’s policies major City decisions affecting everyone.   Anyone visiting the West End today is invited to have a look at current rezoning hotspots at 1401 Comox St. (St. John’s Church), 1754 Pendrell St., 1600 Beach Ave. (Beach Towers), 1245 Harwood St. (with the “$16 million tulip tree”), and 1215 Bidwell St. (Maxine’s). Each involves an actual or potential rezoning application that could result in a new residential tower of 18 to 22 storeys. Many citizens are concerned City’s willingness to make site-by-site rezonings that radically override existing community policy plans and zoning guidelines (on height, density, setback and so on) will significantly change their communities, destroy heritage, reduce liveability, and in some cases (under STIR, which essentially subsidizes developers) involve huge costs for all Vancouver taxpayers who pick up the costs.   West End Neighbours (WEN) is a network of residents that has grown to thousands of citizens concerned about the impact of fast-tracked rezoning on liveability in the West End and the implications for all of Vancouver.

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  • Dave

    Oohh Frances

    When ooo when will those rose coloured, Vision impaired glasses come off.

    I notice you neglect to mention the actual square footage of these new rental units, nor the proposed rental rates for them nor the sheer number of units to be crammed into these proposed new developments oo and would they be family oriented?… oh ya the answer be an uncomfortable NO! lets not let some pesky facts get into the way of opinion.

  • Higgins

    “It doesn’t make any sense to imagine that even a $10,000 contribution would make a difference in a $2-million election budget and that the entire council would decide to allow a project just to get that.”
    Frances you said it, hon! Your message is crystal clear and well received by the would be donors. THEY, should start giving more or…more often. Brilliant. Just brilliant. What other fund-raising ideas do you have? I tell you what, next time you have a tête-à-tête with Gregor, suggest to him to toll the new bike lanes on Burrard and Dunsmuir. Could you do that for me? That would be grand!

  • Living in the West End

    And what happens when the developer of a STIR project decides to flip the units to a Pension fund or other investor. Does the City realize any portion of the developers profit? The answer is a big fat NO. The developer just GRINS all the way to the bank. Affordable rents no way just plain hogwash spewing from the lips of the Vision crew.

  • Frances Bula

    @ Living. No, the city doesn’t get any proportion of the developer’s profit, just as they don’t get any proportion of the developer’s profit when the building is a condo that is bought by investors, some of whom then flip the units to others. I don’t get what you’re driving at. Are you saying the city should organize all development in the city so that developers build on a break-even basis only?

  • Frances Bula

    @Dave. Why is it that no one can debate an issue these days without accusing the other party of being some dupe who is too dumb to see the obvious. No, I didn’t talk about the square footage, the rental rates or other issues. What is your point?

    Are you suggesting that these developers are being allowed, through some giveaway from council, to make more than the 15-20 per cent profit they do on for-sale condos, as opposed to for-rent condos? Have you actually tried to work out a pro forma that shows that?

    I haven’t seen one yet from anyone in the West End. So far, it’s been mainly innuendo and suspicions about the big bad developers (who are so different from the Mother Theresa developer who built the unit that you’re currently living in).

    Yes, I’m sure they’re small and the rents are higher than elsewhere. That’s because 1. they’re new, so they can’t charge the low rents that are financially possible in older buildings 2. people who run apartment buildings as a business cannot do what the hundreds of private condo owners who are renting out their units in this city do, which is charge less for rent than the cost of the mortgage and maintenance of a unit in the hopes that they’ll make a profit through speculation, i.e. as real-estate prices rise.

