Market Update: City of Vancouver Adjusts DCL & CAC Rates

Next week the City of Vancouver will consider recommendations to revise DCL and CAC rates. This comes following a decision earlier this year to allow increases to CAC (Community Amenity Contribution) target rates that did not have an inflation mechanism similar to Development Cost Levies (DCL’s – which allowed inflation starting back in 2009). The intent of the increase rates is to keep revenues in line with inflation in property values and construction costs.

DCL Rate Adjustments

The City currently has a City-wide DCL District (which accounts for the majority of land area and development in the City). The proposed 4.6% annual inflationary rate adjustment would result in the following rate changes:
  • $0.60 per SF increase for higher density residential (>1.2 FSR) and commercial developments;
  • $0.20 per SF increase for industrial development; and,
  • $0.14 per SF increase for lower density residential (≤1.2 FSR) development.
  • For residential and commercial development over 1.20 FSR, the DCL rate equates to $13.91 per SF

DCL Target Rate Adjustments

For CAC Targets, the proposed inflationary increase includes a one-time catch-up for inflation not captured since target rates were first established. In the case of Southeast False Creek, the adjustment extends back to 2007 while in Little Mountain Adjacent, Norquay and Cambie the adjustment extends back to 2013, and in Marpole the adjustment dates back to 2014. The magnitude of the rate increase which includes the one-time rate catch-up ranges from 8% in Marpole, 11% in Cambie Corridor, Norquay and Little Mountain Adjacent, and 25% in Southeast False Creek ( as previously noted, the % increase is much higher in areas where the catch-up period is longer).
dcl-cacThe changes come into effect September 30th, 2016.

City of Vancouver Preparing Plan for False Creek South Land Leases

The City of Vancouver Council will receive a staff report this week providing an update and high-level strategy to deal with the long-term land leases covering much of the False Creek South neighbourhood. What will likely follow is a multi-year planning process that will pave the way for redevelopment of some portions of the land.

False Creek South covers 136 acres extending along the waterfront from the Burrard Street Bridge to the Cambie Street bridge (excluding Granville Island), and it includes 23 acres of parks. About 80% of the land is owned by the City and was developed primarily in the 1970’s as either market strata, rental apartments, or co-ops.

FCS

Most of the housing on City-owned land are on ground leases, the majority of which are set to expire between 2036 and 2046 (with one co-op expiring as early as 2022. This includes 669 residential strata units and 48 commercial strata units.

FCS_1 FCS_2

The City is now proposing to work over the balance of 2016 to establish a foundation before a new community plan is developed in the coming years. Overall work includes:

1. Lease-end Payment Methodology
City staff continue to work with the provincial government and to consult with False Creek South strata leaseholders to clarify the methodology for determining the fair market value of each strata leaseholder’s interest in the strata lot upon expiry of the strata lot lease.
2. Co-op and Non-profit Residential Leases
The GM, Community Services report back to Council in Fall 2016 with a timeline for negotiating False Creek South co-op lease renewals in context of a broader non -market housing end- of-lease strategy framework.
3. Landowner Due Diligence
In its role as the major landowner in False Creek South, the City will evaluate the costs, benefits and implications of various renewal, extension and redevelopment options while recognizing the importance of providing certainty for leaseholders.
4. Affordable Options to Remain in Neighbourhood
City staff work with the False Creek South Neighbourhood Association, to explore affordable housing options for False Creek South residents to remain in the neighbourhood, in line with the City’s affordable housing policies and programs.

Updated Grandview Woodlands Plan Unveiled

After initially launching the planning process for the Grandview Woodlands neighbourhood of East Vancouver in March 2012, the City of Vancouver has released what is expected to be the final draft of the plan that will go to Council for approval in the next few weeks.

The initial draft concept plan caused widespread opposition and resulted in the City pulling back by forming a Citizens’ Assembly and subsequently a two year process of community engagement.

GW2

The resulting draft plan, which was released this weekend, contains few surprises, but generally lays out how the area is likely to be developed in the coming years in an area forecast to grow to 43,500 people by 2041.

Here is a sub-area breakdown for those unfamiliar:

“The Drive”

GW31. Retain the existing mixed‐use zoning (4-storeys or less) throughout the core blocks of Commercial Drive.
2. Maintain the pattern of smaller, individual retail frontages to help keep The Drive eclectic and active.
3. Outside of core and only on larger sites at the East 1st Avenue node, allow buildings up to 6-storeys/3.0 FSR to provide new housing.

