A Synopsis of the Housing Vancouver Strategy

By now you’ve probably seen in the media that the City of Vancouver has released an outline of the much anticipated Housing Vancouver Strategy, first announced in 2016 under then new General Manager of Planning Gil Kelley. 

For those unfamiliar, the Housing Vancouver Strategy was announced as a broad City-wide planning initiative intended to address some aspects of the current housing affordability crisis. The specific policies being proposed come as a result of over a year of public and expert consultation as well as internal planning review. As the City’s report outlines, the main intent of these policies is: “to address the rampant commodification of housing and speculative demand, shift our housing toward the ‘Right Supply’, and ensure affordability, protection, and support for our most vulnerable residents.”

Perhaps not surprisingly, the Strategy will yield significant policy changes in the year leading up to the Civic Election. Notwithstanding any political motivations, from a planning perspective, the Strategy is one of the most ambitious planning programs outside of any specific neighbourhood plan, and could result in significant changes to single family areas and the low density areas around East Van transit stations and some apartment areas.

Overall the ten-year plan is intended to create:

  • 72,000 new housing units, including;
    • 12,000 social, supportive and co-op units
    • 20,000 new purpose-built rental units
    • 30,000 new condo units (incl. 1,000 laneway homes and 5,000 townhouses)

The full staff report can be downloaded here: http://council.vancouver.ca/20171128/documents/rr1.pdf

Below is a summary of the ten key policy recommendations being proposed:

  1. A) Shift toward the Right Supply

The City plan to launch major planning programs near transit hubs that don’t yet have density including: Nanaimo Station, 29th Station and Olympic Village Station. The City is also already starting a Broadway Corridor Planning Program.

This is potentially the biggest takeaway for developers, investors and those in the RE industry. The Skytrain Station announcement had been anticipated for well over two years but had yet to be formalized in a policy announcement.

B) Implement the Moderate Income Rental Housing Pilot Program

This is essentially an extension of the Rental 100 program, except further incentives would be offered to developers that include 20% of the gross floor area to “moderate income households” targeting between $30,000 and $80,000 per year. 

The Pilot program will consist of 20 rezoning applications between January 2018 and July 2019. 

Incentives include: 

  • Additional density
  • DCL Waivers
  • Access to grants and senior gov’t financial support programs
  • Parking requirement deductions
  • Relaxation of unit size minimums (ie. micro suites)

C) Advance the Transformation of Low Density Neighbourhoods to Increase Housing Variety

This particular policy direction has the potential to be one of the most dramatic. It could entail densification of single family areas, both near transit and in other areas. The City specifically mentions “Low density areas in the western and southern areas” as candidates for new housing. Potential options being explored include: allowing multiple dwellings in low-density neighbourhoods, including secondary suites, multiple suites, laneway housing, duplexes, triplexes, and fourplexes with secondary suites; as well as the creation of new townhouse zones).

While perhaps not as transformational in terms of density as the Nanaimo/29th/Olympic Village areas, the prospect of townhouses in areas such as Kerrisdale and Dunbar could prove the most contentious and will be interesting to watch.

TIMING: Beginning in 2018.

2. Limiting Speculative Investment – Develop a New Policy to Stabilize Land Values in Planning Programs 

The City will seek to take quick action to limit speculation developing a new interim public benefits strategy designed to curb speculative value. The City would, for example, set the CAC target rate prior to the launch of new planning programs in an effort to curb speculative purchases. This will be tested initially as part of the Broadway Corridor Planning work.

TIMING: Beginning early 2018.

3. Develop a New 10 Year Affordable Housing Delivery and Financial Strategy 

The City is going to look at how to deliver more social and supportive housing through review of various delivery and business models. These include:

  • Investigating feasibility of establishing a housing endowment to
    build and sustain affordable housing on a portfolio basis
  • Clarifying the role and mandate of VAHA as the delivery agent for affordable housing on City land
  • Leveraging senior levels of government, non-profit and private sector partners
  • Specifying the partner investment and/or contribution required to meet housing
    Vancouver targets for the lowest income households

TIMING: Report to Council by Spring 2018.

