Clearly there are many competing interests here.

I agree with Michael: no more ad hoc development. We must have clear definitions and ideas about what the whole of the West End and other communities are to look like.

I was talking to a young(er) architect the other day. She says that two considerations when building are sunlight (an already precious commodity here in Vancouver) as well as open space.

I, for one, do not fancy a Toronto-like model for the rest for the downtown peninsula.

p.s. I always share as much as I can get. That’s why I went into journalism! No fun keeping secrets to myself.

In the interest of full disclosure, I was at the April 2009 workshop called by the Mayor to discuss how best to encourage developers to build market rental housing. I was also involved, for a while, with the proposal to build rental units under STIR at Beach Towers in the West End.

Following the workshop, I posted on my blog my assessment of why rental housing was not being built, some of the solutions being put forward by others, and what I thought should be done. http://gellersworldtravel.blogspot.com/2009/04/rental-housing-in-vancouver.html

It’s interesting to see how my thoughts correspond to the program that was eventually created. You will note some similarities and one key contradiction.

The problem with the STIR program, in my opinion, was that the program was rushed, and not completely thought through, and the ‘negotiated stream’ was introduced without any rules or guidelines.

The first project through the door (Bidwell and Davie) asked for the moon, and got it, despite some very reasoned and articulate opposition from West End residents. In addition to a density bonus for the rental housing, it also received a density bonus for condos worth at least $3 million. Council approved this on the advice of staff that such a generous bonus was necessary. Otherwise the project might not be built.

The rental units are not being sold by Rennie. However, I understand it is the developer’s intention to sell them as a package to an investor.

The second project (1401 Comox) also asked for the moon, in the form of a 5 fold increase in the permitted FSR. As we all know, it is now going through further negotiations and revisions in an effort to address community concerns.

While there is no doubt that the Bidwell/Davie project was extremely generous to the developer, I do not expect to see such generosity offered again. At most, a developer will get a density bonus for the rental units, but not any condo units. Other important concessions could include parking relaxations, reduced or forgiven Development Cost Charges, and an accelerated approval process.

Many have suggested that the program should be cancelled since there is no longer a rental shortage in the West End or elsewhere in the city. While I have always argued that the CMHC vacancy rate figures are misleading, since they do not include basement suites and condos that are rented out, I believe there remains a genuine need for new rental units. And it is appropriate to encourage their construction now.

It would be great if they could be produced at less than market rents, but this is probably unrealistic. However, it is in our collective best interests to encourage developers to build market rental units, as long as the building designs fit in with their surroundings, since the demand for new rental housing is increasing, and more importantly, the overall rental stock is aging, and falling into disrepair.

For this reason, we should also have programs like RRAP (if you are young, you’ll need to google it) to encourage the renovation of older units as well.

Now is a good time to encourage new rental construction because the condo market is not as robust as it was, and we need to put contractors to work. Prices are good, and interest rates are low. HST is a problem, but that’s another story.

To those who think the program is overly generous, I would say just check how many are taking advantage of it….not so many. Why? Because the requirement that the units be guaranteed as rental for life makes them very hard to finance at current rental rates. That’s right. Many of you think rents are much too high. However, banks and CMHC are requiring developers to put up at least 35% equity, or more, to build new rental projects…even if the land is essentially ‘free’, given the thin economics of building rental housing.

For a 100 unit rental project, that could mean 8 million dollars in cash

So what should the city do? I think it should continue the STIR program, but it should bring in some guidelines, clarifying how much of a density bonus might be possible. At some of the meetings I attended, it was suggested that a site might be allowed to go to a maximum of 2 times the current zoning. That’s one possibility. Another approach might be to establish new thresholds, based on current zoning…eg 1.5 FSR can go to 3.0 but 5 FSR can only go to 7.5, or whatever.

The point is it would be helpful for everyone if there were some guidelines in place.

The city might also clarify when you get all the goodies…especially DCC forgiveness. My view is that not all projects should qualify for every benefit. Do we really want to give generous bonuses for 350 sq.ft. units renting at $2.70 a foot? I don’t think so.

