CITY OF VANCOUVER

POLICY REPORT

 

Date:

August 5, 2003

 

Author:

Trish French

 

Phone No.:

604-873-7041

 

RTS No.:

03037

 

CC File No.:

113

 

Meeting Date:

September 9, 2003

TO:

Vancouver City Council

FROM:

Director of City Plans

SUBJECT:

Amendments to the C-2 District Schedule and Guidelines

RECOMMENDATION

A. THAT the Director of City Plans be instructed to make application to:

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

Levels of community side support were as follows:

PURPOSE AND SUMMARY

This report recommends that amendments to the C-2 District Schedule as contained in Appendix A be referred to Public Hearing. Appendix B contains the draft Guidelines which would be brought forward for adoption at the time of enactment of the District Schedule.

C-2 zoning covers about 1500 parcels along arterials throughout the city. In 1989, in response to a housing shortage, Council approved a zoning change that increased the permitted residential density by two and a half times, making 4 storey mixed use residential/commercial projects economically viable. (C-2 also continues to permit all-commercial development at this same overall density on an outright approval basis.)

Since the zoning change, about 3000 housing units have been built. However there have also been many complaints from the public, particularly from the residents of single-family houses and duplexes located behind C-2 in most cases. The four completed Community Visions all contain Directions to improve mixed use development in C-2 zones.

In 2000, City Council approved a C-2 Zoning Review. The year-long study was undertaken by consultants Neale Staniszkis Doll Adams Architects and Tandem Consulting, and it was completed in the spring of 2002. The study process combined technical analysis and consultation at each step with the key interested groups-C-2 owners and adjacent owners. Groups like the Urban Development Institute, Architectural Institute of BC, and National Association of Industrial and Office Properties were also part of the consultation. Four mailings (to 9000+ names), two sets of open houses, a mail back survey and a random telephone survey ensured that the full range of views was taken into account.

The consultant recommendations for changes to heights, setbacks and densities reflect the "middle ground" between the C-2 owners who wished to see minimal change to the zoning, and the adjoining owners who supported major change, i.e. taking the permitted development height down from four to three storeys.

The proposed zoning changes reflect the consultant recommendations, as well as some updates to the District Schedule to bring it into line with more recent Schedules. The proposed changes are summarized as follows.

1. Larger rear setbacks and lower height on the rear of the site, together with landscape screening, will reduce overlooking of neighbours' yards, and enhance the appearance at the lane.

2. A 0.6m (2 ft.) front setback will allow better building massing and more sidewalk space. A 2.4m (8 ft.) setback at the fourth storey will reduce the apparent scale of the buildings on the street.

3. Increased height is proposed on the front of the site: a maximum height of 13.8m (45 ft.) measured horizontally. Currently the limit is 12.2m (40 ft.) measured to a sloping "base surface", but many projects request and receive a relaxation up to 13.8m (45 ft.). Staff support the 13.8m (45 ft.) because:

The divergent opinions of the C-2 owners and adjacent owners regarding the changes to heights, setbacks and massing are noted above. Respondents have also raised questions about the reduction in C-2 land values and the effect on overall City housing capacity; and made a number of suggestions that fall outside the scope of the zoning review. Information on these points is included in the last section of the report.

BACKGROUND

1. Existing C-2 Zoning

C-2 zoning occurs along arterials throughout the city, covering about 1500 parcels. (Refer to map 1.) C-2 is generally backed or flanked by RS or RT zoning, occupied by single family houses and duplexes. C-2 permits both mixed use residential/commercial projects and all-commercial projects, generally in a 4 storey form. Maximum density is 3.0 FSR for all uses combined, including a maximum of 2.5 FSR for residential.

Background to C-2 Zoning Review

In 1989, in response to a housing crisis, Council substantially increased residential density in C-2. By removing a requirement that every square foot of residential be counted as two and a half square feet, mixed use residential/commercial developments were made viable. At the time, there was no public consultation.

Since the zoning change, about 3000 new housing units have been built in over 180 projects. However, C-2 developments have also generated many complaints to staff, representations to Council, and Board of Variance appeals from residents throughout the City. The concern has also shown itself in the strong support for Community Vision Directions on improving the mixed use development in C-2 (see Council Policy above).

The main issues have been the impacts of massing (heights and setbacks) of the four storey buildings on their single family and duplex neighbours; the visual scale of buildings along the shopping streets; and the quality of design and materials of some projects.

In 1998, Council supported some changes in guidelines and processing:
- directing staff to follow the Guidelines when they are more stringent than the Schedule;
- elimination of a little-used Guideline provision allowing consideration of heights more than 5 storeys;
- instruction that projects should be reviewed by the Urban Design Panel; and
- instruction that height relaxations should be reviewed by Council.

