Vancouver City Council to create policies that encourage new tech hubs

Samsung R&D Vancouver office at a South Flatz office building at 565 Great Northern Way. (Google Maps)

The tech industry has quickly become one of Vancouver’s economic strengths over the past decade, with the industry accounting for a high proportion of the job gains experienced over the past decade.

As of 2021, the number of jobs in Vancouver generated by the tech industry reached over 92,000, representing a two-year gain of more than 28,000 jobs or 44% — the most tech job growth amongst major North American cities.

With this in mind, Mayor Ken Sim is looking at ways to put the tech industry on an even stronger footing by changing land uses to make it easier to establish tech hubs, clusters, and districts in the city. Such hubs can span large geographical areas, but they are also often contained within a single building or multiple buildings in very close proximity.

Next week, Vancouver City Council will debate Sim’s member motion seeking permission to direct City staff to explore strategies to catalyze new tech hubs and clusters and strengthen existing districts. This includes potentially allowing tech uses within traditional lands and/or other new areas that are under renewal.

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“The economic well-being of our city and its ongoing future success, prosperity, and sustainability require that we not only have strategies to provide for, expand, and maintain lands and spaces to accommodate traditional industrial activities and businesses, but that we also ensure that we secure spaces for the integration and growth of high tech hubs and clusters in the city that drive innovation and entrepreneurship in the city’s tech ecosystem and are well-supported by access to capital, knowledge, and talent,” reads Sim’s motion.

“Many emerging tech and industrial tech businesses and their land use do not fit neatly within the traditional paradigm of ‘heavy’ or ‘light’ industrial use and may also be less impactful in terms of external nuisances while exhibiting and supporting non-traditional levels of employment density,” continues the motion, noting tech businesses typically require office space, production space, and/or logistical facilities. Sim’s definition of “tech” spans not just the traditional sectors of software and digital media within office space settings, but a broader umbrella that also entails clean-tech, light manufacturing, and biotech.

For example, in 2021, under an expedited review stream due to the project’s economic and medical importance, City Council approved AbCellera’s proposal to build its new headquarters and research and development hub within the protected Mount Pleasant Industrial Area. The biotech company’s campus will reach completion in two phases in 2023 and 2024.

Sim’s motion also seeks to integrate tech hub growth strategies with a broader strategy of modernizing and intensifying Vancouver’s industrial areas, which is outlined in a separate second motion by the Mayor that directs City staff to protect industrial and employment lands.

The directions of both motions would build on the City’s Employment Lands and Economy Review and Metro Vancouver Regional District’s Industrial Land Strategy, which both call for protecting and intensifying employment uses on industrial lands.

The motion states the municipal government is already looking at preserving employment and industrial lands near SkyTrain, including within the Broadway Plan area (primarily within Mount Pleasant) and through the upcoming area plan for guiding future developments on the industrial lands surrounding Renfrew Station and Rupert Station.

“Vancouver’s employment lands – particularly the city’s industrial lands – are under tremendous pressure from competing needs for space which has led to rising commercial and industrial rents in high-demand areas,” adds the motion. It should also be noted that over recent decades, Vancouver has wiped out much of its industrial land supply by allowing non-employment uses, particularly residential developments, including the area around Joyce-Collingwood Station and the East Fraser Lands (River District).

For years, Metro Vancouver as a whole has been facing a severe industrial space shortage, but this has been particularly evident within Vancouver, which pushed industrial businesses to suburban cities. New studio production spaces to grow the region’s film and television production industry are also being built outside of the city’s borders, mainly in neighbouring Burnaby.

According to CBRE, the region’s leased industrial space vacancy rate in 2022’s fourth quarter was 1.2%, representing a 0.4% increase from the previous quarter. The immense demand and supply shortage has pushed average industrial rents towards $21 per sq ft — up from $14 per sq ft in pre-pandemic 2020’s first quarter. Soaring rental rates have sent some businesses towards owning their own industrial space or looking for space outside the region.

There is currently 9.3 million sq ft of new industrial space under construction across Metro Vancouver, but 6.9 million sq ft is already pre-leased. About 1.4 million sq ft of space reached completion in 2022’s fourth quarter.

With the majority backing of his ABC Vancouver party’s city councillors, both of Sim’s motions are expected to receive approval. City staff will return to City Council by the end of the third quarter of 2023 on recommendations for both the tech hub and industrial land use strategies.

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