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CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
September 28, 2004 | |
Author: |
Cameron Gray/
| |
Phone No.: |
7207/6198 | |
RTS No.: |
4419 | |
CC File No.: |
4657 | |
Meeting Date: |
October 5, 2004 |
TO: |
Vancouver City Council |
FROM: |
The Director of the Housing Centre, in consultation with the Directors of Current Planning, Real Estate, Finance and Legal Services |
SUBJECT: |
788 Richards Street: SRA Permit Application for the Passlin Hotel (746 Richards Street) and Replacement Non-market Housing |
RECOMMENDATION
A. THAT, subject to approval by the Development Permit Board of DE 408641, Council supports the relaxation of floor space ratio (FSR) in the amount of 9 256.5 m² (99,639 ft.²) for 788 Richards Street, consisting of bonus floor space for market residential use (6 967.5 m² [75,000 ft.²]) and floor space whose use will be restricted to low cost housing (2 229.6 m² [24,000 ft.²]), as defined by and provided for under Section 3(11) of the Downtown District Official Development Plan;
B. THAT, subject to approval by the Development Permit Board of DE 408641, Council authorize expenditure of $720,000 towards the development of the social housing component in 788 Richards Street, to be paid upon conveyance of the air space parcel for the low cost housing to the City, the source of funds being the City-wide Development Cost Levies allocated for replacement housing;
C. THAT, subject to approval by the Development Permit Board of DE 408641, City Council approve a Single Room Accommodation Permit for 746 Richards Street (Passlin Hotel) to demolish all 43 rooms in the hotel on the condition that the owner proceeds with the construction and conveyance of 46 low cost housing units to the City as outlined in this report; and
D. THAT the Director of Legal Services be authorized to prepare, execute and register such agreements as necessary, noting that Council approval of these resolutions shall not create any legal rights or obligations and none shall arise until the Purchase and Sale Agreement and all other necessary legal documentation has been fully executed on terms and conditions to the satisfaction of the Director of Legal Services, and noting that staff will recommend that the execution of the legal documentation also be a prior-to condition for the issuance of DE408641.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of A, B, C and D above.
COUNCIL POLICY
_ Section 3(11) of the Downtown Official Development Plan, adopted November 4, 1975, provides for the Development Permit Board to consider a relaxation of floor space ratio (FSR) for projects that include low cost housing subject to prior Council approval.
_ In May 1991, when dealing with housing strategies for Downtown South, Council instructed the Housing Centre to monitor core-need housing in the Downtown South on a periodic basis. Council also confirmed their policy of one-to-one replacement of single-room occupancy (SRO) units in Downtown South.
_ In October 2001, Council confirmed the housing objective to "maintain and expand housing opportunities with priority being given to families with children, SRO residents, and the mentally ill, physically disabled, and others at risk of homelessness."
_ On October 21, 2003, Council enacted the Single Room Accommodation By-law to regulate the conversion and demolition of single room accommodation. The By-law requires Council approval for the conversion or demolition of single room accommodation. The By-law also allows Council to attach conditions to the approval of a permit to convert or demolish single room accommodation.
SUMMARY AND PURPOSE
The owner of 788 Richards has applied for a Single Room Accommodation Permit to demolish the 43 room Passlin Hotel so they can redevelop the site. Negotiations have resulted in a proposal to bonus the development with 99,639 sq. ft. of additional density, and invest $720,000 in City-wide Development Cost Levy funds in the project, in return for the developer giving the City 46 units of new low cost housing worth approximately $5,765,000.
This report seeks Council approval of:
_ the bonus density for the development proposed for 788 Richards St.;
_ the expenditure of $720,000 in City-wide Development Cost Levies towards the purchase of the low cost housing; and
_ approval of a Single Room Accommodation Permit for 746 Richards Street (the Passlin Hotel) to demolish all 43 designated SRA rooms;
on condition that the developer commit to delivering 46 units of new low cost housing to the City.
DISCUSSION
Site: The site at 788 Richards Street is located at on the northeast corner of Richards and Robson Streets in Downtown South as noted on Figure 1. (Lots 9-11, Block 55, DL 541, Plan 210 and Parcel G, Block 55, DL 541, Plan BCP5830). The site has a frontage along Richards Street of 300 ft. and a depth of 120 ft., for a total area of 3 341.73 m² (35,971.3 ft.²). The northerly portion of the site is occupied by the Passlin Hotel, situated at 746 Richards Street, a rooming house licensed for 43 rooms. The City's 2003 survey of low-income housing in the downtown indicated that 40 rooms were in use. A smaller building exists immediately adjacent to the Passlin, to the south, with commercial at grade and two residential units above. The remainder of the site is used for surface parking.
