Vancouver City Council to overhaul developer community amenity contributions with fixed rates

Dec 1 2022, 1:33 am

The system that determines exactly how much developers and property owners pay the City of Vancouver for public benefits, in exchange for increased density allowances in their new building projects, is set to change.

Community amenity contributions (CACs) generated by market-based developments are a substantial method for how the municipal government achieves new and improved community and recreational facilities, public libraries, childcare facilities, public parks, and arts and cultural spaces, as well as new affordable housing projects and some transportation infrastructure upgrades.

A new member motion by ABC Vancouver councillor Sarah Kirby-Yung calls for an overhaul of CACs to a fixed-rate system for low- and mid-rise projects. This motion will be deliberated by City Council next week, and it is expected to see approval by the super majority of ABC party members in City Council.

Currently, the CACs are determined by area-based CAC targets, negotiations between City staff and developers, or a combination of both. Rezonings not determined by CACs targets are performed through negotiation, which is typically the process for large-scale projects that generate the most CACs.

But the existing process of determining CACs by negotiation has contributed to housing affordability issues, given that negotiations can often be a years-long, drawn-out process. Some major developers have spoken out against Vancouver’s CACs systems for their unpredictability, and they no longer prefer to build within this city, instead choosing to build in suburban cities with simpler regulations.

Such reforms to CACs was also a promise made by ABC during the civic election campaign.

The motion directs City staff to come back to City Council before March 2023 with a report outlining a plan to implement the CACs reforms.

“The City’s current process for negotiated CACs can be lengthy and adds risk and cost uncertainties for housing providers,” reads Kirby-Yung’s motion.

“Fixed-rate CACs have proven to be a more streamlined approach for many projects. They not only speed up the delivery of urgently needed housing in the city, they simultaneously reduce risk and cost uncertainties for housing providers that are seeking to build new housing in the city.”

For the same reasons, a recent joint report by the provincial and federal governments analyzing BC’s housing woes recommended adopting fixed-rate CACs based on floor area.

It should also be noted that CACs are provided as either a financial contribution to the municipal government, an in-kind contribution, or a combination of both methods. An in-kind contribution refers to the practice of a developer funding and building the promised public benefit, such as constructing a childcare space or including social housing within their new building.

CACs are used to achieve facilities and infrastructure that may be aging or no longer meet the needs of the growing residential and workforce populations. For example, the forthcoming new replacement facilities for Vancouver Aquatic Centre and West End Community Centre will be funded by CACs — at least partially. Without CACs, the municipal government would tap more into its general revenues — such as increasing property taxes — and/or increase capital debt.

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.

One of the largest rezoning approvals by the previous makeup of City Council this year was the First Nations project of 21-acre Heather Lands, where 2,600 homes will be built. In exchange for the rezoning, the project will provide a $13 million financial contribution to the municipal government, plus a wide range of in-kind benefits.

As well, City Council greenlighted the rezoning for a 40-storey luxury condominium tower in the West End. Its $37-million financial contribution to the City will be one of the largest 100% cash CACs contributions in years.

The recently built Rainbow public park (corner of Richards and Smithe streets) was largely funded by the $8 million cash CACs contribution generated by the rezoning a decade ago for the TELUS Garden towers.

The City of Vancouver’s adoption of a fixed-rate system would bring its CACs process closer to the City of Surrey, which sets its CACs based on area-specific fixed rates — charged on a per square foot basis for apartments, and on a per dwelling unit basis for single-family homes and townhomes.

As an area-specific example, CACs within Surrey City Centre are currently $40 per sq ft per apartment, and $15,000 per single-family home or townhouse. Surrey’s clear predictability with CACs also more easily allows new and smaller entrants in the homebuilding industry.

The City of Burnaby has a negotiation process for its CACs, but it differentiates from Vancouver’s system as there is a time limit to conclude negotiations. More time for negotiations may be permitted with city council’s approval.

Want to stay in the loop with more Daily Hive content and News in your area? Check out all of our Newsletters here.
Buzz Connected Media Inc. #400 – 1008 Homer Street, Vancouver, B.C. V6B 2X1 [email protected] View Rules
Kenneth ChanKenneth Chan

+ News
+ Real Estate
+ Development
+ Politics
+ City Hall
+ Urbanized