By Glen Korstrom
The way the City of Vancouver collects money from developers to pay for community benefits encourages council to zone land improperly and planning staff to consider large projects that discount community interest, critics charge.
That’s why staff has considered:
- PCI Development Corp.’s proposal to build two towers (one 24 storeys and one 33 storeys for a combined total of 825,000 square feet) near the Marine Drive SkyTrain station;
- Rize Alliance’s original proposal to build a 26-storey tower near the corner of Kingsway and East Broadway (since reduced to a proposed 19-storey building); and
- Millennium English Bay Properties’ proposal to build a 20-storey tower at the corner of Bidwell and Davie streets.
Residents near each of the proposed developments have opposed the towers. One notable critic near the Marine Drive SkyTrain station is Trish French, the city’s former assistant director of planning. She wrote a letter to council last year outlining concerns about the scale of development proposed for her neighbourhood – development that’s more likely to occur given council’s May 9 rezoning approval.
“Zoning is being used as a form of income tax,” real estate consultant Michael Geller told Business in Vancouver.
The city allows developers a 15% profit on projects. Staff then calculates 75% of the increase in the property’s value after rezoning compared with what it was prior to the rezoning. The city then asks developers to provide that 75% in the form of community amenities.
Geller said the system has two main shortcomings:
- the city is biased toward the cash-cow of large projects; but
- it gets little money when the original land price is sky-high because previous owners expect rezoning to be a fait accompli.
For a current example, Geller pointed to the Cambie corridor, where single-family properties are priced well above their zoned value.
The situation reminds Geller of when he developed the Lanesborough seniors-oriented residential complex on West 41st Avenue in 2001.
“I didn’t pay anything as a community amenity contribution [CAC] because I bought it based on the rezoned value,” Geller said.
But Brent Toderian, the City of Vancouver’s director of planning, said Geller’s critique is ridiculous because his staff always considers a property’s value as it should be before being rezoned.
“Imagine the situation where every developer could say, ‘I overpaid for land. I don’t have money left to contribute to public benefits and amenities.’ It would essentially reward the developer for overpaying for the land.”
Toderian added that Geller’s charge that the almighty dollar biases city zoning decisions is similarly bunk. He stressed that his staff considers CACs only after determining a property’s appropriate land use.
City staff never let what Toderian describes as being the “land lift” (hike in value) determine the scope of a potential development.
“That would be the tail wagging the dog. We might end up proposing densities and heights that are much higher than are appropriate simply because we’re trying to pay for something. That’s form follows finance. It’s not good planning.”
Nonetheless, city council approved a plan May 9 to allow buildings up to 12 storeys in the Cambie corridor and left room for developers to build higher around Oakridge Mall near 41st Avenue and potentially up to 33 storeys at the southern end of Cambie Street near Marine Drive.
Without the approval to build much taller buildings, Geller said Cambie Street development could be stalled because property values have shot up so much that the land lift is not high enough to make projects viable.
“I see evidence to the contrary,” countered Toderian. “We’re seeing applications for mid-rise buildings in various places along the corridor. The greatest interest is around stations, particularly Marine [Drive] and Cambie [Street.].”