ADMINISTRATIVE REPORT

Date: July 12, 1999
Author/Local: Dave Jackson /7904
RTS No. 0862
CC File No. 113

Council: July 27, 1999

TO:	Vancouver City Council
FROM:	City Building Inspector, in consultation with the Director of Finance and Director of Legal Services
SUBJECT:	Vancouver Building By-law Fee Amendment Reduction in Fees for Building Envelope Repairs

RECOMMENDATION

A. THAT Schedule "A" (Building Permit Fees) of the Vancouver Building By-law No. 6134 be amended to reduce application fees to the minimum value (currently $79.00) for repair work of building envelopes.

B. THAT the Director of Legal Services be requested to bring forward the appropriate by-law amendment.

GENERAL MANAGER'S COMMENTS

The General Manager of Community Services RECOMMENDS approval of A and B.

COUNCIL POLICY

It is current policy that building permitting and inspection services be provided on a cost recoverable basis.

PURPOSE

This report proposes to amend the Vancouver Building By-law fee schedule with respect to repair permits for building envelopes.

BACKGROUND

A problem of building envelope failures of 3- and 4-storey wood frame residential buildings was identified back in mid-1995. Council responded quickly in 1996 with changes to the Vancouver Building By-law adopting the latest national standard (Part 5 of the National Building Code of Canada, 1995) with some minor modifications to improve professional designer accountability and wall drainage performance. Since that time the City has hired a Building Envelope Specialist to work proactively with the industry to promote workable solutions and develop permit processing procedures compatible with our changing requirements.

Although new construction has gradually benefitted from Vancouver's improvement initiatives and subsequent industry changes (including the Homeowner Protection Office), envelope failures of existing residential buildings has become a major problem.

The cost of repairing leaky buildings has been significant, ranging from $10,000 to over a $1,000,000* per building. The economic consequences for strata title homeowners has been significant. Individual owner costs have been quoted from $10,000 to $50,000 and beyond.

In June of 1998 the Barrett Commission of Enquiry report made 82 recommendations to address the "leaky condo" problem. Recommendation #21 was "That municipalities waive building and permit fees on repairs related to building envelope." Some municipalities have offered some relief by reducing or eliminating building permit fees for these envelope repairs. Coquitlam, for example has eliminated these permit fees. Other municipalities have reduced these permit fees to their minimum, applied them only to some portion of the work, or not required permits.

In response to a report from the City Building Inspector dated July 14, 1998 Council directed that this issue of permit fee waiver be reported back. Consultation is underway with major stakeholders on another important Barrett Commission recommendation on FSR exclusions for better wall assemblies. This work will be reported in the fall.

DISCUSSION

Building permits are currently being issued for envelope repairs in the City and full permit fee is being charged. Limited staff time is spent on plan reviewing and processing these permit applications. Inspection time is also limited with major reliance being placed upon ongoing inspections by building envelope specialists.

*based on the values declared on permit applications.

Based on the nine most recent months of data prorated to twelve months the following information provides approximated yearly stats:

Number of repair permits	68
Total cost of repairs	$8,300,000*
Average cost per building	$122,000
Total permit fee revenue	$53,000
Average permit fee per building	$779

*based on the values declared on permit applications.

It is proposed to reduce building permit fees to the minimum value in the fee schedule ($79.00) for envelope repair projects as set out in Appendix A. This would reduce yearly revenue from envelope repair permits to about one tenth of the current total (i.e., $5,300 per year vs $53,000 currently collected).

The uncertainty of building permit revenue makes it difficult to determine what the impact of this relief would be on the 1999 Operating Budget, which anticipates revenues from building permits of $3.45 million. At present, revenues are running slightly ahead of expectations; however, one large permit can influence the final earnings for the year. Given that the estimated amount of relief is small relative to the budget, approving the recommendation will not likely have a significant impact on the Operating Budget at year-end. The impact in future years will depend entirely on the number of applications that are processed by the City and cannot be estimated at this time.

CONCLUSION

Building envelope failures have created a major economic burden for many condominium owners in Vancouver. Although reducing building repair permit fees to a minimum will not provide a significant impact, it is one small way the City can provide assistance to these owners.