  • Westender

    I’ve been forced into a situation of studying rental housing for more than 30 minutes over the last 8 months or so, and one of the points that keeps coming up is the scale of the incentives necessary to “encourage developers to get back into the business.”
    Developers may not get cash subsidies, but they have costs in rental projects forgiven – and some of these costs, such as Development Cost Levies, will likely translate to higher costs for other taxpayers in the city.
    Because STIR sets no parameters for density bonsuing, the extra density that is proposed in some (not all) of these projects seems NOT to be referenced to any rational analysis, such as the profits that would be made by building a condo project.
    As an example, consider two STIR projects that each propose density increases:
    The developer of 1142 Granville (creation of 106 STIR rental units) was encouraged to “get back into the business” of creating rental housing with a 63% density bonus and effective land costs of $67 per “buildable” square foot of floor area.
    The developer at 1401 Comox Street (creation of 192 STIR rental units) is requesting a 395% density bonus, lowering land costs to $33 per “buildable” square foot of floor area (almost exactly half of the price paid at 1142 Granville).
    So what gives? Is the Granville developer just that much better than the Comox developer? Or is the Comox developer getting a “sweet deal”? Why the massive density bonus at 1401 Comox?

  • Frances Bula

    @Westender. I agree with you completely on the point that there needs to be comparables between STIR projects so that it’s not just a question of which developer makes the best argument for more density. That has been the biggest problem with STIR — there’s no sense of what rules are in place to ensure the same playing field from one project to another. (And, even though you didn’t make this point, I think the community has a really valid argument to make that creating rental housing should not come with a blanket permission to build towers out of scale with the surroundings. I’ve been told by any number of people close to city hall that these STIR projects don’t have to be so big, that you could still get rental units, though fewer, with less density.)

    But I don’t feel as though you’ve given me enough information about Granville and Comox to make a good judgment.

    My immediate thoughts are: 1. It costs the developer money for each rental unit built. Economies of scale reduce the cost in larger buildings, so a larger building would need more density to make the economics work. In spite of the suspicions from West Enders, 15 years of watching developers refuse to build rental has convinced me that there’s no profit in it under current zoning/density/parking framework.

    2. I believe the Comox building is also including a community centre. That also takes density to cover the construction costs.

    3. You don’t say what the existing allowable density was at the Granville and Comox sites. Are they exactly the same? Density bonuses appear different depending on the base they’re bonusing from.

    Yours in continued civilized debate

  • Living in the West End

    Frances, what the City is supposed to get through rezoning is community area contributions to provide amenities for the community. STIR says the developer does not have to pay the City anything. If the developer builds condos they pay the CAC’s and the community gets some benefit. In the Bidwell (Dec. 15, 2009 Council Meeting) rezoning the foregiven CAC’s were calculated at over $ 5 million and the developer (Millenium) in return for building the STIR units gets to sell his condos on level 5-20 all with views. Millenium can sell (flip) the STIR units for a profit and make more on the condos. The community gets nothing back except the 49 shoebox units which the new owner (Pension fund) wants a return based on the price they paid not the much lower price the developer paid to construct the units. The community and voters will remember this in November 2011 particulary when you walk down Davie Street and a 60 high wall blocks the winter sun.

  • Frances Bula

    @Living. Well, that is an issue for city voters to decide. Vision did believe, perhaps mistakenly, that people wanted more rental units in the city that would be owned by long-term owners, not condo investors who might choose to flip them in a real-estate bubble, thereby putting hundreds of renters at risk of eviction.

    It’s also something that housing advocates across the country, who are not particularly Vision adherents, have asked for for a couple of decades. But if voters decide that those rental units aren’t a community benefit, but an imposition on the community, they’ll make their opinions known at the ballot box. But it would help everyone if there was a clearer idea of whether 1. the community doesn’t want rental units at any price the city might be willing to pay or if 2. the community doesn’t want rental units where the city hasn’t made it clear what the long-term guarantee is re rents and where the rental units are in a building form that seems out of character for the neighbourhood.

  • Living in the West End

    The good news is the the conversion of the Coast Plaza on Denman and Pacific Palisades on Robson from hotel to residential rental apartments. With no incentives these owners are going to deliver about 550 new rental units to the West End. The bad news is that Peterson (codeveloper of Comox) is applying to remove about 100 rental units on Alberni to hotel status.

