Agenda Index City of Vancouver

POLICY REPORT
HOUSING

TO:

Vancouver City Council

FROM:

Director of the Housing Centre and the Director of Current Planning

SUBJECT:

CD-1 Text Amendment - 1650 Bayshore Drive (Bayshore Gardens)

 

RECOMMENDATION

OR, if Council does not wish to approve Recommendations A and B, the following is presented for Council's CONSIDERATION:

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

Council requires that 20% of the units in major projects be designated for non-market housing, with a priority for core-need households, and requires that the non-market housing sites be made available at a price that allows the projects to be developed within the maximum budgets established by senior government non-market housing programs. At least half of the non-market units must be designed and developed for families. The 20% policy has been relaxed for major projects where economic feasibility or other public priorities do not permit the full 20% non-market housing requirement to be achieved.

Council policy is to consider affordable housing proposals not subsidized through senior government programs, or payment-in-lieu, for non-market sites that were submitted for senior government funding and did not receive it, or if there is little likelihood of funding forthcoming. The zoning for the major projects allows Council to define and approve such non-market housing initiatives as circumstances require.

PURPOSE AND SUMMARY

This report recommends referral of amendments to the CD-1 for Bayshore Gardens to convert non-market residential floor space to market residential floor space, thereby reducing the non-market housing requirement from 150 units to 53 units, in return for payments to the City with a total value of $2,000,000.

The amendments respond to the lack of Homes BC funding for Bayshore's non-market housing, as the funding available in 2001 has been allocated to other projects and future funding is uncertain. The City has an agreement with Bayshore that if funding is not available when required for adjacent market development to proceed, Council will consider alternatives. As the non-market site Building H is physically integrated with the parking garage for the adjacent market project and the hotel across the street, conversion of Building H to market housing in exchange for a payment-in-lieu is recommended.

The reduction in the non-market housing component of Bayshore from 20% to 7% is a serious concern, though in the context of the larger Coal Harbour neighbourhood, the reduction is less, from 21% to 17%. It is recommended that the cash component of the payment-in-lieu be invested in affordable housing in the general area (north of Robson, west of Bute) to ensure that the income mix objectives for the area are achieved to the greatest extent possible.

The physical integration of the non-market site with the parking garage makes phasing the development difficult and therefore holding on to Building H for future development problematic. Three possible responses to the phasing difficulty were explored.

The first would require the developer to build the podium for Building H so that the opportunity is preserved to build it out for non-market housing in the future. This is a costly and risky proposition and is not recommended.

The second would convert the west half of Building H to market housing and leave the east half as non-market housing to be built in the future. This is feasible as it is the west half of the parking garage that will proceed now, and therefore only the west half of Building H that needs to be converted. This would reduce non-market housing in Bayshore to 10.7%, and generate a $1,000,000 payment-in-lieu value to the City which would take the form of a commitment by Bayshore to build the remaining non-market site in Bayshore at 93% of Homes BC's maximum budget. There are design issues with this option and it is presented for Council's consideration.

The third option would convert all of Building H to market housing, with a reduction in the non-market housing component of Bayshore to 7% and a payment-in-lieu totalling $2,000,000. The payment in lieu would take the form of a commitment by Bayshore to develop the remaining non-market site at 90% of Homes BC's maximum budget worth $950,000; the City not having to pay the 25% of the land cost ($500,000) it now has to pay; and a cash payment to the City's Affordable Housing Fund of $550,000. This resolves the design issues in the second option, and is recommended.


BACKGROUND

On February 6, 1990, Council approved the Coal Harbour Policy Statement. It established policies requiring that 20% of the units in Coal Harbour be developed for core-need households under non-market housing programs with at least half the non-market units for families with children.

At the November 21, 1991, Public Hearing Council approved the development of up to 980 housing units on the Bayshore site (Denman to Cardero north of Georgia), with 230 units to be rental housing, and 20% of the remaining units to be non-market housing (150 units with at least 75 for families). At that time approximately 127,000 sq. ft. of floor space was allocated to the non-market housing, which, based on further design work, was subsequently reduced to 108,700 sq. ft. of floor space. The CD-1 for Bayshore Gardens (Bylaw No. 7232) was enacted on November 9, 1993.