4. Partner in the Development a 10 Year Regional Urban Indigenous Housing Strategy

The City intends on developing a strategy to work three local first nations groups to address housing issues over a 10 year strategy plan. The strategy will include the delivery of 500-600 housing units at five properties: 950 Main, 1015 E
Hastings, 1618 E Hastings, 1607 E. Hastings, and 235-285 E 5th Avenue.

TIMING: Already underway.

5. Launch a New Social Purpose Real Estate Incentive Program 

The City will also launch a new “Social Purpose Real Estate Incentive Program” to encourage development of new and redevelopment of existing non-profit housing on non-profit owned sites. The program will explore:

  • Enhancing the City’s Housing Infrastructure Grant program to support affordable housing where partners, usually non-profits and co-ops, are seeking to build affordable housing on their own land
  • Additional density, ownership of assets, aligning the per door grant with affordability, combined with low-cost and predictable federal and provincial financing
  • Supporting the development of affordable housing on land owned by faith-based and nonprofit service organizations

TIMING: a draft strategy/policy by Fall 2018.

6. Accelerate SRO Replacement while Improving the Existing Stock to
Enhance Affordability, Livability and Supports to Tenants

The City intends on protecting the SRO stock and SRO tenants through a “two-pronged approach”: 

  • A goal of replacing 50% of the remaining private SROs with new self-contained social housing in 10 years.
  • Improve the affordability, livability and supports for SRO tenants through: new SRO Revitalization Fund, an enforcement and regulatory approach to existing SROs and portection against further loss and displacement

TIMING: Already underway.

7: Temporary Modular Housing 

The City has requested BC Housing funding for 1,200 units over the next two years, with 600 units expected to be delivered in 2018.

TIMING: Already underway.

8. Increase Rental Protections

The City has always placed emphasis on protecting existing rental stock and this has become increasingly important as rents have skyrocketed and redevelopment pressure is at an all time high. 

The City will explore opportunities to redevelop existing rental housing in order
to increase the overall supply of rental housing, while prioritizing affordability and ensuring protections for existing tenants. The City will undertake a review of the Rental Housing Stock ODP and Rate of Change areas, to:

  • Continue to ensure no net loss of rental units
  • Reduce the threshold that triggers one-for-one replacement (e.g. from 6 to 3 units)
  • Identify opportunities to redevelop and expand existing rental housing while preserving affordability

The City will also seek to enhance capacity to assist tenants with relocation needs through the creation of a new Tenant Protection Manager.

TIMING: Report to Council by Spring 2018.

9: Remove Barriers to Support Diverse Ways of Living – Enable Collective

The City says that they “heard during the Housing Vancouver engagement process that more residents are living in non-traditional housing arrangements and forms to improve affordability and help them stay in the city (e.g. collective housing, co-housing, tiny homes, live aboard boat options, etc.)”

The City is going to look at ways to increase co-housing options, as well as relaxing regulatory issues associated with non-traditional housing. Hopefully this means more inclusive zoning.

TIMING: Report to Council by Spring 2018.

10: Cutting Through the Red Tape – Simplifying and Clarifying Complicated
City Processes

If the first nine policy directions weren’t ambitious enough, this one could stick out as being dubious among interested industry and planning observers. Certainly the City’s processes for applications, permitting and consultation have become absurdly complicated and long. 

The City outlines some initiatives to help tackle the overarching issues:

  • a comprehensive review of City regulations
  • Increase processing capacity and reduce processing times
  • The City will deliver a simplified CAC policy for rezoning projects that are 100% rental 

TIMING: As expected, there is no definitive timeline for this review, but it is apparently already underway.

Overall, the Housing Vancouver Strategy is fairly ambitious in that it will result in transformation of some single family neighbourhoods, likely those already near transit hubs or near existing shopping areas (think near C zones) such as Kerrisdale and Dunbar.

It is also interesting to note the extent to which land speculation has crept into policy conversation. I suspect that it will become increasingly difficult to determine land valuations prior to neighbourhood plan finalization. 

Port Moody Set to Establish CAC & Density Bonus Policy

Nearly three years following the City of Port Moody’s adoption of their new Official Community Plan, City Council will now be considering a new Community Amenity Contribution (CAC) and Density Bonusing policy for the City. 

While development has stagnated for close to a decade in Port Moody (even following the 2014 OCP), the arrival of the Evergreen Line and various amendments to the OCP since, coupled with the current market dynamics has led to a more recent uptake in rezoning applications. This led City staff to put forward the idea of a CAC policy in the past year.