  • Westender

    Hello Frances:
    It is heartening to hear the comment that STIR projects don’t have to be so big…that is not something residents have been hearing.
    The economies of scale argument could be applied such that by reducing the costs in larger buildings there should be LESS need for density bonusing (to buy down land costs), not more. The issue at Comox Street appears to be (in the words of the Urban Design Panel) – “this is a massive building for a small site.”
    I wasn’t suggesting that there be “no” density bonus to encourage the creation of rental – my suggestion is that STIR as originally proposed made no reference to gigantic increases in density that would create buildings out of scale with their surroundings and with negative impacts on neighbouring buildings. In fact the STIR policy notes that STIR projects must be consistent with existing neighbourhood planning.
    With regard to the community centre at the Comox site, this was not part of the original proposal (October 2009), but was only added to the development in a revision around Christmas-time. As the density has not increased on the project since it has been proposed, presumably the project made economic sense without the community space. The space encompasses approximately 3000 square feet of floor area on three levels that was previously formatted as two townhouse units on the site. As far as the neighbourhood has been informed this space is to be offered to “Qmunity” for daytime use and Gordon Neighbourhood House in the evenings. The City has provided little information about the ownership or administration of this space. But to call this a “community centre” would seem generous given its small size and fractured layout on three floors.

    Here’s the stats on the two projects I referenced:

    1142 Granville
    Site area: 8,993 sq. ft.
    Price paid for land: $3.47 million
    FSR under existing zoning: 3.5
    Existing permitted floor area: 31,476 sq. ft.
    Proposed FSR: 5.72
    Unit Count: 106
    Total buildable sq. ft.: 51,439
    Cost of land per sq. ft.: $386
    Cost of land per buildable sq. ft.: $67.46

    Summary: Developer paid $386 per square foot of lot area, or $110 per “buildable” square foot under existing zoning. Developer requested a 63% density bonus to accommodate STIR rental housing, lowering land costs to $67.46 per “buildable” square foot of floor area.

    1401 Comox
    Site area: 17,292 sq. ft.
    Price paid for land: $4.25 million
    FSR under existing zoning: 1.5
    Existing permitted floor area: 25,938 sq. ft.
    Proposed FSR: 7.43
    Unit Count: 192
    Total buildable sq. ft.: 128,494
    Cost of land per sq. ft.: $246
    Cost of land per buildable sq. ft.: $33.07

    Summary: Developer paid $246 per square foot of lot area, or $164 per “buildable” square foot under existing zoning. Developer requested a 395% density bonus to accommodate STIR rental housing, lowering land costs to $33.07 per “buildable” square foot of floor area (almost exactly half of the price paid at 1142 Granville).

  • West Ender

    We live in one of the most beautiful natural settings in the world. Yet every time I drive across Cambie Street into the City I’m faced with an undifferentiated mass of steel, concrete and glass. This continues as I drive along Georgia Street until the Park. A beautiful landscape increasingly hidden to all but the wealthy.

    Now developers say they have “run out of waterfront” so they have turned their sights to the West End. The West End is a mature and tolerant community and highly valued tourist destination. We do not want to turn into Yaletown West or Coal Harbour South. And we have over 6,300 hundred petition signatures saying we want an official development plan built with meaningful consultation before radical rezoning is allowed.

    These proposed STIR projects are not compatible in size and sheer mass with our unique community. They will destroy a heritage site and diminish green space, views of the mountains that everyone shares, sunlight along the streets and increase parking challenges for residents and visitors because of reduced building parking allocations.

    And importantly, these market-rental housing units will not provide relief to low income earners where it is most needed.

    Sometimes the best intentions do not have the desired consequences. In this case, Vision Vancouver has missed the mark and it is time to put it on hold to properly assess the implications before more damage is done.

  • Victor

    Guess the last poster says it all about what the taxpayer is giving to the developers!
    It is time for the City Council to consult the community about what they want and not to just impose a bunch of dense, inappropriate buildings for the West End.
    At least they are holding their fundraiser tonight in a built space that will soon be turned into rentals = 314 units when the developer gets the go ahead. Shouldn’t be a problem after tonight’s event!!

  • D. Volk

    “@Dave. Why is it that no one can debate an issue these days without accusing the other party of being some dupe who is too dumb to see the obvious. No, I didn’t talk about the square footage, the rental rates or other issues. What is your point?”