They also asked staff to report back on doing full zoning review.

The Council-approved objectives of the C-2 Zoning Review (Part 1) were to:

- revise project massing (height, setbacks, density, articulation) to achieve better neighbourliness and streetscape;
- address some architectural design aspects related to pedestrian friendliness, quality of design and materials; and
- address issues specific to C-2 sites located adjacent to R-zoned sites with no lane in between.

Because of commitment of staff to other projects, the C-2 Zoning Review was done as a consultant study. The team of Neale Staniszkis Doll Adams Architects and Tandem Consulting were hired to do the study and associated public process. They completed it in the Spring of 2002.

A staff report to Council outlining the consultant study recommendations was considered in October 2003. Some delegations felt they had not had sufficient opportunity to consider the recommendations, or to make their views known. Therefore Council directed that, prior to referral of new zoning to Public Hearing, staff should "conduct a workshop(s) on the matter for the information of..." the delegations, C-2 property owners, the Urban Design Panel, and other interested parties. The information session (attended by 15 people) and Urban Design Panel review took place in Spring 2003. Staff then proceeded to draft the revised District Schedule and Guidelines for referral to Public Hearing.

DISCUSSION

1. C-2 Zoning Review

The year-long consultant study combined technical analysis and problem-solving with extensive public consultation. The study's technical content and recommendations were covered in the previous report to Council. The full consultant report is available on the City's website at www.city.vancouver.bc.ca. The most important points are covered in the next section of this report, describing the proposed zoning changes. The summary of study steps and consultation below demonstrate the study's comprehensiveness.

Consultation focussed on communicating directly with the two interest groups most affected by the study: the C-2 owners and the owners of adjacent properties. Interested groups such as Urban Development Institute, Architectural Institute of BC, National Association of Industrial and Office Properties, Greater Vancouver Home Builders Association, and the Real Estate Board of Greater Vancouver were also included in all mailings.

The Review steps were:

1. Preparation:

- recruitment of a seven member Advisory Group including C-2 owners, adjacent owners and C-2 developers who helped ensure all issues were covered, solutions explored, and outreach materials understandable;
- review of data on all C-2 projects completed since 1989;
- detailed analysis of 25 projects;
- identification of issues.

2. Drafting of ideas and options to address identified issues.

3. Public review of issues, ideas and options:

- mailing #1 to 9000+ C-2 owners, adjacent owners, and interested groups, and advertisements in local newspapers: outline of study, invitation to first round of open houses;

- 3 open houses, in different parts of the City: discussion of issues, ideas and options; responses collected;
- meetings with a group C-2 architects, and with relevant staff: discussion of issues, ideas and options.

4. Development of Alternative Zoning Scenarios:

- selection of broadly supported ideas and options as "common directions";
- development of 4 alternative zoning scenarios reflecting the range of opinion on heights, setbacks and densities (See Table 1);
- testing of scenarios through project designs, proforma analysis, housing capacity estimates.

5. Public review of common directions and alternative scenarios:

- mailing #2 (9000+): invitation to second round of open houses; advertisements in local newspapers;

- 3 open houses, in different parts of the City: review of 4 alternative scenarios for changes to the zoning;

- mailing #3 (9000+): description of 4 alternative scenarios; mail back survey and random telephone survey of C-2 owners and adjacent owners;

- meeting with relevant staff.

6. Drafting and Finalization of Consultant Report:

- writing of study report with recommendations for zoning changes, based on Scenario B and C;

- mailing #4 (9000+): summary of consultant's final recommendations, availability of full report, explanation of next steps.

As anticipated, the mail-back and random telephone surveys in step 5 indicated that the C-2 owners' first choice was Scenario A, the option that had the least change from the current zoning. The neighbouring owners' first choice was Scenario D, which proposed the most change: reducing development to 3 storeys. The groups' second preferences were Scenarios B and C, respectively. These are the same in all respects except that B has a 45 ft. maximum height on the front of the site, while C has a 40 ft. maximum. The consultant study recommendations were based on Scenarios B and C.

Table 1 C-2 Zoning Review Consultant Study: Alternative Scenarios for Heights, Setbacks and Density

 

Current C-2

Scenario A

Scenario B & C *

Scenario D

Normal Height

Storeys

4

4

4

3

Feet

12.2m (40 ft.)

+ 1.5m (5 ft.) relaxation

12.2m (40 ft.) on rear
13.8m (45 ft.) on front

10.7m (35 ft.) on rear
13.8m (45 ft.) on front (B) or
12.2m (40 ft.) on front (C)

10.7m (35 ft.)