But if someone is willing to build ground oriented family rental units, or offer units at rents below market, then they should qualify for DCC exemptions. (Although if you have read this far, and checked my blog, you will note that I initially argued against this aspect of the program.)

At any rate, I hope this is helpful…I do want to see the program continue for a while, but more importantly, we should SEPARATE the issue of the NEED FOR RENTAL HOUSING and APPROPRIATE INCENTIVES and the other issue of how to ensure that the new projects FITS ITS SURROUNDINGS FROM A PLANNING PERSPECTIVE.

Unfortunately, these two issues have become too intertwined.

A third issue, and not one I’m going to tackle now since the weather is too nice, is just who decides if a project meets important planning and design criteria…is it the person who lives next door to the proposed project? Is it the Director of Planning and his/her staff who have professional qualifications in the field? is it the broader neighbourhood in which the project will be built? and if so, is it the people who are looking for rental housing, or those who have it?
And what are the obligations of the elected officials…should they make a decision based on polling? Advice from staff? the neighbours? All of the above?

But that’s another story.

I hope this is helpful. Now I’m off to the beach.

(Unless, of course, you subscribe to the theory that the city is just giving stuff away to developers for free because, unbeknownst to us, Vancouver is really Miami and the whole place is corrupt and all the planners and councillors are in cahoots to let the developers run wild because they’re all being given free condos. As I say, I’m waiting for evidence on that one.)

1142 Granville

Site area: 8,993 sq. Ft.
Price paid: $3.47 million
Existing FSR 3.5
Proposed FSR: 5.72
Unit Count: 106
Total buildable sq. ft.: 51,439
Cost of land per sq. ft.: $386
Cost of land per buildable sq. ft.: $67.46

Summary:
Developer paid $386 per square foot of lot area, or $110 per “buildable” square foot under existing zoning. Developer requested a 63% density bonus to accommodate STIR rental housing, lowering land costs to $67.46 per “buildable” square foot of floor area.

1401 Comox

Site area: 17,292 sq. ft.
Price paid: $4.25 million
Existing FSR: 1.5
Proposed FSR: 7.43
Unit Count: 192
Total buildable sq. ft.: 128,494
Cost of land per sq. Ft.: $246
Cost of land per buildable sq. ft.: $33.07

Summary:
Developer paid $246 per square foot of lot area, or $164 per “buildable” square foot under existing zoning. Developer requested a 395% density bonus to accommodate STIR rental housing, lowering land costs to $33.07 per “buildable” square foot of floor area (almost exactly half the price at 1142 Granville).

I have heard that for sure some of the projects in the West End don’t have to be AS dense as they are. They could be lower, though there would be fewer rental apartments, but it could still work financially. Whether they would be feasible under the existing zoning, well, I don’t know and I suspect that no one does really.

Not sure what you mean by modest incentives to the business community? You mean developers? Like take the big negotiated projects off and offer only smaller chunks of incentives?

Once again, I will say this, though in vain. People in the West End have a good case to make about insisting that new projects fit into the neighbourhood and that they should get more information from the city about the trade-offs with the developer. Why muck it up with these bits of half-baked info?

You are wrong and failed to understand my argument. Please read the STIR program and understand its two streams: (1) Simple; and (2) Negotiated. The simple stream is for projects that do not request a rezoning.

What I promoted (above) was the STIR program’s simple stream (no rezoning). Even though STIR has the ‘super-size-it’ Negotiated Stream (rezoning), amazingly some developers have applyied for development applications under STIR under the simple stream.

Back when there were only 9 applications in the entire city, 2 of them were under the simple stream. I’m not sure how many there are now.

Quite literally, this means developers don’t need the density bonus provided by rezoning to build rental. That’s a fact.

Many of the developers currently applying through STIR’s negotiated stream may have applied through the simple stream if the negotiated stream did not exist, but likely couldn’t resist pursuing rezoning since it is offered on a silver platter.

Why not give modest incentives to the business community and see how they respond? Now it will be difficult for the city to scale back once expectations have been set.

According to Rennie’s group – the entire project is ‘for profit’. When they were contacted, they were unaware of STIR.

It seems the only rental units will be if an ‘owner’ decides to rent their place – and it will not be below market value.