    Great response!

    “If you ever want to lose faith in humanity read the comments section at the end of any news story on the internet.” – Anonymous

  • Joe Just Joe

    Well said, and so glad you’ve laid the numbers out there. No one has argued that additional rental properties aren’t needed, what people are arguing is that the pie has been sweetened too much. I certainly don’t blame the developers for being attracted to STIR, the blame has to be laid on the pie maker not the pie eater.
    As Frances stated there has been no rental properties built for years, and we are all aware of the reasons why, should we not now be asking why all of a sudden the majority of new projects being proposed are STIR projects? Perhaps it would be wise for the city to rework the numbers for a better balance.

  • West Ender

    STIR had many problems. The West End stands to loose Maxine’s at Bidwell and Davie Street, one of few remaining neighbourhood heritage buildings. A small façade will remain. And to add insult to injury, Bob Rennie who is soon to be recognized by Heritage Vancouver, has chosen to call the new development that will replace Maxine’s “Alexandra English Bay”.

    While it may seem generous to offer space to “Qmunity” for daytime use and Gordon Neighbourhood House in the evenings – in reality, there could be a substantial loss of community and green space if the well loved St. John’s church at 1401 Comox Street is destroyed. It has been a decades old community hub and countless people enjoy the garden in front of the church every day. All of this could be replaced with a massive steel, concrete and glass structure that is completely out of character with the existing neighbourhood.

  • Another West Ender

    I keep seeing the people collecting signatures at Bidwell and Davie and I just don’t get it … these buildings are modern versions of what already exists in the West End. This will sound like I’m trolling, but my biggest problem is that there are too few buildings like this being built in the West End … I would like to see a few dozen more!

  • Frances Bula

    @West Ender. Well, I don’t think the developer is being generous to offer space to Qmunity. That would be a specific amenity-for-density deal, just like the Contemporary Art Gallery in the condo building it’s in, the Vancity Theatre, the new rehearsal space for the Orpheum in the tower going up on Granville, blah blah blah. That’s why I was wondering if the density was higher at Comox — because of that amenity, which would get a specific density bonus on its own.

    Re the church. Excuse me, but the United Church sold that property, unless I’m missing something — that’s why you are losing that church and garden. Unless the city decides to get really radical and start nationalizing (or municipalizing) land that it deems to be necessary for the common good, that kind of thing will continue to happen in Vancouver. If the STIR project doesn’t go ahead, then some other concrete and glass structure with pre-sold condos will take its place. I highly doubt that city planners will keep the FSR at the outdated level of 1 for that property — that’s just a little more than the average single-family house. You may be able to win a part of your battle by getting a tower more at the height of current ones in the West End, but surely you don’t imagine that defeating that STIR project is going to bring back the church and garden.

  • Sarah Isaacs

    The Director of Planning Mr. Toderian told the WEN group a couple of weeks ago that he plans to advise City Council to stop the application of STIR in the West End, although not in the City of Vancouver generally. He also said he doesn’t think new rental is a needed primary public benefit in the West End. Does anyone else wish to comment on this? I almost fell off my chair.

    What more is there to say? If he no longer thinks it’s a good idea (and I’m sure it was difficult for him to arrive at that conclusion), then surely there’s insufficient consensus on the value of this program to support rezoning.

    STIR is a well-intentioned program. Our experience with the real-world application, however, is that it can only be implemented in the West End along with rezoning; the only criterion for lot selection is a spot of open space; and it requires enormous density bonuses in order to be viable. In short, STIR in the West End does not provide the community or the city with sufficient flexibility in its application, which is why community input into each application is just lip service that cannot be accommodated without undermining the feasibility of the project. This would be questionable even if the public benefit was desperately needed, but even Mr. Toderian acknowledges now that it is not.

