Agenda Index City of Vancouver

POLICY REPORT
BUILDING AND DEVELOPMENT

TO:

Vancouver City Council

FROM:

Director of Development Services

SUBJECT:

Establishment of Lower Application Fees for Two Specified Categories of Small Development Projects

 

RECOMMENDATION

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

All changes in level of service are to be reported to Council.

Since 1991, Council has required that every Department/Board review services for which fees are now charged to ensure that fees are recovering the full cost of the services to the City, or are equivalent to competitive charges where the fee is of a market nature, rather than cost recovery.

Council policy as reflected in the Zoning and Development Fee By-Law, required the payment of appropriate fees for development permit applications.

PURPOSE

The purpose of this report is to propose amendments to the Zoning and Development Fee By-law to establish new, lower application fees for development permits involving two types of small projects.

BACKGROUND

Schedule 1 of the Zoning and Development Fee By-law establishes fees for development permits.

For many years, the fees for smaller projects did not capture the true costs of development permit processing, reflecting Council's desire to subsidize the costs of development applications for small projects. In the early 1990s, the fee by-law was significantly overhauled, especially in respect to one- and two-family dwellings. Fees were increased to recover costs for the increased processing required due to the adoption of more complex and discretionary residential zoning schedules through the late 1980s and early 1990s. Other fee provisions were also increased towards better achieving full cost recovery on all development permit applications, thus significantly reducing or eliminating subsidization of smaller projects. Subsequently in 1997 and 1999 the fee by-law was further amended to reflect prevailing inflationary conditions.

The Director of Development Services is committed to providing efficient and thorough development review services with cost recovery. In recent months, some members of the public have raised concerns regarding the application fees charged for what they believe are straightforward development applications. These concerns included:

1. Application fees which sometimes approach if not exceed the cost of the proposed improvement;

2. Application fees that deal with existing development that is non-conforming to the regulations where further additions or alterations are proposed;

3. Application fees that in terms of specific projects exceed the City's costs of providing the service.

In addition to these public concerns, staff are concerned that application fees may dissuade some applicants from applying for the required permits. This may inhibit many small projects, causing them to be abandoned, or undertaken without permits. These concerns have resulted in a review of the current fee by-law to determine the most appropriate fee structure for these situations.

DISCUSSION

The Manager of the Enquiry Centre has noted that since the inception of the Development Information and Application Centre (DIAC), and the Housing Renovation Centre (HRC) in 1993 and 1990 respectively, process improvements have evolved incrementally such that a broader range of conditional development permit applications are now processed over the counter. Previously, all conditional development permit applications, whether minor or complex, were processed through the more lengthy comprehensive review streams of the Processing Centre (the Development Applications Group component). The over the counter processing is principally the result of the additional staff expertise working at DIAC and HRC coupled with an explicit staff initiative to not encumber smaller projects with unnecessary review processes.

Two types of minor projects comprise the newly added over the counter permit approvals. One involves additions and alterations to existing one- and two-family dwellings and accessory buildings which require insignificant relaxations or validations of existing nonconformities. The areas of relaxation or validations most often concern yards, height, building depth, siting and location regulations. The other minor project type includes minor alterations to commercial buildings constructed prior to 1956. These smaller project types are discussed separately in this report.

The staff expertise at DIAC and the HRC are readily able to determine which development applications can be decided over the counter versus those that require a more comprehensive zoning review. However, Schedule 1 of the Zoning and Development Fee By-law requires the same fee be charged regardless of the processing required. Yet the over- the- counter processing is significantly less complex, requires less time and staff resources. Consequently two new fee categories are recommended for the two smaller project types that are now routinely processed over the counter.

Schedule 1 of the Zoning and Development Fee By-law has 37 separate fee categories for different types of projects. The fees reflect the average cost of processing to the City of Vancouver. Individual applications within a category may require more or less City resources in terms of staff time and related overhead. In theory, an almost limitless number of discrete categories could be created to define fees more closely reflecting the costs of processing all projects in a given category. This approach is not recommended because of the prohibitive time and costs required for a sophisticated cost accounting system to gather and analyze data, create a more complex schedule, and for the administration of such a schedule. Staff suggest an incremental approach to fee adjustments by addressing specific and immediate needs while focusing on maintaining a manageable fee schedule.

Minor Projects: One- and Two-Family Dwellings

The kinds of minor projects that have been incorporated into the over the counter permit stream require approvals that are easily decided upon. These projects typically include:
-carport enclosures including additions and alterations;
-garage additions and alterations;
-porch and sundeck additions;
-exterior alterations exceeding repair or maintenance work.

These projects do not include additions that contribute to the overall floor area of a principal building or change its fundamental massing. This omission is intentional. Additions that increase building mass, and which are conditional in nature either because a new relaxation is required or involve an existing nonconforming building, usually impact neighbouring developments and sites. Consequently a more comprehensive zoning review process including neighbourhood notification is required, making the process for these types of conditional approvals more complex and lengthy.