Single Room Accommodation By-law: An owner wanting to demolish a building with designated SRA rooms must apply for and obtain a Single Room Accommodation permit. The decision whether or not to approve the application rests with Council. Council may attach conditions to the approval of the permit including payment of $5,000 per room into a reserve fund earmarked for the creation of replacement housing, and/or granting of a section 219 covenant securing any conditions attached to the conversion or demolition permit and the owner's obligations to comply with such conditions.
The Passlin Hotel at 746 Richards is included in Schedule A of the Single Room Accommodation By-law as the building provides accommodation to permanent residents. Discussions have taken place between City staff and the developer (Millennium Development) regarding an SRA Permit to demolish all designated rooms in the Passlin Hotel. Millennium has agreed to replace the 43 designated SRA rooms with low cost housing in return for a density bonus. City staff have further negotiated with Millennium to develop another floor of low cost units at a cost $720,000. Millennium would develop a total of 46 small self-contained units averaging 350 sq. ft. plus amenity space. The source of funds would be the City-wide Development Cost Levies for replacement housing. 788 Richards will generate approximately $1,530,000 in Development Cost Levies of which $500,000 would be allocated to replacement housing.
Development Proposal: The site is located in sub-area "C" of the DD ODP which allows a total density of 5.00 for all permitted uses. Residential floor area may be permitted to a maximum of 3.0.
Table 1 outlines the various floor areas proposed as part of the development submission. The proposal represents an increase in floor space of 55% over the allowable 5.0 FSR.
Table 1: Proposed Floor Areas
Uses |
Commercial |
Market
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Affordable
|
Gross Floor Area |
Commercial |
6 683.5 m²
|
6 683.5 m²
| ||
Market Residential |
10 025.2 m²
|
10 025.2 m²
| ||
Affordable Housing Bonus |
6 967.5 m²
|
6 967.5 m²
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Replacement Housing |
1 866.2 m²
|
1 866.2 m²
| ||
City Purchase of Affordable Housing |
422.8 m²
|
326.6 m²
| ||
Totals |
6 683.5 m²
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16 992.7 m²
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2 192.8 m²
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25 869.0 m²
|
FSR |
2.0 |
5.08 |
0.68 |
7.76 |
Density Bonus: Section 3(11) of the Downtown Official Development Plan states as follows:
"The Development Permit Board may, for any development which includes low cost housing, except within the areas denoted by the letters `K1', `K2' and `K3' on Map 1, permit an increase in floor space ratio, subject to prior approval by City Council and the securing of a Housing Agreement to ensure the inclusion of the low cost housing.
In determining the amount of an increase in floor space ratio that may be permitted as a result of a relaxation, the Development Permit Board, with advice from the Manager of the Housing Centre and the Manager of the Real Estate Division, shall consider:
(a) the cost to the Developer of providing the low cost housing;
(b) the value of the increased floor area;
(c) the value of any relaxation of other regulations;
(d) the impact upon livability and environmental quality of the neighbourhood; and
(e) all applicable policies and guidelines adopted by Council."
The Director of Real Estate Services has reviewed the details of the proposed bonus arrangement and is satisfied that 6 967.5 m² (75,000 ft.²) of additional floor area represents a fair compensation for the developer who will construct 1 866.2 m² (20,088 ft.²) of non-market housing, ownership of which will be conveyed to the City. The value of the bonus density is estimated at $5,045,000. The City purchase of an additional 422.8 m² (4,551 ft.²) at the overall cost of $720,000 is also a reasonable value. The estimated value of the 46 new social housing units is $5,765,000 (excluding land costs and 9 parking stalls).
The Director of the Housing Centre notes that the proposal will provide more low cost housing units than the SRA units that will be demolished. One-to-one replacement of the low income housing in Downtown South has been a City policy since 1991. The new units will not be SRA units, as they are all over 320 sq. ft. in size, but they will accommodate singles who would otherwise live in SRA hotels and rooming houses, and the former residents of the Passlin Hotel will have priority for the new accommodation. The bonusing provisions in the Downtown District ODP requires that the low cost housing included in the project be occupied by residents on welfare, disability pension, etc. The intent is to lease the completed units to a non-profit housing sponsor and the lease will include the income restrictions and controls required by the DD ODP.