    It’s really sad to think of Comox and Bidwell, and maybe Beach, as bloopers, made while the city was ironing out this rental incentive program. Despite claims to the contrary, these buildings are not like what’s already in the West End – all towers are not created equally. Every tower in the heart of the West End is surrounded by an abundance of open space (I walked around and counted them!), as that was the style of tower development during the West End boom. The proposed towers at Bidwell and Comox virtually fill the lot, are glass, and will be experienced differently by the ‘man on the street.’ Next time you walk by Imperial Towers notice how far back it sits from the sidewalk – so far back you don’t even notice it. You’ll notice these suckers – they will be bloody massive.

  • Westender

    Frances, note that the “Westender” and “West Ender” are two different people. The City has not defined a particular density bonus in relation to the community space – at least if they have, they have not shared this information with neighbours. And the existing zoning on the site is 1.5 FSR, not 1.0. I don’t think anyone is saying the existing zoning must be frozen in perpetuity….but changing the zoning from 1.5 to 7.4 should probably be based on something other than a developer’s request. That is WEN’s basic position – that zoning changes be based on consultation with the neighbourhood in an organized fashion. Is that too much to ask for a building that will shade the Broughton Street mini-park for 100 years to come?

  • West Ender

    Actually Frances, it is not out of the question to ask the City to convert the church into a community space – it is much needed in the West End.
    The City has been willing to extend it’s largesse to the development community to build market-rental units at the expense of community space and other amenities. Perhaps a shift in priorities would meet community needs at a fraction of the cost.

  • david m

    “And we have over 6,300 hundred petition signatures saying we want an official development plan built with meaningful consultation before radical rezoning is allowed.”

    – fair enough. an updated development plan is something the area could use, rather than the ad-hoc approach now. on the one hand, it’ll serve residents well, on the other, it’ll let developers know what sites to snap up!

    @ sarah isaacs: the crazy setbacks are from another era, and you won’t win many arguments advocating for their return, or opposing a project based on its more efficient lot coverage. back when those were built, vancouver had lots of space, and planning/architecture were in an entirely different galaxy.

  • Booge

    Idle words. What is being done to protect those people who have lived 20-30-40 years in an apartment and are now, that they are at their most vulnerable, being “turfed” out in order that an apartment can be renovated? What in gods name is going on in peoples minds? IF you Mr Developer want to buy a building with the intention of renovating in order to increase rents. This is fine. BUT you cannot force existing tenants out. You cannot as pretext of renovating force long standing tenants to be moved in to smaller units. You should have factored that in to your plans. Land owners have a right to a profit , but not at the expense o senior citizens who have paid rent for over 40 years.
    You Mr Developer should have taken a census of the tenants and worked within the “natural” attrition rate. No forcing people out. In New York this doesn’t happen. In Bologna this doesn’t happen. Vision Vancouver show some balls and protect the older citizens.

  • Frances Bula

    @Westender. Thanks for pointing out the different between you and the other guy. You make a valid point, the one that I think is the strongest point the West End can make, that there is no sense that there is any system in place for granting density and so it’s whatever the developer proposes. The city does get something back for that density, the rental apartments (yes, I do realize not everyone thinks that’s a benefit) but there is still no sense of what the limit is on any site.

  • Frances Bula

    @West Ender. So you think the city should have spent $4.25 million to create a park for your area. I would like to see that put to a general vote of everyone in Vancouver. Do you not think that there are hundreds of other residents in Vancouver who feel the same? To bring up your own argument, the city can’t just add park space willy-nilly in neighbourhoods. There has to be a rational system so that every neighbourhood is treated fairly. I believe the West End is considered fairly park rich in comparison with many other neighbourhoods. If the city were going to spend $4.25 million to buy park space, it should probably be in the Downtown South, which is a denser and far more park-deficient area than the West End.

  • jesse

    Is Vancouver the only city with a lack of purpose-built rentals? No but… isn’t the 600 lb gorilla in the room that house and condo prices are out of whack with rents?

    The solution seems to be what is the most politically unpalatable: get land prices back down to where they support their potential income from rents and STIR is unnecessary. I think other countries have done this through legislation and policy with some success.

  • Sarah Isaacs

    To David M., surely ‘crazy’ setbacks are less of an anachronism, and less of a waste of space, than the huge swaths of single-family residence neighbourhoods that are in walking distance from the city. Those have been retained. Why, then, is retaining the West End form of tower development so crazy?