The new policies are broken down between Density Bonusing and CAC’s.

Density Bonus Program

The density bonus program will be implemented as an amendment to the Zoning Bylaw, and includes the following major points:

  • The density bonus program applies City-wide, but is most often expected to be used in the Transit-Oriented Development Areas where higher densities will be concentrated;
  • The density bonus will apply to any development with a density greater than 2.5 FAR 
  • applies only to residential gross floor area. It excludes all forms of employment-generating floor space
  • does not apply to density used for low- and moderate-income housing since the City wishes to encourage these two types of housing, per the City’s Affordable Housing Reserve Fund Guidelines;
  • the financial contribution to the City is 75% of the land value of the additional density above an FAR of 2.5 (the land value will be determined on a project-specific basis using an independent professional appraisal, commissioned by the City and paid for by the developer);
  • in lieu of a financial contribution, the City may allow an amenity to be provided by the developer that is equivalent in value to the financial contribution.

Community Amenity Contribution Program

The City of Port Moody has never had a CAC policy although it does already have elements of a program in place including a public art contribution mechanism and the encouragement of developers to contribute toward the City’s Affordable Housing Reserve Fund. However, in the absence of specific policy, the amount collected has been negotiated on a project-specific basis and it has not been consistent (although it has generally been in the range of $2.00 to $3.00 per SF). The proposed CAC policy described below provides consistency and certainty for both developers and staff. It includes:

  • the program will apply to all areas within Port Moody with the exception of the 215A Levy Area of Inlet Centre
  • the CAC is set at $6.00 per SF of residential floor space being developed on a lot that is being considered for rezoning, to a maximum of $6,000 per residential unit (or per lot in the case of single family residential subdivisions);
  • credit will be given for any residential floor space on a lot that is being either retained or demolished as part of redevelopment;
  • the CAC program will apply to residential floor space up to a maximum density of 2.5 FAR, with any floor space above that subject to the City’s Density Bonus Program;
  • the CAC will be allocated as follows:
    • $2.00 to the City’s Affordable Housing Reserve Fund; and
    • $4.00 to the City’s proposed new General Community Amenity Contribution Reserve Fund

Council may, at its discretion, waive some or all of the CAC as part of a rezoning where affordable housing or another public amenity is being directly provided by the applicant.

City of Vancouver Inflates Density Bonus Contributions & CAC rates

The City of Vancouver is about to implement their annual inflationary adjustment to Density Bonus Contributions and target rate CAC’s. The density bonus contributions are basically CAC’s that are specifically intended for density bonuses associated with conditional zoning in a small set of pre-planned areas including: Mount Pleasant, Joyce Collingwood, Marpole and Norquay. 

The target rates for density bonus contributions in these areas are proposed to increase by 11.9%, and will become effective on September 30, 2017. The Mount Pleasant I-1A and I-1B zones are not being adjusted for inflation this year because these areas were only established as new density bonus zones in 2017.

DBCs 2017

For CAC’s the increase is at the same rate, with updated rates as follows:CAC Rate 2017

Expect even further updates to CAC target rates coming in late 2017 and early 2018 as the City of Vancouver seeks to “align with the updated needs identified in the Public Benefits Strategy.”

A full copy of the Policy Report on Density Bonus Contributions can be viewed here: http://council.vancouver.ca/20170725/documents/p8.pdf

The Policy Report on CAC’s is located here: http://council.vancouver.ca/20170726/documents/pspc5.pdf

False Creek Flats Plan Nearing Final Approval

Next week the False Creek Flats Plan goes to Vancouver City Council for final approval of the draft. The plan encompasses 450 acres of land anchored by the future St. Paul’s Hospital and new Emily Carr campus.

FCFPThe False Creek Flats Plan planning process was originally launched two years ago and is now in final draft form after various stages of public input.

Here are a few details:

Existing Zoning

FCFP_1The Plan seeks to divide the plan area into four distinct sub-areas, as follows:

FCFP_2Health Hub

This area will be the main focus of development change; centered around the future St. Paul’s Hospital and will include uses that support health care and job space, as well as some new residential space.

Creative Campus

This area is located around three rapid transit stations and will be predominantly an employment area with some limited residential uses.