The non-market housing was integrated into the market housing along Cardero and the future Bayshore Drive. Both the non-market and market housing were to be built above a parking garage that would serve the existing Bayshore Hotel to the north as well as the housing above. Two condominium towers were sited over the non-market housing. As the market and non-market housing had to be built at the same time, and there was no assurance that funding for the non-market housing would be available when the market component was ready to proceed, the Bayshore Inn Social Housing for Families and Seniors legal agreement includes a clause stating that:

"The parties acknowledge that the Owner intends to construct market housing above and below the Parcels and that this agreement is not intended to prohibit or delay such development of the Lands by the Owner. Accordingly, if at the date the Owner makes a complete bona fide application for a development permit seeking permission to develop the Lands neither a Conditional Unit Allocation nor a Project Commitment has been issued and remains current for Projects in the Parcels or if the present social housing policy of the City is amended after the date of this agreement, the Owner shall be at liberty to apply to the City's Council for consideration of alternate ways and means of fulfilling the social housing obligations set at the November 21, 1991, public hearing approving the rezoning of the Lands."

At the May 18, 1999, Public Hearing Council approved amendments to the Bayshore Gardens CD-1 to reorganize the quadrant containing the non-market housing sites. The terraced market tower was redesigned as a point tower, and the rental tower was moved off of an underground right-of-way reserved for future transit. The non-market housing was split into two separate parcels, Building H with 55,600 sq. ft of floor space and Building J with 53,100 sq. ft., and pulled out from under the two condominium towers. The intent was to allow the market and non-market housing to be as independent as possible. However, the two non-market parcels would still be airspace parcels located above the 831 space parking garage serving the hotel across the street as well as the approximately 400 housing units above. Bylaw No. 8203 implementing the amendments was enacted on May 30, 2000.

CURRENT SITUATION

The development of the quadrant south of the Bayshore Hotel is underway. Building D, at the corner of Cardero and Georgia, is a 165 unit rental project now under construction. A development permit application has been submitted for Building G which will contain 76 market units (DE405699 - 1650 Bayshore Drive).

While designing Building G, it became apparent that developing Building G and Building H, the non-market housing site immediately adjacent to G, independently would be very difficult. The difficulty arises from the need to phase the parking garage below. At present the east half the parking garage has been built, with the exception of the roof of the top floor which will be the podium for the housing to be built above. This portion of the parking garage is currently providing the parking required by the hotel. The west half of the parking garage is to be built at the same time as Building G. Only when the west half of the parking garage is operational can construction proceed above the east half as it must be closed while construction proceeds.

The problem with Building H is that it straddles both the east west halves of the parking garage. Its development must be phased, which would make development difficult even if funding for the non-market housing was available. At this time, however, funding for non-market housing is not available, as the funding allocated by BC Housing to Vancouver for next year is being invested in the Woodwards redevelopment, with only limited funding for smaller projects e.g. 12 units for the YWCA's Crabtree/Sheway development on East Hastings, and funding beyond next year is uncertain. Consequently, some resolution is required to Building H in order for the development of Building G to proceed. Three alternative approaches were identified.

ALTERNATIVE APPROACHES

1. Construct the west half of the podium for Building H now, and build the rest of Building H once both the east and west halves of the parking garage have been completed.

Council could require that Bayshore just build the podium for the portion of Building H that is above the west half of the parking garage now, as part of the development of Building G. The east half of the podium for Building H would be constructed when Building I is developed. The non-market housing would be developed on the full podium when funding becomes available, which could be several years into the future.

There are several problems with this option. First, it is not possible to design Building H now, as housing programs are likely to change in the future. The podium, however, needs to incorporate the circulation (stairs and elevator core) and servicing (water, power, etc.), as well as provide the structure for the future housing. Inevitably some of the servicing built into the podium will need to be relocated, some of the structure will have to be augmented, and circulation may need to be reworked to the extent that is possible. This will increase the costs of Building H. Similarly, if funding for non-market housing is not available, the cost of converting Building H to market housing will also increase, and the payment-in-lieu that the City could derive from the conversion would be less than what it would be today.

Second, Building H sits above the entrance to the parking garage, and it is likely that the parking garage would have to be closed during its construction. An extended closure would not be feasible as the parking garage is required by the hotel's guests. Assuming the parking disruption could be limited to a degree acceptable to the hotel, managing the construction while the garage remains open will also increase the costs of Building H.

Third, given the lack of funding available now, and the uncertainty surrounding the current Homes BC program, development of Building H could be delayed for some years. If development of the podium proved not to be feasible, it could end up as an eyesore for some time. In short, this is a high risk option and is not recommended.

2. Accept a payment in lieu for the west portion of Building H, and develop the reduced non-market Building H when Building I is developed.