  • West Ender

    Francis, the St. John’s Church would not be purchased for the park space. It is a large community facility that could continue to serve the West End including Gordon Neighbourhood House and Qmunity. The West End lacks community space. All our facilities are filled to the maximum.

    But instead, City Hall has decided to give away millions of dollars in subsidies to developers in lieu of contributions to needed amenities in the West End.

    We need a plan so we can examine the West End needs and ways to proceed in the future. In the meantime, the City should not rush ahead with the STIR program. Decisions made today will live with our community for the next 60 – 100 years.

  • ThinkOutsideABox

    You can call it a subsidy, a tax credit, an incentive or whatever semantic fits.

    Whether STIR takes the form of government certification that can be monetized at a bank, or the waiving of levies that minimizes a developer’s budget line item, it’s all the the same – I’m fine just calling it what Councillor Raymond Louie did in council back in June ’09: a hand out to their partners the development community.

    STIR took form in response to the financial meltdown which made it more difficult for private condo developers to cashflow at previous pre-sale levels. STIR is primarily ‘make work’ projects for developers to keep busy making buildings and keeping construction crews employed while being used in the West End to override existing zoning and planning policy in local neighbourhoods arbitrarily, to the exclusive benefit of the developers.

    Geoff Meggs, the communications strategist/Vision Vancouver Councillor for now, attempts to suggest that market-rental housing is “affordable” regardless of what the monthly rent is because residents don’t pay a down payment or have to qualify for a mortgage.

    He has further stated “The city has the STIR program to encourage the private sector to do more market-rental housing because we believe it contributes to a more affordable housing stock.”

    Yet the latest CMHC report out now indicates otherwise. I note that rental vacancy rates in Vancouver have ticked up once again, as have rental rates. Meanwhile it’s expected for the real estate market to remain soft the rest of the year.

    When making decisions that severely impact the livability, the expressions of the building form, the character, the amenity cutbacks, and tax shift all residents bear for the developers’ benefit, I expect Council to base their decisions in consultation with the community; and empirical evidence, rather than personal beliefs.

    I also note that Millennium, the developer responsible for the financially troubled Athlete’s Village, and also a STIR recipient for the tower that will demolish Maxine’s, is now being sued by the city of Nanaimo for failure to complete a hotel. The trouble once again, the ability to secure financing. We want this in the West End?

  • Bill McCreery

    The discussion about the City buying St. John’s may have some traction. The existing facility would make an ideal annex for the West End Community Centre. It could be converted inexpensively &, will be needed even more with the addition of Maxine’s + Plaza + whatever happens @ Beach ++. Isn’t that what these LIFT & CACs are supposed to be used for?

    The developer could be informed the Comox development is not appropriate [on the grounds of its excessive density & less than attractive design & this property could be purchased for his purchase price of $4.25M + carrying costs + design fees, etc. + a profit, say +/-$6M.

    Unfortunately no one @ the City is thinking strategically. They, for reasons I am not privy to, decided in December to forgive the LIFT payment to the City [calculated @ $6M] by the developer for the condo portion of the Maxine’s project. I do recall Suzanne Anton strenuously objecting to this @ the time. If they had been thinking comprehensively that money could have indeed been available to be a community benefit to the entire West End community not just one group. Perhaps LIFT & CAC $s from some of the other WE projects will be available to do this.

  • Sarah Isaacs

    I don’t understand why we’re not shocked about what Mr. Toderian said about STIR in the West End. I thought it was extremely surprising.

    I suppose it’s not under discussion because it won’t affect the current proposals: Bidwell, Comox and Beach. Is that why no one else fell off his or her chair?

    Frances, what do you think?