Rear Setback

ground level, when parking or commercial

0

0.6m (2 ft.)

0.6m (2 ft.)

0.6m (2 ft.)

ground level when residential; 2nd & 3rd level

4.6m (15 ft.)

6.1m (20 ft.)

6.1m (20 ft.)

6.1m (20 ft.)

4th level

4.6m (15 ft.) +

7.7m (25 ft.)

10.7m (35 ft.)

na

Maximum Density

Overall (all uses combined)

3.0 FSR
(2.68 average achieved)

2.75 FSR

2.5 FSR

2.0 FSR

Residential

2.5 FSR
(2.15 FSR average achieved)

2.4 FSR

(2.0 FSR on 3 levels + 0.4 optional on ground level at rear)

2.15 FSR

(1.75 FSR on 3 levels + 0.4 FSR optional on ground level at rear)

1.65 FSR

(1.25 FSR on 3 levels + 0.4 FSR optional on ground level at rear)

* Consultant recommendations were based on Scenarios B and C.

2. Proposed Changes to C-2 District Schedule

The proposed changes to C-2 follow the consultant study recommendations which were based on Scenarios B and C. The changes also include changes to update the District Schedule. The proposed changes are a reasonable "middle road" that will make C-2 development more neighbourly without unduly reducing development potential to maintain city housing target commitments to the Liveable Region Strategy Plan.

In the following discussion the numbers in square brackets refer to the relevant sections of the draft District Schedule (DS) in Appendix A or draft Guidelines (G) in Appendix B.

(a) Rear Heights and Setbacks [DS s.4.3, s.4.6]

The most significant impact on neighbours occurs at the rear of C-2 projects. The parking and commercial level that projects to the lane is often too high; the upper floors are too close and overlook back yards; and the treatment of the lane elevations, parking and service areas is unattractive. Proposed changes to the height limits and rear setbacks address these problems:

- on the rear 10.7m (35 ft.) of the site, the maximum permitted height will be reduced from the current 12.2m (40 ft.) to a stepped envelope of 4.6m (15 ft.) and 10.7m (35 ft.);
- where commercial and parking structures project to the lane, a minimum 0.6m (2 ft.) setback will be introduced, to incorporate landscaping to soften the rear wall;
- where residential occurs on ground level at the rear, the setback will be increased from 4.6m (15 ft.) to 6.1m (20 ft.), and there will be a 1.5m (5 ft.) landscaped screening strip at the lane edge;
- the rear setback for 2nd and 3rd storeys will be increased from 4.6m (15 ft.) to 6.1m (20 ft.); and
- the 4th storey will be set back 10.7m (35 ft.). Currently the District Schedule requires 4.6m (15 ft.), with the Guidelines suggesting more, but not specifying how much.

b) Front Setbacks [DS s.4.4]

A number of proposed changes will improve the street-front scale and design:

- a new 0.6m (2 ft.) front setback will ensure space for projections like building cornices, overhangs, balconies, and bays; and to also provide needed space for merchandise displays and café tables on streets whose sidewalks are often too narrow. (Because strata-titling regulations do not allow projections outside the property line, buildings now set their upper storeys back, and then project out cornices and overhangs out again, resulting in awkward multi-stepped facades); and
- a new 2.4m (8 ft.) front setback at the fourth storey will reduce the apparent height of the building on the street.

(c) Height on the Front of the Site [DS s.4.3]

The current C-2 height limit is 12.2m (40 ft.), measured from "base surface", i.e. approximately the surface of the site, which may be sloping in two directions. This results in a sloping height envelope.

From the C-2 owners' or developers' perspective, the current height limit is not workable for four storey mixed use development:

- it results in too low a ceiling height for the ground floor commercial, which makes it less viable. Commercial space ideally needs 15 ft. floor-to-floor to accommodate structure and mechanical systems and still leave 12 ft. clear. The current 12.2m (40 ft.) limit usually leaves only 9 ft. clear; and
- on sloping sites the sloping height envelope means buildings must either have stepped floor slabs (costly, less practical), give up density, or apply for the height relaxation available in the Guidelines. Since many sites slope, many development applications involve a relaxation request, which increases uncertainty, controversy, cost and time for processing.

The neighbours feel the current 12.2m (40 ft.) is too high. The topmost edge of the building can occur a mere 4.6m (15 ft.) from the rear property line, making the full height of the building visible, and worsening overlooking of backyards.

The consultant study proposed two measures:

- changing the way height on the front portion of the site is measured, making the envelope horizontal rather than sloped
- limiting the height in the front portion of the site to either 12.2m (40 ft.) or 13.8m (45 ft.)