Terminal Spine

This area will see some modest density increases, but limited to industrial and employment uses.

Back of House

This area will continue to remain light industrial uses with a focus on food economies and a move away from low-employment uses like auto dealers and mini-storage.

For further information, take a look at the draft of the Plan here: http://council.vancouver.ca/20170517/documents/cfsc1-AppendixA-FalseCreekFlatsPlan.pdf

Top 10 Land Deals of 2016

Residential development site sales in Metro Vancouver topped $4.5 Billion in 2016. It’s a staggering value only made possible by the confluence of a variety of local and international market forces including: incoming capital, a feverish residential real estate market, and a perceived lack of quality land available for sale. Each of these factors seemed to create the perfect storm in late 2015 and early to mid-2016 and have played a large part in driving land values to record highs.

To put the year we’ve had into perspective, the total land transaction value for 2016 almost matches the previous two years combined ($2.5B for 2015, $2.4B for 2014).

Here is a brief look at each of the 10 largest land deals of 2016:

#1 – Oakridge Transit Centre, 949 West 41st Avenue, Vancouver

OTC_3Price:                   $440 Million

Site Area:            13.8 acres

Vendor:                Translink

Purchaser:          Intergulf Developments / Modern Green Development

The goods:         This was by far the biggest land deal of the year – though the deal is structured to be paid over five years. The former bus barn site was declared surplus land several years ago by Translink and the City of Vancouver initiated a planning policy for the site and surrounding area in 2014. The planning policy was approved in December 2015 to allow for over 1,265,000 SF of density in several low and midrise buildings.  

Shortly thereafter the “OTC” site was marketed by Cushman Wakefield. The site secured offers from 14 potential buyers in the spring of 2016 and was ultimately sold to a partnership between Intergulf and Modern Green Development.

A listing video overview can be viewed here: https://youtu.be/GILwlBuOBRQ

#2 – Pearson Dogwood Lands, 650 West 57th Avenue, VancouverPearson_5

Price:                  $299.6 Million

Site Area:            25.4 acres

Vendor:                Vancouver Coastal Health

Purchaser:          Onni

The goods:          This prime site at Cambie and 57th was sold by Vancouver Coastal Health in 2014 as part of a phased deal with Onni. The bulk of the sale formally completed in March. A formal rezoning application has now been submitted which contemplates over 3 Million SF of density, to be completed in five phases with over 10 towers, several mid-rises and a future Canada Line Station. The deal includes replacement of existing VCH facilities on-site.

#3 – Molson Brewery Lands, 1550 Burrard Street & 1655 West 1st Avenue, Vancouver

Price:                  $185 Million

Site Area:            7.7 acres

Vendor:                Molson Coors

Purchaser:          Concord Pacific

The goods:          Though not the largest deal of the year, this one certainly generated a lot of buzz in the marketplace, and is the only sale on this list that is not a residential land sale – at least based on current zoning policy. The sale closed on March 31 after being listed by Simon Lim of Colliers in 2015. The site is currently zoned M-2 which only allows for manufacturing/industrial uses and is still occupied by Molson on a leaseback basis until their eventual move. Details remain scarce on Concord’s future plans for the site, though it will almost certainly include a substantial commercial component.

#4 – 1444 Alberni Street & 740 Nicola Street

Price:                  $170.1 Million

Site Area:            43,300 SF

Vendor:               Wall Financial

Purchaser:          Landa Global/Asia Standard

The goods:          This full city-block located in the West End of Downtown Vancouver was redesignated as part of the West End Community Plan, adopted in early 2014. The site is currently improved with an office and apartment tower built in the 1970’s. Wall had acquired the site in March 2014 for $83.5 Million and subsequently sold through Simon Lim of Colliers after a bid process in late 2015. The sale closed in April 2016. It is expected that the property will be completely redeveloped with two 40+ storey condo towers.

#5 – Brighouse Square, 6340-6390 No. 3 Road, Richmond

Price:                  $73,500,000

Site Area:            3.6 acres

Vendor:               Sanna Enterprises

Purchaser:          YYH Development Ltd.

The goods:         Brighouse Square is a retail strip plaza at No. 3 Road and Cook Road across from Richmond Centre. The site sold as a potential future residential development play in May 2016 to a Chinese development group. It had been designated as ‘Urban Core T6’ in Richmond’s City Centre Plan to allow for mixed residential and retail. Simon Lim of Colliers acted as the broker in the off-market deal.