  • Ric

    Frances, thank you for this forum. I live next to 1401 Comox Street so since the rezoning sign went up I have had to educate myself on STIR, development cost charges, land lift, CACs, local governance, etc, which is not necessarily a bad activity for a citizen. What caught my attention was a statement by Councillor Meggs to the effect that the provincial government gave local governments the ability to waive development cost levies for affordable rental housing and of course he is right. The provincial Local Government Act at section 933.1 (Development for which charges may be waived or reduced) of the Local Government Act) sets out four “eligible developments” under which the charges can be waived or reduced, one of which is “for-profit affordable rental housing” and it appears from subsection 933.1(6) that the Vancouver City Council has the authority to delegate the power to waive or reduce a charge to another person which it has done in the form of the City Manager.

    The Local Government Act does not define “affordable” so that is left to the local government. Affordability is subjective so I would expect that local governments would establish objective definitions. For instance, the Greater Vancouver Sewerage and Drainage District Development Cost Charge Bylaw No, 254, 2010 (yes there is such a bylaw) at subsection 3.1(i) defines “for profit affordable rental housing” and I think it is worth noting the comprehensive, objective definition that one part of Vancouver City government uses:

    “For Profit Affordable Rental Housing” means Dwelling Units in a Development comprising Residential Use or Combination Development that will be rented or sublet;
    (i) at below market rental rates so that the Rent charged does not exceed the lesser of:
    (1) 80% of the average market rent for the Member Municipality where the Dwelling Unit is located; or
    (2) 80% of the average market rent for all of the Member Municipalities as identified or reported in Canada Mortgage Housing Corporation’s most recent rental market survey;
    (ii) to persons who have an annual household income that falls:
    (1) at or below 80% of the Median Household Income if the Dwelling Unit has 3 or more bedrooms;
    (2) at or below 70% of the Median Household Income if the Dwelling Unit has 2 bedrooms;
    (3) at or below 60% of the Median Household Income if the Dwelling Unit has 1 bedroom;
    (4) at or below 50% of the Median Household Income if the Dwelling Unit is a bachelor suite.

    Having knowledge of such an objective definition the City Council decided that under the STIR program “for-profit affordable rental housing” would be whatever the City Manager determined to be affordable “after considering the finishing, size, location and other design considerations, and proposed rents”. “Considering”, “considerations” and “proposed” are not very objective.

    How has the City Manager exercised this discretion? To date there is not too much to go on but I see that the 1142 Granville Street rezoning proposal is scheduled for a public hearing before the City Council on June 22. I eagerly scrutinized the Director of Planning’s report on this proposal to see whether the City Manager found that 320 square foot suites with proposed monthly rents of $960 would be “affordable” and therefore allow the waiver of development costs which the report valued at $638,000. And yes development costs are waived because on page 3 of the report it states that given the finishing, unit size and design features “the City Manager has determined that there is a measure of affordability for this housing”. So now we know that there only has to be a measure of affordability. I don’t see the word “measure” in section 933.1 of the Local Government Act.

    The next paragraph of the report notes that the STIR program is not revenue neutral and puts this program above other issues such as growth costs, area deficiencies and/or other community needs and impacts.

    Perhaps STIR was conceived with the best of intentions but that is not how it has evolved.

  • East Vancouverite

    Hearing people say the West End is park deficient is just precious.

    Stanley. Park.

  • david m

    @ric – good comment.

  • ThinkOutsideABox

    @East Vancouverite

    Nice try straw man, I don’t recall anyone saying the West End is park deficient.

  • Jon Petrie

    Per Sarah Isaacs’s (Jun 16, 7:29 pm) >…Toderian [says] that he plans to advise City Council to stop the application of STIR in the West End<

    That statement, in my view, is of considerable interest and is highly relevant to this discussion. It seems likely that Vancouver's Director of Planning now believes that the STIR projects now approved in the West End were a mistake.

  • Bill Smolick

    > isn’t the 600 lb gorilla in the room that house and condo prices are out
    > of whack with rents?

    +1

    Income in Vancouver is typically lower as well. I see the same jobs advertised in Calgary with $15k higher salaries as a baseline…and that Vancouver employer is probably going to act like he’s doing you a favour.

  • Jon Petrie

    An article by Kerry Gold in today’s Globe (p. S4) on Chinese buying of high end property in Vancouver quotes Bob Rennie: “… local incomes cannot compete with foreign money.”