Grandview

GW7

1. Modify regulations to discourage demolition of pre‐1940 houses.
2. Expand the duplex areas and revise regulations to encourage new infill housing.
3. Preserve the small‐scale local serving shops.
4. On arterial streets and in transition areas near transit routes on Hastings and on Broadway, allow a mix of four‐ storey apartments and rowhouses for families.
5. In the apartment district at the north end, allow buildings up to 6‐storeys / 2.4 FSR to provide renewed and additional secured rental housing while protecting character streetscapes.

HastingsGW4

1. Create a new gateway area near Clark Drive that incorporates renewed cultural, social and heritage assets, along with non‐market and other housing, with the tallest buildings at 18‐storeys. Range of densities highest at 4.0 to 5.6 FSR.
2. Improve pedestrian comfort along Hastings Street with public plazas that will activate and unify the street.
3. Support renewal and expansion of key social facilities such as those provided by the Urban Native Youth Association and the Vancouver Aboriginal Friendship Centre.
4. Step buildings down to heights in the 8‐ to 10‐storey range (3.0 – 4.0 FSR) as one goes eastward up the hill towards Victoria Drive and provide new rental and ownership housing.
5. Retain the existing mixed‐use zoning (4-storeys or less) in the Hastings Village shopping area near Nanaimo Street.
6. Allow for 100% secured market rental housing in buildings up to 6-storeys in the central portions of Hastings Street.

Cedar CoveGW5

1. Maintain the existing protected rental housing stock while allowing for managed rental replacement and new supply in buildings up to 6-storeys (2.4 FSR) in the area west of Nanaimo Street and up to 4-storeys on the eastside of Nanaimo Street.
2. Expand the neighbourhood shopping node at Dundas and Wall to allow for more services closer to home.
3. Preserve the significant character streetscapes that have been identified.
4. To the north of the shopping node, encourage expansion of Oxford Park by allowing for mixed‐use buildings in the 8 to 12-storey range (3.2 FSR).
5. Protect the city’s industrial and port‐related jobs while improving the interface with residential areas.

Britannia WoodlandGW6
1. Maintain the existing protected rental housing stock while allowing for managed rental replacement and new supply in buildings up to 6-storeys / 2.4 FSR.
2. Preserve significant character streetscapes that have been identified and allow infill housing to encourage retention of older buildings.
3. On selected blocks on Pender Street, adjacent to the new gateway neighbourhood along Hastings Street, allow buildings up to 10-storeys / 3.2 FSR  to achieve new non‐market and other housing.
4. Retain space for local jobs and improve the interface between industrial and residential uses.

Nanaimo

GW8

1. Allow ground‐oriented housing, such as rowhouses suitable for families, along much of Nanaimo Street.
2. At commercial shopping nodes, allow mixed‐use buildings of between 4 and 6-storeys (2.0 – 3.0 FSR) to help bring new life to the local shopping nodes.
3. Improve pedestrian comfort in the public realm to activate and unify the street.

Commercial‐Broadway Station Precinct

GW91. Create a new social heart for the community with a new civic plaza as part of a renewed Safeway site with ground‐floor commercial uses and new housing in buildings ranging from 12‐ to 24‐storeys (up to 5.7 FSR).
2. Near the station, allow mixed‐use and mixed‐tenure buildings ranging from 6 to 10-storeys.
3. In the Station Precinct residential areas, maintain the existing protected rental housing stock while allowing for managed rental replacement and new supply in 4 to 6‐storey buildings and 10‐storey buildings (4.0 FSR) on larger sites, provided that all new units are secured as rental housing.
4. Allow 6‐storey buildings on East Broadway and rowhouses in selected areas to provide family housing close to transit.
5. In the low‐scale, traditional character area located west and south of the transit station, allow duplex and two‐family dwellings with a focus on infill housing to retain character buildings.
6. Create new office space close to the rapid transit station.


How quickly the Grandview Woodlands plan area develops will be partially dependent upon market conditions but will also be shaped by the way in which the City of Vancouver will allow development to proceed per the Plan.

As was the case with both the Marpole Community Plan and the West End Community Plan, the Grandview Woodlands Community Plan divides the plan area into different sub-areas; effectively rezoning many areas and leaving others to be rezoned by proponents in the future. This ensures that larger scale projects will go through a typical rezoning process and smaller duplex and rowhouse projects will simply require development permits.

The proposed two areas are broken down as follows:

City-Initiated Rezoning Areas

These areas will be effectively “rezoned” and therefore will not require a lengthy application process and public hearing for each development.

GW12Privately Initiated Rezoning Areas

The map below depicts areas that will require a developer or building owner to apply for a rezoning and go through a typical rezoning process.

GW10Community Amenity Contributions (CACs)

Below is a map outlining where there will be a fixed-rate CAC target and where CACs will be negotiated on an application basis.