#6 – 1745 West 8th Avenue, Vancouver1745 West 8th Avenue

Price:                  $70,000,000

Site Area:           56,550 SF

Vendor:              CIBC

Purchaser:          Delta Land

The goods:         Our team marketed and sold this C-3A zoned, Fairview office building/development site on behalf of CIBC in late 2015, with the sale closing in February 2016. The site achieved 9 offers, with the successful buyer being Delta Land Development. CIBC is leasing the property back until mid-2017 after which time Delta will likely release plans for the property.

#7 – 1059-1075 Nelson Street, Vancouver

Price:                 $68,000,000

Site Area:          17,292 SF

Vendor:              Suncom

Purchaser:          Shan Gao

The goods:         In one of the more interesting sales in recent Vancouver history, this assembly of two non-descript walkup apartment buildings sold three times in just under two years in a series of events documented by Ian Young. Our team acted for Wall Financial in the original assembly and subsequent sale in January 2016. The site flipped in February 2016 for $68,000,000 to a Chinese buyer who remains generally unknown to the market.

1070 - 1080 Barclay_Sold#8 – 1070-1080 Barclay Street, Vancouver

Price:                  $59,000,000

Site Area:          17,292 SF

Vendor:              Two Private Local Investors

Purchaser:         Bosa Properties

The goods:        Just across the lane from #7 on this list, this assembly of two apartment buildings was listed by our team in late 2015 and sold after multiple offers to Bosa Properties. The site was also re-designated in the West End Community Plan to allow for towers up to 550 ft. (subject to shadowing). Bosa also secured the neighbouring strata building at 1060 Barclay. The deal closed in February 2016.

propertyfile-ashx#9 – 1818-1862 West Broadway, Vancouver

Price:                 $56,250,000

Site Area:          37,500 SF

Vendor:              Private Local Investors

Purchaser:         Suncom

The goods:        This assembly of lots on West Broadway near Burrard Street was sold by our team in September 2016. The assembled site comprises 300 feet of frontage and the existing C-3A zoning allows for up to 3.0 FSR residential with retail.

asdfas#10 – 1810 Alberni Street & 703-751 Denman Street

Price:                 $55,000,000

Site Area:          17,292 SF

Vendor:              Local Investor

Purchaser:         Landa Global

The goods:        This West End development site was sold by the Simon Lim team in September 2016 after a listing process. The Property is currently zoned C-5A (West End Commercial), which provides for 2.20 FSR with potential to increase density to 7.00 FSR, and by heritage density increasing up to 7.70 FSR. It is situated in Lower Robson Area A of the West End Community Plan – designation consistent with the amended C-5A Zoning (no rezoning required).

Honourable Mentions:

Below are a couple of notable transactions that formally closed in 2016, but we are not including as they aren’t technically relevant sale deals for the purposes of this analysis.

  • 508 Helmcken Street – this site, more commonly known by its project name “8X on the Park“, is part of a land exhange that was negotiated back in late 2012 with the City of Vancouver. The completion of the Jubilee House social housing replacement project triggered the land exchange so that Brenhill Development can move forward with the construction. The sale value was $83,500,000.
  • 1166 W Pender_Sold1166 West Pender Street – our team acted in this $71,400,000 sale, closing in April 2016. The site is currently improved with a 15-storey office building that the Purchaser, Reliance Properties, intends on redeveloping, though we have not considered it a pure land play as with the transactions above.

Some notes from the above list:

  • 9 of the 10 largest land deals in Metro Vancouver took place in the City of Vancouver
  • 8 of 10 were sold by market bid process (the other 2 were ‘off-market’)
  • 3 of 10 were bought by well-established ‘local’ development groups, the other buyers were offshore or ‘new-entrant’ development companies
  • 8 of 10 will require a rezoning process before development can occur

New Metrotown Downtown Plan Draft Released

The City of Burnaby has released a draft of the new Metrotown Downtown Plan, to be considered by City Council prior to adoption. The new plan comes after years of anticipation of finalizing planning efforts in Metrotown, which has seen rapid redevelopment following the City’s revision of the four town centre areas several years ago, and the creation of the ‘s’ zoning designation in 2010 that facilitated many of the highrise rezoning applications that have occurred in the past five years.

metrotown-planThe Metrotown Plan was originally drafted in 1977 and has been amended many times since. Planning efforts have been ongoing but the formal planning process got underway in the spring of 2016 with a draft report on the proposed changes in the plan area. The new plan seeks to designate Metrotown as the true core of Burnaby’s four town centre areas; essentially calling it Burnaby’s Downtown.