    We need to acknowledge that high land prices in Vancouver are in part the result of off-shore demand that is conditioned by immigration policy. And we also need to bear in mind that for many of us higher land prices lower our quality of life (more of incomes going to housing/longer commutes because housing near work is too expensive/inappropriate density for new developments in old neighborhoods ‘justified’ by the high price of land)

  • IanS

    @jesse,

    “The solution seems to be what is the most politically unpalatable: get land prices back down to where they support their potential income from rents and STIR is unnecessary. I think other countries have done this through legislation and policy with some success.”

    I’m curious as to what kind of legislation and policy you think might be used to “get land prices back down”.

  • Jon Petrie

    Re how to “get land prices back down”:

    Brent Granby per Frances Bula April 13 “proposes to mandate inclusionary zoning, i.e. simply tell developers that they have to build in some affordable market rentals into every project. Don’t give them any density, just make it a condition of rezoning.” Effectively that would lower the cost of land for affordable market rentals to zero — not a bad idea in my view.

    A different point: because capital gains on land and housing is taxed less than ordinary income and there is no capital gains whatsoever on principal residences every Canadian is encouraged to over invest in personal housing and land. The tax incentive explains a large part of the generally significantly higher all in monthly costs of condo ownership for new buyers compared to monthly rental cost of equivalent accommodation — condo buyers expectations of tax free or tax sheltered capital gains drives the price condo buyers are willing to pay and thus elevates the price of land.

    Eliminate the tax incentive to hold land and the price of land will drop — I believe if the Feds announced a ten year phase in of a new policy to tax all land price gains as ordinary income with the land tax money going into a fund to improve transit, Canadian cities would become more affordable, diverse, and interesting places to live.

  • IanS

    @Jon,

    “Brent Granby per Frances Bula April 13 “proposes to mandate inclusionary zoning, i.e. simply tell developers that they have to build in some affordable market rentals into every project. Don’t give them any density, just make it a condition of rezoning.” Effectively that would lower the cost of land for affordable market rentals to zero — not a bad idea in my view.”

    As I understand it, the concern raised by the original poster was that house and condo prices were so high that there was no economic incentives to build rental housing, as the returns from condo development were so much higher.

    Your proposal, as I understand it, might result in additional rental stock, but it would not lower the price of condos etc. To the contrary, the condo prices would (IMO) likely increase, to offset the lower return from the project.

  • Jon Petrie

    IanS writes:

    >… proposal [to require affordable rentals in condo developments] might result in additional rental stock, but it would not lower the price of condos etc. … the condo prices would (…) likely increase, to offset the lower return from the project.<

    Condo prices are determined partly by demand, partly by cost of supply which is roughly a function of cost of land plus financing/ profit plus cost of construction plus cost of city requirements.

    If City requirements increase and the demand at x dollars a square foot for condos stays constant, a developer will want to pay less for the land in order to make a profit.

    The price of land is not fixed in stone and does go up and down depending on how profitably it is to develop (and on whether or not land is a tax advantaged investment).

  • IanS

    Jon,

    “If City requirements increase and the demand at x dollars a square foot for condos stays constant, a developer will want to pay less for the land in order to make a profit. ”

    I don’t disagree, but that assumes that the market can’t absorb any increase in price. IMO, it is more likely that, by limiting supply through the requirement for building rental stock, the prices of the units will rise. If the market absolutely cannot bear any further increase, I suppose that it would lower the price the developer would be willing to pay for property, or perhaps simply dissuade the developer from proceeding with a project.

  • Bill McCreery

    @ Sarah, “The Director of Planning Mr. Toderian told the WEN group a couple of weeks ago that he plans to advise City Council to stop the application of STIR in the West End, although not in the City of Vancouver generally. He also said he doesn’t think new rental is a needed primary public benefit in the West End”. Sarah is correct in what Mr. Toderian said. I too was there. I challenged him to acknowledge the STIR programme was not working & his reply is paraphrased above. He also said it was to late in the process to stop them. I disagreed with him on the latter but, my views don’t count.