GW11A full copy of the draft Grandview Woodlands Community Plan can be downloaded at the City’s website: http://vancouver.ca/home-property-development/grandview-woodland-community-plan.aspx

City of Vancouver Selling Prime Downtown South Site

The City of Vancouver has placed a 1.42 acre property up for sale at 601 Beach Crescent. The irregularly shaped site sits just East of the Granville Street bridge, and mirrors the Vancouver House site at 1400 Howe Street (though the site has a smaller site area).

601 Beach_1

City of Vancouver planning documents identify the currently vacant site for a similar height as the Vancouver House project, at 425 feet (though Vancouver House was subsequently approved at 497 feet).

601 Beach

The offer submission date is July 27th, 2016.

Change Coming for City of Vancouver’s CAC Policy

Next week, City of Vancouver council will review a policy report that recommends changes to the Community Amenity Contribution (CAC) policy as part of an ongoing initiative to streamline and simplify the City’s overall approach to development contributions.

 

The major recommendations on changes to the CAC policy include:

 

1. Adjusting CAC target rates annually for inflation
One of the major recommendations is that current CAC fixed target rates will now adjust annually with inflation, just as the current DCL rates do. The proposed inflation rate would be based on a third party index for property and construction costs and would change to reflect “market conditions”. Moreover, there will be a “One-time Inflationary Adjustment Catch-Up to 2015”, as the areas with fixed rates have not been adjusted for several years. Here is a table showing current and proposed new CAC target rates:

CAC Table

The report indicates that the City will minimize any potential negative impacts, either on the
development industry or on the City’s ability to adjust CAC targets and DBZ (Density Bonus Zone) contributions, by:
  • reviewing recommended adjustments with industry stakeholders before applying annual inflationary rate adjustments;
  • carrying out periodic updates to recalibrate CAC targets and DBZ contribution rates. The recalibration of rates would be established by updating the public benefit strategy growth costs and then testing development viability for appropriate growth cost recovery
  • monitoring the pace of rezoning and redevelopment activity in each CAC target and DBZ contribution areas.

2. Administrative Updates to City-wide CAC Policy

The report also identifies some changes to the current overall CAC policy, including:
Removing $3.00 per SF CAC target for Standard Rezonings, and the 1.35 FSR exemption on small site rezonings
The $3.00 per SF CAC rate had been in place since 1999, and had only been used 22 times in 17 years – half of those for office buildings. The City is now proposing to remove this target rate and use a negotiated CAC approach.
Clarifying that CAC payments are due prior to rezoning enactment
Previously, cash-in-lieu payment of CACs could be made at either rezoning enactment or building permit issuance. The new policy will now require payment at rezoning enactment only.
The full report can be viewed here: http://council.vancouver.ca/20160531/documents/p1.pdf

Coincidentally, Council will also receive the Annual Report on Community Amenity Contributions and Density Bonusing for 2015 (the report can be viewed here: http://council.vancouver.ca/20160531/documents/a1.pdf) . Here are a few highlights:
  • in 2015, there were 42 rezoning approvals resulting in 2.4 Million SF of additional density
  • these rezonings generated a total of $103 Million in CACs
  • by comparison, there were 1,600 building permits under existing zoningCAC Table_1
  • in 2015, five large projects accounted for 65% of all CACs:

CAC Table_2

  • Cambie Corridor, Marpole and West End accounted for over 50% of rezoning density and CACs

CAC Table_3

  • There were 14 secured market rental housing projects approved in 2015, representing 1,192 units

CAC Table_4

  • in 2015, applications for density transfers totaling 160,000 SF were approved, reducing the heritage density bank down to 650,000 SF.
  • Affordable housing was the largest recipient of public benefit contributions (56%), followed by childcare facilities (19%), heritage, community facilities, and parks/open space/public art.

6-Storey Building Planned for Emerging Area of Marpole

An application has been submitted to rezone an 11,500 SF mid-block site at 8815-8827 Selkirk Street. Th plan is to rezone from the current MC-1 industrial zoning to allow for a 6-storey mixed-use building. The proposal is being made under the Marpole Community Plan, and the project includes:

  • 33 residential units;
  • 24 one-bedrooms, 6 two-bedrooms and 3 three-bedrooms
  • 2,408 SF of commercial space on the ground floor;
  • a building height of 61 ft.;
  • a total density of 2.96 FSR; and
  • 36 vehicle parking spaces and 42 bicycle spaces.

The site is currently improved with two older lowrise office/industrial buildings. The area south of West 70th Avenue has potential for new residential buildings, but so far has been slower to develop than other more established residential areas of Marpole.

8815 Selkirk 8815 Selkirk_1 8815 Selkirk_2The architect for the project is Wilson Chang.