Core principles in the plan include:

  1. Creating an Official Downtown
  2. Establishing Neighbourhoods and Community
  3. Providing Greater Connectivity
  4. Enhancing the Public Realm
  5. Providing New Amenities

Of primary interest to those in the development industry are the proposed updates and changes to the land uses within the plan area.The changes will create some new density, but more importantly will clarify potential zoning and urban design possibilities in some of the peripheral areas of Metrotown that had been in limbo for several years. The plan also shapes potential large-scale rezonings in the core area for big sites along Kingsway.

The general land use map and zoning designation framework is included below (click for greater detail):


Other highlights:

  • high density mixed-use sites will require a minimum site area of 1.5 acres and will require a minimum commercial use of 1:3 per residential uses. (1 commercial SF per 3 residential SF)
  • Core downtown sites with RM5s/C3 designation allowing density up to 11.0 FAR
  • Large scale sites such as Metropolis at Metrotown, Sears, Old Orchard Shopping Centre and Plaza 5000 will require Master Plans prior to rezoning enactment
  • Sites in the Maywood area (south of Beresford), subject of rampant speculation over the past few years, will become a mix of RM5s and RM4s, allowing heights of 12-30 storeys South of Beresford, and 4-storeys along Imperial
  • new highrise opportunities North of Kingsway between Boundary and Halley Avenue
  • the creation of Central Boulevard as an ‘entertainment and garden street’ with new retail opportunities
  • a significant new open space in a redeveloped Metrotown Mall site
  • minimum frontage of 200 feet and minimum site area of 24,000 SF for a single tower project
  • minimum frontage of 400 feet and minimum site area of 48,000 SF for a two tower project (minimum 80 foot tower separation)
  • 6 ft minimum front and side-yard setbacks for commercial/mixed-use developments, and 15 ft front and side-yard setbacks for residential developments
  • larger floorplates for residential buildings over 50-storeys only (8,100 SF max floorplate) – office towers exception

The plan does not contain a unique set of community benefit policies. The City of Burnaby’s Community Benefit Bonus Policy would apply to any rezoning being brought forward.

The full draft of the Metrotown Downtown Plan can be downloaded here: https://burnaby.civicweb.net/filepro/documents/?preview=16934

Market Spotlight: Burnaby Rezoning Applications

A number of rezoning applications head to Burnaby City Council this week. Below is a brief summary of some of the larger projects planned.

4460-4482 Juneau Street

4460-juneauSolterra owns this three-lot assembly of older M1 zoned industrial buildings along Willingdon Avenue at Juneau Street in the Brentwood area. The plan for the site is a 25-storey tower with townhouses under the RM-4s designation. There is a 23-storey tower just across Juneau Street at second reading.

6525-6585 Sussex Avenue

6525-sussexThe plan for this 57,116 SF Metrotown site at Sussex and Beresford is for a mixed-use high-rise and low-rise market residential apartment building including retail and office uses. The project will also include a separate non-market housing building developed in conjunction with B.C. Housing. The proposed density is 5.0 FAR per the RM-5s and C2 guidelines. The site was acquired by Thind Properties in May 2016 for $32,680,000.

7422-7470 Buller Avenue

7422-bullerThis 132,000 SF site is currently occupied by a multi-tenant warehouse building and is located next to a section of former rail line in the Royal Oak area. The site is designated for medium-density residential development, and the application is for a mix of stacked-townhouses and traditional townhomes with full underground parking to a density of 1.1 FAR.

5180 Lougheed Highway

5180-lougheedAnother highrise condo tower is being planned for the Brentwood area; this one at the corner of Lougheed Highway and Springer Street. The 51,204 SF site is currently occupied by two older industrial buildings owned by Beedie Living. The plan calls for a 269,000 SF tower with 250 to 300 residential units. The concept includes “breaks” throughout the building to add visual interest to the massing and scale of the tower.