The second option is to allow the component of Building H above the west half of the parking garage to be converted to market housing. This would be a conversion of 28,912 sq. ft. of floor space. As market housing is worth approximately $70/sq. ft. of floor space in this location, and the price of the non-market housing is currently $35.87/sq. ft., the value of this conversion is approximately $1,000,000. This would be taken as a commitment by the developer to build the remaining non-market housing on the site (the west half of Building H and Building J) at a reduced cost. Based on the current maximum price budgets established by Homes BC program this would require the developer to build the non-market housing at 93% of the maximum budgets. This might be sufficient to ensure that Homes BC funding is available for the projects assuming that the Homes BC program continues, though the standard discount that has evolved through the past non-market housing partnerships between the City and the Province is a discount to 90%. This option is feasible, and it is the basis of the current development permit application for Building G. It would result in 79,800 sq. ft. of floor space for non-market housing which could accommodate 80 to 130 units depending on the mix of family and singles/couples units.

There are two design problems with this option. The first is with the design and function of the internal open space. The internal open space in this quadrant has been a difficult design problem throughout the evolution of the Bayshore Gardens. Under the present arrangements, it is shared by five different buildings. Building I, because it is locked into the corner of Bayshore Drive and Cardero, has no open space immediately adjacent, and has been allocated the central part of the internal open space, with access between Buildings H and J (see Appendix C attached). Building I's open space would not look private but would look as if it should be used by all the buildings overlooking it, and could be a source of friction between the surrounding projects.

Under this option, both the east half of Building H and Building J would logically be built when the construction of the market tower Building I proceeds. They would be developed as a single project with a common sponsor and funding allocation. Since Building I's access to its open space separates the open space for Buildings H and J, access between them would not be possible under the current design. The proposed solution is to build a pedestrian bridge linking Building I to its open space, under which would be a walkway connecting the two non-market components. This is feasible but is not a preferred arrangement as it will increase the design and functional problems facing the central open space, and the potential for friction between the surrounding projects.

The second problem is the frontage along Bayshore Drive facing the existing hotel. The component of Building H that would be developed as market, as part of Building G, should take the form of townhouses. However, Building H is currently designed as a five storey apartment building in order to accommodate the required floor space for the non-market housing. The side by side relationship between the townhouses, with their street access and lower scale, and the apartment, with its single entrance and bigger mass is awkward (see Appendix D attached).

Both of these design issues were of particular concern to the Urban Design Panel when the design for Building G was reviewed.

This option is presented for Council's consideration.

3. Accept a payment in lieu for all of Building H.

The third option would convert all of Building H to market housing. This would be a conversion of 55,600 sq. ft. of floor space with a payment-in-lieu value of $2,000,000. This would take the form of a requirement that the developer build Building J at 90% of the maximum budgets under the Homes BC program (worth $950,000), relieve the City from having its 25% share of the land price (worth ($500,000) and pay $550,000 into the City's Affordable Housing. Fund upon enactment of the amendments to the CD-1.

The benefit of this option is that it would allow all of Building H to be developed as townhouses (half as part of Building G and the other half as part of Building I), allow the design of the central open space to be simplified, increasing the amount of open space for the non-market housing Building J, and reduce the cost of Building J to 90% of maximum budgets which should be sufficient to ensure Homes BC funding as long as the program continues. As the Bayshore childcare is to be built on the roof of Building J, it is important that Building J proceed and that it compete successfully for Homes BC funding assuming the program continues.

The cost of this option is that it would reduce the non-market housing component from 150 units (half family) under the current zoning to 53 to 88 units depending on the mix of family and singles/couples units. If 53 family units are developed in Building J, this would be mean that 7% of the units (excluding the market rental units) in Bayshore Gardens would be non-market housing. With the uncertainty of future funding for non-market housing, it is recommended that the City retain the flexibility to develop whatever mix of units in Building J as may be appropriate under the circumstances.

With some reluctance, Option 3 is recommended. It will result in a better designed project, and one that is more likely to be funded, but at the cost of a substantial reduction in the proportion of non-market housing in Bayshore.

As a condition of this amendment, the developer will be required to submit a preliminary development permit for Buildings I and J prior to enactment. This is to ensure that all the design issues are addressed, and an application can be made for Homes BC funding so that construction of the non-market housing project can proceed at the same time as Building I. The developer has been advised that the Director of the Housing Centre is unlikely to support any further conversion of non-market housing. Even if funding from Homes BC is not available, the payment in lieu from Building H should be sufficient to ensure that the City's affordable housing objectives for Bayshore Gardens can be achieved, at least to some degree, through some other affordable housing initiative or program.

