Adam Cooper is the Board Chair for the Urban Development Institute Capital Region
VANCOUVER ISLAND – Development is backlogged and difficult to navigate in most Vancouver Island cities, but some simple steps could streamline the process for everyone’s benefit.
Adam Cooper is the Board Chair for the Urban Development Institute Capital Region and shared key observations at the Vancouver Island Economic Developers Association Economic Summit that would solve major problems, including pre-zoning properties, properly financing city zoning departments, and eliminating Community Amenity Contributions (CAC’s).
“Cities use the rezoning process to extract amenities and resources from developers through CAC’s,” Cooper points out. “The province gives communities the right to negotiate for CAC’s from developers when they go for rezoning. This is different than Development Cost Charges, because they’re more prescriptive in nature and must be tied to capital expenditure programs for infrastructure like storm and sewer upgrades and park land acquisition that is needed for growth of the municipality.”
These would be eliminated if cities pre-zoned properties for development, eliminating the step at which CACs are extracted.
“CACs are basically a legislated horse trade, where the municipality can say the property is going to be worth more once the project is done, therefore we want to extract a portion of the wealth that is generated,” he explains. “The philosophy is that the benefits created through rezoning should be shared between the public and the developer.”
However, it adds a lot of time and an unnecessary step to the process, and Cooper notes that CAC programs are variable throughout the province, as some cities prefer cash, and others, affordable housing, for example.
“What are we desperately in need of in our communities – amenities or housing?,” he asks. “I would argue that housing is the higher priority, so we need a process that enables housing and reduces uncertainty in the process. Either eliminate CACs, or make them more prescriptive like a DCC program. Rather than protracted negotiations on every project, the community could establish a list of priority amenities that developers could contribute to.
“The province could introduce an amenity ‘bucket’ into the DCC program. This would give very clear guidelines for the developer at the start of the process, rather than negotiating at a public hearing about what the appropriate amenity contribution is. This could eliminate years of negotiating and community meetings about what amenities the community wants and the developer should contribute to.”
Vancouver Island is in dire need of more rental housing and pre-zoning land specifically for rental housing could help to attract rental housing developers.
“Pre-zone explicitly for rental housing,” he states. “In the last few years, the province introduced new legislation to municipalities, allowing them to rezone land not just for its intended use and density, but also for its tenure (market vs. rental). Rental Residential Tenure Zoning as it’s called, combined with higher densities for rental housing can make rental development competitive in the open land market against market housing builders, who can generally afford to pay more for land. This would help to make it work financially for those considering rental housing.”
Cooper explains that pre-zoning for rental creates a more even playing field where a rental builder can complete against a condo builder to win the bid for land in a competitive market.”
Not just that, but it is duly noted that some politicians are starting to attack Real Estate Investment Trusts (REITS), which are major developers of rental properties.
“REITS are the only ones well-capitalized enough to bring large volumes of rental units to market,” Cooper observes. “Mom and pop developers can often only afford to bring small-scale projects to market at a time. You can’t demonize REIT’s and also want to see significant numbers of new rental housing built. Besides, many REIT’s are managed by the pension funds of Provincial workers in this province, who are looking for stable long-term investments to protect the pension incomes of workers.”
Rent controls would put another damper on incentives for developers to build, and investors to invest, as it could eliminate their opportunity to earn a return on their investment in rentals.
Cooper also points out that zoning departments need to be more adequately financed.
“We haven’t kept up with hiring the amount of people who manage the approval process for new housing.” he observes. “Applications volumes are growing and the applications themselves are becoming more complicated. Municipalities need properly resources their planning departments in order to keep up.”
Making Official Community Plan updates mandatory would also help, he states, suggesting cities should be required to demonstrate how their OCP is meeting the community’s demand for growth, by linking them to the Provincially mandated Housing Needs Assessment Reports. Finally, Cooper says the entire process would benefit greatly if it was de-politicized.
“We’ll have to wait and see what the new Premier is going to do, because he has made it clear the status quo is not good enough.
“The province has released the DAPP Report that has a number of recommendations for how to unlock the process,” he adds. “We desperately need the housing in most cases, and we’re log-jamming it through the political and bureaucratic process.”