The proposed District Schedule includes the horizontal measurement, and the 13.8m (45 ft.) height, which staff recommend. However, should Council wish to support a 12.2m (40 ft.) height limit, an optional clause is included in the District Schedule. Staff recommend the 13.8m (45 ft.) because:

- a 13.8m (45 ft.) height limit will permit normal commercial ceiling heights on the ground floor, which would enhance economic viability, in some measure compensating C-2 owners for the reduction in density;
- the 4th storey will now be 10.7m (35 ft.) back from the rear property line of the C-2 site, 16.8m (55 ft.) from the neighbour's rear property line, and over 30.5m (100 ft.) from the back of a typical single family house. At these distances the visual difference between 13.8m (45 ft.) and 12.2m (40 ft.) is insignificant;
- the 45 ft. limit would eliminate the need for relaxations, resulting in more certainty, more efficient application processing, fewer reports to Council, and fewer Board of Variance appeals; and
- the 45 ft. limit would accommodate the increased height of loading bays which the Engineering Department will soon be recommending to Council. (Class B loading bays will increase from 3.7 m. to 3.8 m., and a new Class C loading bay, which may be required in some C-2 projects, will be 4.3 m. high).

It should be noted that should Council choose the alternative 12.2m (40 ft.) limit, a clause would need to be added to the Guidelines regarding relaxation for sloping sites. This would be included in the final set of Guidelines brought forward for adoption at the time of enactment of the revised District Schedule.

(d) Sites Adjoining R-zoned Sites with No Intervening Lane [DS s.4.5.1 (b)]

Over 120 C-2 parcels directly abut R-zoned sites without a lane separating the two. Impacts are more severe in these cases. The currently required side yard on the C-2 site is only 0.9m to 1.5m (3 ft. to 5 ft.). Where C-2 sites are bounded by two streets (e.g. corner sites) the Director of Planning has the authority to determine which side will be considered front. This decision will now be guided by the proposed Guidelines [G s.4.2.1], and will allow the larger rear setbacks to be positioned so as to benefit the R-zoned properties in some cases. However, this will not be possible in all cases. Therefore the proposed District Schedule and Guidelines work together to ensure significantly larger side yards and setbacks, while still providing development opportunity on the C-2 site. [G s.4.5]

(e) Density [DS s.4.7.1]

One of the main problems with the current C-2 zoning is that the maximum residential density permitted in the District Schedule does not fit on the 3 floors above the commercial. While the current Guidelines advise applicants that the maximum is not likely achievable, the discrepancy between District Schedule and Guidelines is misleading, and is often a source of conflict.

The proposed densities reflect what can actually be accommodated within the new recommended heights and setbacks. The figures were arrived at by the consultant through designing various C-2 projects, of both "corridor" and "courtyard" types. The following table compares what is currently allowed, what is actually being achieved, and what is proposed in the revised zoning.

Table 2 Density

 

Current Permitted

Current Achieved*

Proposed

All uses combined

3.0 FSR

2.68 FSR

2.5 FSR

Dwelling uses

2.5 FSR

2.15 FSR

1.75 FSR on 3 levels, + 0.4 FSR optional on ground level

*average for 4 storey mixed use projects on normal size sites, Sept 1989 to Dec 2001

The draft District Schedule includes a maximum density of 0.75 FSR, with the Director of Planning able to consider increases to the maximums above, provided he first considers the applicable guidelines. This approach is consistent with most other discretionary District Schedules. It permits small developments and changes of use to be considered expeditiously, while ensuring that significant developments are fully reviewed against the Guidelines.

As now, small sites (e.g. 15.3m (50 ft.) frontage and less), and sites abutting R-zoned sites without an intervening lane, may not be able to achieve the maximum density, and the Guidelines will continue to make this clear.

(f) Other Items
Some of the proposed changes only require changes to the Guidelines:
- revised courtyard Guidelines are proposed. [G s.2.6]. This will allow the courtyard form of housing to continue to be feasible with the new, larger rear setbacks;
- a new guideline discourages major commercial expression (i.e. illuminated awnings, large signage) when commercial uses are located across a local street from residential zones [G s.3.2 (d)];
- provisions have been added to Guidelines about height relaxation to address unusual sites (very shallow sloping upwards to the lane, adjacent to active rail lines or industrial zones; and adjacent to zones that permit greater heights) [G s.4.3]; and
- the Guidelines have been expanded to provide a basis for better quality of external design and landscaping [G s.5, 6, 7, 8].

