Vancouver pivoting to fixed-rate CACs public benefits for smaller projects

City of Vancouver pivoting to fixed-rate community amenity contributions for low- and mid-rise residential projects

2021 artistic rendering of the redevelopment at 6409-6487 Cambie Street, Vancouver. (Esatto Architecture)

A simplified and predictable framework for community amenity contributions (CACs) will be created for some types of condominium housing projects in Vancouver.

On Tuesday, Vancouver City Council approved the planning process for creating fixed-rate CACs for low- and mid-rise market residential projects. City staff are now expected to return to City Council in early 2024 outlining the framework for fixed-rate CACs for such projects, which will improve clarity and transparency for development opportunities.

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Currently, the level of CACs provided by a project is determined through negotiations between City staff and the developer on a case-to-case basis, but the development industry has long asserted that such a process creates uncertainty and delays. Some local developers have suggested they have steered their activities away from Vancouver due in part to the complexity of CACs negotiations, which can take years to successfully complete.

Larger projects, such as high-rise condominium towers and neighbourhood-sized redevelopments, will still go through the negotiation process given the potential to maximize significant CACs.

“This framework will enable different pre-set contributions across the city, varying by the form of development, tenure, geographic location, base zoning, and/or lot size,” reads a City staff report.

“Staff will also explore opportunities to consolidate rates where possible to simplify the system. The ultimate goal is to eliminate the need for CAC negotiation as much as possible while providing simplicity, transparency, and predictability for new housing and job space.”

This planning process was initiated after City Council approved ABC Vancouver councillor Sarah Kirby-Yung’s motion in early December 2022 directing City staff to return to City Council by early Spring 2023 with a plan to implement reforms to CACs for low- and mid-rise condominium projects. Changes to the CACs regime was also campaign promise by the ABC party.

“We’re confident that these measures will help get more housing built,” said Mayor Ken Sim in a statement. “This fixed-rate system for low and mid-rise housing will reduce development cost uncertainty while protecting important community amenity contributions.”

CACs provided by developers are public benefits to the municipal government, typically in exchange for added market residential density. Developers can achieve their CACs commitments by funding and building the amenity, providing a cash contribution to the City, or a combination of both streams.

Examples of CACs include new and improved community centres, public libraries, childcare facilities, public parks and plazas, culture facilities, affordable housing, and transportation infrastructure.

For instance, some developments may choose to set aside some floor area within their new building for a childcare facility, which would count towards in-kind CACs.

And cash CACs contributions to the municipal government collected from rezonings within the West End are being pooled together to help cover the cost of the future new replacement facilities for Vancouver Aquatic Centre and West End Community Centre.

Generally, the greater the market residential density is allowed, the greater the public benefits offered.

In 2021, City Council approved 75 new rezonings that resulted in five million sq ft of additional floor area and the commitment of about $300 million in CACs, including financial contributions and the in-kind provision of 144 units of social housing, childcare facilities with a combined capacity for 123 kids, a 14,500 sq ft non-profit office hub space, a 6,000 sq ft youth centre, and nine artist live-work studios and cultural amenity spaces.

By having developments fund the cost of the growing needs for community amenities and infrastructure, it helps reduce the pressure to increase property taxes. But over the years, there has been some criticism on Vancouver’s methods, specifically with its overdependence on CACs to fund capital improvements.

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