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APPENDIX A

(Changes highlighted in bold and a vertical line in the left margin.)

SCHEDULE A

1. The fees hereinafter specified shall be paid to the City with respect to and upon the application for the issue of a PERMIT as follows:

¦ (a) Except as provided for in Clauses (b) and (j), for
¦ the CONSTRUCTION of any BUILDING,
¦ or part thereof:

When the estimated cost of the work, being
the valuation referred to in Article
1.11.2.2. of the By-law, does not exceed
$5,000 or for the first $5,000 of the
estimated cost of the work.................. $ 79.00

For each $1,000, or part thereof, by which
the estimated cost of the work exceeds
$5,000 but does not exceed $50,000......... $ 7.60

For each $1,000, or part thereof, by which
the estimated cost of the work exceeds
$50,000..................................................... $ 3.80

(b) For the installation, CONSTRUCTION, re-

construction, ALTERATION or repair of, or
ADDITION to, any CHIMNEY, FIREPLACE,
INCINERATOR, VENTILATING SYSTEM, AIR
CONDITIONING SYSTEM, or HEATING SYSTEM,
the fee shall be in accordance with Clause (a), except
that a fee shall not be charged when the cost of such
work is less than $500.

(c) For a PERMIT for temporary OCCUPANCY of a

part of a STREET, or of the AIR SPACE
immediately ABOVE a part of a STREET, in
accordance with Section 11.2 of this
By-law, the fee shall be for each 10 m² or
part thereof, of STREET or of AIR SPACE
immediately above such STREET to be occupied.... $ 1.55
Subject to a minimum fee of.................................... $ 52.00

Appendix A - Page 2

(d) For an OCCUPANCY PERMIT not required by this

By-law but requested............................................. $ 54.00

(e) For the demolition of a BUILDING, not including

a ONE-FAMILY DWELLING, which has at any time
since November 1, 1986 provided RESIDENTIAL
OCCUPANCY, subject to Section 3:

For each DWELLING UNIT........................ $1,000.00

For each sleeping room in a multiple
conversion dwelling, hotel or other
BUILDING, which is or has been a
principal dwelling or residence of a
person, family or household............................. $1,000.00

(f) For the demolition of a ONE-FAMILY DWELLING,

which has at any time since November 1, 1986
provided RESIDENTIAL OCCUPANCY, subject to
Section 3.......................................................... $1,000.00

(g) In addition to any other fees prescribed

by this Schedule:

(i) for the erection of a BUILDING

designed for RESIDENTIAL
OCCUPANCY, for every 10 m² o
floor space as set out in the
application for a PERMIT
under Clause (a)...................................... $ 3.70

(ii) for the erection of a BUILDING

designed for ASSEMBLY or
INSTITUTIONAL OCCUPANCY, for
every 10 m² of floor space as
set out in the application for
a PERMIT under Clause (a)..................... $ 4.30

Appendix A - Page 3

(iii) for the erection of a BUILDING

of more than 6 STOREYS in height
and designed for MERCANTILE,
office or INDUSTRIAL OCCUPANCIES,
for every 10 m² of floor space
as set out in the application for
a PERMIT under Clause (a).................... $ 4.30

(iv) for the erection of a BUILDING

of no more than 6 STOREYS in height
and designed for MERCANTILE,
office or INDUSTRIAL OCCUPANCIES,
for every 10 m² of floor space
as set out in the application for
a PERMIT under Clause (a).................... $ 3.10

(v) for the renovation or ALTERATION of,

or ADDITION to, a BUILDING described
in subclause (i), (ii), (iii) or (iv),
a fee of 10% of the fee otherwise
payable pursuant to Clause (a)

(h) For the extension of a BUILDING PERMIT by

Council where requested in writing by an
applicant pursuant to Sentence 1.11.5.1.(3)......... $ 636.00

¦ (j) For the repair of BUILDING walls pursuant to the
¦ requirements of Part 5 for any RESIDENTIAL
¦ BUILDING........................................................... $ 79.00

* * * * *

(c) 1998 City of Vancouver