The processing costs to the City of over- the- counter minor conditional projects involving one-and two-family dwellings are similar to the fee assigned in the fee by-law to outright alterations and additions to one- and two-family dwellings. Consequently, this fee is also recommended for this new category of over the counter conditional permit applications.

Minor Projects: Commercial Buildings

Many projects involve commercial buildings constructed prior to June 18th, 1956 and consist of minor exterior alterations that are more than routine repair and building maintenance for which a building permit would suffice. These minor exterior alterations do not require the rigour of the full development application process. Again, staff at DIAC facilitate the processing of these kinds of applications over the counter. Otherwise these projects would also be processed with the more complex projects in a full application review.

The June 18th, 1956 date noted above marks the adoption of the Zoning and Development By-law No.3575 and the requirement for development permits in the City of Vancouver. This is significant in that minor alterations to a building constructed under development permit may be dealt with under the minor amendment provisions of the fee by-law. These fees are significantly less than charged for applications exceeding the complexity of a minor amendment. Minor alterations to buildings constructed prior to the requirement for a development permit cannot be dealt with under the minor amendment provisions as there is no development permit for the original building. Consequently these projects are charged under another provision of the fee by-law which deals with more complex alterations and for which the fee is more than that for a minor amendment.

The processing costs to the City of these over the counter minor projects are similar to the cost of processing a minor amendment for a comparable development built under a development permit. Staff recommend a new fee category for this type of minor project.

RECOMMENDED AMENDMENTS TO THE ZONING AND DEVELOPMENT FEE BY-LAW

Staff recommend that amendments be made to Schedule 1 of the Zoning and Development Fee By-Law as noted in Appendix A, to allow for a lower "smaller project" fee as described in this report.

FINANCIAL IMPLICATIONS

The financial implications of implementing the recommended changes to the Zoning and Development Fee By-law are expected to be revenue neutral. The City will lose some revenue in charging a more appropriate fee for some of the work that is being undertaken in the conditional approval stream. The City will also gain revenue in having a conditional fee that is more commensurate with some of the small projects that are currently undertaken without permit because of the high cost of approval. In addition, some work may now be initiated that had previously been abandoned because of the application fees.

In 1999, 167 permits were issued for the small one- and two-family dwelling projects to which the new proposed fee would be applicable, as noted in Appendix B. Approximately fifty percent of these projects could fall within the lower application fee recommended, resulting in a net decrease in fee revenue of approximately $39,000. Because there is no fee category for alterations to commercial buildings, it is estimated that 100 to 150 permits for this type of work were issued in 1999 that could be subject to the recommended reduced fee. The effect of the new lower fee recommended for this work would reduce revenue; however, staff expect that the new lower fees recommended would encourage more applications for permits, and decrease work without permit, thereby making the proposed changes revenue neutral.

Notwithstanding the general policy of seeking full cost recovery for services provided, Council may choose to establish lower application fees for some or all of the above noted project categories that do not fully recover processing costs. If Council chooses to do so, either to accommodate these smaller projects or to discourage work being done without permits, the deficit in cost recovery would be borne by other sources of City revenue.

CONCLUSIONS

In streamlining the development review process, additional staff expertise has resulted in pinpointing some smaller projects that are unnecessarily being charged higher fees for an unneeded review process. These amendments to the Zoning and Development Fee By-law will result in lower costs to the many "small project" applicants, more reflective of the processing time now required.

- - - - -

APPENDIX A

RECOMMENDED AMENDMENTS TO THE ZONING AND DEVELOPMENT FEE BY-LAW

1. Amend 1A. (b) by adding a comma after the word "Section 1A(a)" and then adding the words "and Section 1D." after the comma.

2. Add new Section 1D:

Except as provided for in Section 1B, for an addition or alteration to an existing one-or two-family dwelling or to its existing accessory building where the existing one-or two-family dwelling or accessory building is nonconforming to regulations except for building area, any floor area or site coverage and that the existing front and/or rear yards are not less than 60 per cent of that required, and the addition or alteration is less than 60 m2 in gross floor area:

(a) where the addition or alteration by itself complies as an outright.....$232

(b) where the addition or alteration is for a porch or sundeck only with no relaxation of regulations except for required yards or building depth and does not create any new floor area.....................$232

(c) exterior alterations without any additions and where the permit would be issued as a conditional approval.............$232

3. Add new subsection (c) to Section 4:

(c) Where the alterations are to not more than one storey of a building for which there is no original development permit, and the alterations would otherwise qualify as a minor amendment under section 11 of the Zoning and Development Fee By-law:

-25 per cent of the fee that would, except for this provision, apply (with a minimum fee of $152.00)

APPENDIX B

Development and Building Application and Permits for One- and Two-Family Dwelling Conditional Approvals-January 1, 1999 to December 31, 1999

Approving Group

One - and Two - Family Dwelling Conditional Approval

Number of Permits

DIAC

$11, 625.00

25

ADESC P & L H/C

$ 1, 395.00

3

P & L PC ASST.

$64,170.00

138

P & L June 9, 2000PPRT II

$ 465.00

1

TOTALS

$77,655.00

167

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ag000704.htm

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