Court rejects challenge to rescind approval of 229 rental homes in Vancouver | Daily Hive

B.C. court rejects challenge to rescind approval of 229 rental homes in Vancouver's Cambie Corridor

2025 development permit application's rental housing concept for the site of 520-590 West 29th Ave. and 4510-4550 Ash St., Vancouver. (Yamamoto Architecture/Sightline Properties)

A Vancouver neighbourhood association has lost its bid to overturn the approval for a low-rise secured purpose-built rental housing project near SkyTrain’s King Edward Station, after a judge upheld the City of Vancouver’s decision to proceed without any inclusion of below-market rental homes.

In a ruling last week, Justice Morellato of the Supreme Court of British Columbia dismissed the Cambie Corridor Neighbourhood Association’s challenge against the municipal government and local developer Sightline Properties, finding the approval process was fair and City Council’s decision was reasonable.

The project is planned for the land assembly at 520-590 West 29th Ave. and 4510-4550 Ash St. — situated about a 10-minute walk south from the Canada Line station, half a block west of Queen Elizabeth Park, and one block east of BC Children’s Hospital.

In recent years, a townhouse neighbourhood has emerged within this particular area of the Cambie Corridor Plan, replacing single-family detached homes. Part of this is driven by previous City-initiated rezoning enabling townhouses in the area.

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The proposal reviewed by City Council included two six-storey buildings and two townhouse blocks. City Council unanimously approved the rezoning in July 2025 for 230 secured purpose-built rental homes. The total number of rental units was subsequently marginally reduced to 229 during the development permit application, which was approved and issued in December 2025.

Sightline had originally planned to build 46 upscale townhomes on the property, with anticipated sale prices of $2 million to $2.3 million each. According to the ruling, the developer obtained its permits in 2022, demolished the previous single-family detached houses on the city block, and began some construction beginning with excavation. But a weakening housing market left it without any pre-sales.

The developer subsequently shifted to a secured purpose-built rental housing proposal, following legislative changes by the provincial government at around the same time that encouraged more residential density near SkyTrain stations.

520-590 West 29th Avenue 4510-4550 Ash Street Vancouver

Site of 520-590 West 29th Ave. and 4510-4550 Ash St., Vancouver, in relation to its walking distance from SkyTrain’s King Edward Station. (Google Maps)

July 2024 demolished condition of the site at 520-590 West 29th Ave. and 4510-4550 Ash St., Vancouver. (Google Maps)

However, a central issue in the case was the removal of the project’s below-market rental housing component.

For a rental housing project in this part of the legislated Transit-Oriented Area (TOA) around the subway station, the City’s transit-oriented rezoning policy called for at least 20 per cent of the net residential floor area to be provided as below-market rental housing, with rents discounted by at least 10 per cent from Canada Mortgage and Housing Corporation’s (CMHC) citywide average.

Sightline initially proposed a below-market rental housing component, but City staff later recommended approving the project entirely as market rental housing.

City staff concluded that the rezoning would not create enough additional land value to support the below-market rents. They asserted that the site’s existing zoning already allowed more density than many other properties in the TOA, reducing the additional value a further rezoning would generate.

The developer had also already paid the municipal government a $1.2 million contribution tied to the additional density allowed for its earlier strata market ownership townhouse project.

The City also did not require a community amenity contribution (CAC), a payment, or other public benefit negotiated through the rezoning process.

However, the project was still expected to provide approximately $5.8 million in development cost levies (DCLs) and a public art contribution of roughly $300,000.

The association argued that residents could not properly examine the removal of the below-market rental homes without access to the developer’s financial projections and the City’s detailed financial analysis of the pro forma.

Those records included estimates of construction costs and anticipated revenues. City staff reviewed the developer’s information and carried out their own analysis, but the underlying financial documents were not given to elected officials or the public.

The association also argued that City Council had failed to adequately justify departing from the City’s housing and CAC policies. In its view, City Council should have obtained the financial records and independently assessed City staff recommendations.

2022 rezoning’s strata townhouse concept for the site of 520-590 West 29th Ave. and 4510-4550 Ash St., Vancouver. (Yamamoto Architecture/Sightline Properties)

2025 rezoning’s rental housing concept for the site of 520-590 West 29th Ave. and 4510-4550 Ash St., Vancouver. (Yamamoto Architecture/Sightline Properties)

2025 development permit application’s rental housing concept for the site of 520-590 West 29th Ave. and 4510-4550 Ash St., Vancouver. (Yamamoto Architecture/Sightline Properties)

However, Justice Morellato rejected those arguments by the association.

She found that residents had access to the same materials city councillors considered, including a City staff report explaining the revised proposal and the reasons for removing the below-market rental housing component. The judge said that report was disclosed seven weeks before the public hearing.

The judge accepted that the financial records contained commercially sensitive information. Evidence before the court described how disclosure could weaken a developer’s position when negotiating construction contracts or competing with other companies, while also affecting the municipal government’s future negotiations. It would also set new precedent for the City in how it deals with developers and their applications, as pro formas for a proposal are typically not publicly released.

In the circumstances of this case, she found the City was not required to release those records for the public hearing to be fair.

“I begin by underscoring that Council’s method and process of decision-making were transparent and fair,” reads the ruling.

“While the Referral Report did not disclose the pro forma financial information, which contained confidential and commercially sensitive information, it disclosed that City staff had conducted its own pro forma analysis and noted the result: ‘the proposal would not generate sufficient land value lift to support the inclusion of below-market rental housing on this site’, noting also that ‘the existing zoning for this site (RM-8A) already permits greater development potential than for the majority of sites zoned RA-1 in the Tier 3 King Edward Station TOA, reducing the incremental value typically associated with a rezoning in this area.'”

Morellato also concluded that city councillors were entitled to consider the City staff report and public submissions without repeating the financial analysis themselves. Their questions during the public hearing showed they had considered residents’ concerns and exercised their own judgment.

The judge emphasized that the transit-oriented rezoning policy did not legally bind City Council.

Despite the absence of a below-market rental housing component and CACs, the court found City Council had a reasonable basis to regard the substantial increase in secured purpose-built rental housing — along with the DCLs and public art contribution — as a public benefit.

The provincial government’s housing legislation also formed part of the backdrop. City staff advised City Council that it could not reject the proposal solely on height and density considerations, although it could reject it for other planning reasons, including the absence of below-market rental housing.

Morellato rejected the association’s argument that City staff’s analysis amounted to a broader interpretation of the City’s policy applying across TOAs.

A separate dispute concerned whether the association should have been allowed to bring the case at all.

Sightline pointed to the association’s July 2025 fundraising letter that identified delaying building permits as a goal and described a return to a three-storey townhouse project as the preferred outcome. The letter also raised concerns about declining property values and the loss of neighbourhood character.

“Sightline submits that this petition is emblematic of the ‘not in my backyard’ or NIMBY attitude that has plagued municipal efforts to approve rental developments and led the Province to enact the Provincial TOA Requirements,” reads the ruling.

That distributed fundraising letter also indicated that the judicial review was partly driven by the association’s strategy to “align with the 2026 election cycle and allow for policy changes.”

Morellato initially allowed the association to bring the legal challenge, finding it raised serious questions about disclosure and that residents had a genuine interest in the fairness of decisions affecting their neighbourhood.

Ultimately, however, she dismissed the petition in its entirety and ordered the association to pay court costs to the City and Sightline.

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