3. Concerns of Interested Parties

Both the extensive consultation during the study, and the responses since it was completed, confirm that the two main interest groups-C-2 owners (and development-related groups such as UDI, NAIOP, and GVHB) and owners of adjacent properties--have inherently different views on how much the C-2 heights, setbacks and density should be changed to address the issues. Their opinions on the different scenarios were noted above.

Besides the responses to the zoning proposals themselves, some related concerns have been expressed by interested parties and will likely be raised at Public Hearing. The main points and related data are provided for Council's information.

(a) Effect on Property Values

C-2 owners and development industry representatives are concerned with the possible reduction in C-2 property values that would result from reduced density. On the other hand, owners of adjacent properties point out that the upzoning in 1989 would have increased C-2 values by a larger amount, and a reduction is not unreasonable.

A proforma analysis of the 4 alternative zoning scenarios was done as part of the consultant study, in November 2001. The representative sets of calculations were done to reflect differences in land values between the east side and west side. Table 3 shows the residual land values, i.e. what a developer could afford to pay for a site for the purposes of development. While the specific numbers may change over time (due to sales price changes, interest rate changes, inflation, etc.) the relative impacts of the scenarios would not change. The proposed zoning, based on Scenarios B & C, results in a residual land value 8 to 9% lower than Scenario A, which is similar to current zoning.

Table 3 Residual Land Values

 

Scenario A
(similar to current zoning)

Scenario B & C
(basis of proposed zoning)

Scenario D

Overall Density

2.75 FSR

2.5 FSR

2.00 FSR

West Side

$109/sq. ft.

$99/sq. ft.

$79/sq. ft.

East Side

$84/sq. ft.

$77/sq. ft

$62/sq. ft.

It should also be noted that for many C-2 sites the rental revenue from existing development supports a sale price that is higher than the value for development purposes. The impact of the reduced density and residual land values will be felt by only those C-2 sites that are development candidates.

Staff also note that land values have been rising recently. Staff looked at land sale prices of sites where development permits for the usual type of mixed use projects were approved or in process from March 2002 to now. Six west side cases ranged from $162 to $205 per square foot of land, and the single east side case sold for $98 per square foot of land.
(b) Effect on Housing Capacity

Various parties are concerned that the reduction in C-2 density would significantly affect the City's housing capacity. Housing capacity is the estimate of how many units could be built over the long term under current zoning. The City's method of estimating capacity is conservative, and is based on actual development data, taking account of limiting factors like site size, age of building, and existing building size. The estimated effects of the C-2 zoning change are shown in Table 4. The reduction is small. The City will remain well within its commitment in its Regional Context Statement, which is to provide 50,400 to 66,200 units capacity to 2021.

Table 4 Housing Capacity under Existing Zoning

 

Current

After Proposed C-2 Changes

City-wide capacity

66,200 units

63,600 - 65,900 units*

C-2 capacity

14,600 units

12,000 - 14,000 units*

* the range reflects the residential FSR range between 1.75 FSR and 2.15 FSR.

Staff also note that additional housing capacity of up to 19,000 units is expected to result from planning work currently underway in S.E. False Creek, East Fraser Lands, and Community Vision areas.

Another concern that is sometimes confused with housing capacity is the current availability of developable sites in C-2. As noted above, most C-2 sites have some form of revenue-producing development on them. At any given time, if the amount that a developer can pay to buy the site for development is less than what someone will pay to keep the current revenue-producing uses, the site will be sold for its current use rather than for redevelopment. While this is not a city policy issue, it would be a concern if there were insufficient development sites to meet market demand for units since that would affect the availability and affordability of housing. However, even assuming C-2 sites with as little as .45 FSR on them stay in their existing use, the remaining C-2 sites have sufficient unit capacity for 18 years of development, based on past average development rates.

(c) Suggestions outside the scope of the zoning review

Some respondents suggested measures instead of, or in addition to, the proposed zoning changes.

CONCLUSION

In the 13 years since the C-2 zoning was changed to permit more residential development, results have been mixed. On the positive side, over 3000 units of housing have been built. On the other hand, many projects' height, massing and design have had negative effects on neighbours and on the streetscape. The proposed zoning changes will significantly reduce the C-2 projects' impacts on adjacent residential properties; will improve the street-scale and massing; will provide for practical heights for development; and will improve design.

The changes are based on the recommendations of the C-2 Zoning Review, completed in 2002 by consultants. This study included thorough analysis of the projects and issues, and extensive consultation with the two main interested groups: C-2 property owners, and the owners of adjacent residential properties. While the views of these two groups regarding how much the zoning should change are inherently different, staff feel the proposed changes to the zoning are a reasonable middle ground that will significantly reduce negative impacts without a major reduction in development opportunity.

* * * * *

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