INTEGRATED NEIGHBOURHOODS

The City has a long standing objective of creating integrated neighbourhoods which accommodate households of differing incomes, lifestyles and household structure, with the City's 20% non-market housing policy intended to achieve income mix for new neighbourhoods. A reduction from 20% to 7% in the non-market component represents a significant reduction in Bayshore Gardens' income mix. Within the context of the emerging Coal Harbour neighbourhood of which Bayshore is a part, however, the reduction is less, from 21.18% non-market housing, under the current Coal Harbour ODP and Bayshore Gardens CD-1, to 17.71% if all of Building H is converted to market and the minimum 53 non-market housing units are built in Building J.

The City has adjusted the percentage of non-market housing in the new neighbourhoods in the past in response to changing circumstances and housing programs. The percentages have been adjusted in Marathon's Coal Harbour development, CityGate and Concord Pacific Place to respond to reduced funding availability and provincial housing priorities. As the new neighbourhoods are long term projects, it is not surprising that adjustments to the planning concepts and consequential zoning amendments will be required.

The Marathon and Bayshore Coal Harbour areas, as they develop, are becoming functionally integrated with the upland Triangle West area such that, in future, these areas north of Robson Street will merge as one coherent community. It will be important to maximize the income mix in this new context (Triangle West, Coal Harbour, Bayshore), and staff will be

reviewing the opportunities to enhance the income mix in this area. To ensure these opportunities can be realized, the Directors of Current Planning and the Housing Centre recommend that the $550,000 payment to the City's Affordable Housing Fund, required if all of Building H is converted to market housing, be designated for affordable housing north of Robson and west of Bute.

CONCLUSION

The report presents options for resolving a difficulty in phasing the development of one of the non-market housing sites in Bayshore Gardens. It is recommended that the City accept a payment in lieu for the site worth $2,000,000 in return for permitting the site to be converted to market housing. The remaining non-market housing site in Bayshore Gardens could accommodate 53 to 88 units depending on the mix of family and singles/couples units. The number of non-market units in Bayshore Gardens would be reduced from 150 (half for families) to a minimum of 53 units, if all are family units, with the flexibility to build up to 88 units depending on the ultimate unit mix. The payment-in-lieu will be used to reduce the cost of the remaining non-market housing site, and to provide affordable housing elsewhere in the area, to ensure that a mix of housing is achieved.

- - - - -

PROPOSED CHANGES to CD-1 Bylaw No. 7232 - 1650 Bayshore Drive (CD-1 #321)

4 USES

(a) a maximum of 980 residential dwelling units provided in multiple dwellings or in conjunction with any of the uses listed below, provided that:

· a minimum of 21 percent shall be for family housing, all of which shall be designed in accordance with the Council-adopted "High-Density Housing for Families with Children Guidelines";

Conditions of Enactment

THAT, prior to enactment of the CD-1 Bylaw, the Bayshore Inn Social Housing for Families and Seniors Agreement be amended to:
· delete Lot M from the Lands and the non-market housing parcel located on Lot M and Lot V (Building H) from the Parcels,
· require that a minimum floor space of 53,100 sq. ft. to be provided for the remaining non-market housing parcel on Lot V (Building J),
· require that a minimum of 53 family units or 88 units for singles/couples or some mix of units greater than 53 or less than 88 be provided at the discretion of the Director of the Housing Centre,
· require the owner of Lot V to build the non-market housing in Building J at 90% of the maximum budget that would be permitted for the project under BC Housing programs,
· replace the $30 per square foot of floor space option price for Building J with $22.50 per square foot of floor space, all of which is to be recovered by the owner of Lot V from the BC Housing programs and none of which is to be paid by the City,
· deletion of Section 4 of the agreement, and
on such other terms and conditions as may be required by the City's Director of Legal Services and Director of the Housing Centre.

THAT prior to enactment of the CD-1 Bylaw, the Bayshore Open Space Agreement be amended to reallocate the open space on terms and conditions to the satisfaction of the City's Director of Legal Services, Director of Planning and Director of the Housing Centre.

THAT prior to enactment of the CD-1 Bylaw, the owner of Lot V pay $550,000 to the City's
Affordable Housing Fund.
THAT prior to enactment of the CD-1 Bylaw, the owner of Lot V submit a preliminary development permit application to the City for all of the development on Lot V in form and content to the satisfaction of the Director of Planning and the Director of the Housing Centre.

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