Single Room Accommodation Permit: In considering the SRA Permit Application to demolish the designated rooms in the Passlin Hotel, Council must consider a number of factors including the supply of low cost accommodation, the quality of the SRA stock, and the future availability of low cost singles accommodation.
The Passlin Hotel is located in the Downtown CBD. Between 1991 and 2003, there were 179 net losses in the SRA stock in this area. This is in contrast to the overall Downtown Core and the sub-areas of the Downtown South and the Downtown Eastside where net gains were achieved. These SRA rooms are therefore important in maintaining the low-income housing stock. If Council approves the SRA permit, the developer is proposing to replace the existing 43 SRA rooms through the construction and conveyance of a new building, by way of an air space parcel, to the City of Vancouver (in return for a combination of a density bonus and a $720,000 allocation from City-side Development Cost Levies for replacement housing).
The replacement units will be a marked improvement over the existing SRA rooms - they will be self-contained units, each with washroom and cooking facilities; the building will be owned by the City and leased to a non-profit housing society to be selected through a proposal call; and rents will be affordable to singles on welfare. Passlin tenants will have the first right to apply for the newly constructed units.
The conditions set out in the SRA Bylaw for the approval of the demolition of SRA units have been satisfied, and it is recommended that an SRA permit be approved subject to the approval of DE408641 and execution of the required legal documentation to secure the delivery of the 46 low cost housing units to the City.
Tenant Relocation: In addressing the SRA Permit application requirement for a tenant relocation plan, staff advised the applicant that under the City's Zoning and Development By-law (Section 17), eviction notices could only be issued once the building permits for the new development were issued. Alternatively, the developer could offer incentives to the tenants to leave sooner, as is industry practice. Staff had expected Millennium to undertake these negotiations once they had purchased the hotel, and had asked Millennium for a relocation plan for the tenants. Instead, even though it was not a condition of the sale of the hotel to Millennium, the former owner negotiated mutual agreements with the tenants to end their tenancies and all 32 tenants entered into mutual agreements to end tenancy. Thirty tenants vacated August 31st and two remaining tenants will vacate the building by the middle of September. The relocation plan also included forwarding addresses for tenants. The City will ensure that once the replacement units are completed, all efforts will be made to reach these tenants so that they have the first right to apply for the units.
According to the tenant relocation plan that was submitted, tenants were given their last month's rent to assist with moving expenses and reconnection fees. The former owner assisted tenants in finding replacement housing by providing a list of accommodation (given to him by the Ministry of Human Resources), providing information about other suitable housing options, and where necessary, making appointments and driving them for viewings and interviews. The former owner also assisted tenants on moving day.
A consequence of the relocation plan is that the 43 rooms will now sit empty until demolition and subsequent construction of the new units begins sometime next spring, when they could provide much needed housing. Staff had expected that the relocation plan would have resulted in tenants agreeing to leave closer to the commencement of construction sometime early next year. Staff are to report back next spring on the SRA Bylaw, and will include in the review possible revisions to the SRA By-law and procedures to address the issues of tenant relocation to ensure the housing is not vacated earlier than necessary.
Regardless of the issues raised by the tenant relocation, staff recommend the approval of the SRA Permit. Not only will the issuance of this permit help fulfil Council's one-for-one replacement policy, the older SRA stock represented in the existing building will be replaced with new and improved low cost housing units under the City's long term ownership and control.
FINANCIAL IMPLICATIONS
The non-market replacement housing will be exempt from the payment of the City-wide Development Cost Levy (DCL); however, the remainder of the project will be levied. A third ($500,000 approximately) of the DCL funds will be allocated to replacement housing. The Development Cost Levy funds will be received before the City takes possession of the 46 unit airspace parcel which will happen once an occupancy permit for the 46 units of low cost housing has been issued.
No fees for the SRA demolition are included in the staff recommendation pertaining to the SRA permit as any fees would have to be deducted from the DCLs allocated to replacement housing.
CONCLUSION
Staff recommend the approval of:
_ A density bonus in the amount of 9 256.5 m² (99,639 ft.²), of which 2 289 m² (24,639 ft.²) will be constructed as social housing and conveyed to the City of Vancouver;
_ Payment of $720,000 to Millennium Development for the construction of an additional floor which is included in the above calculation; and
_ a Single Room Accommodation Permit to demolish the 43 designated SRA rooms at 746 Richards Street (the Passlin Hotel) as the public benefits of this project will significantly contribute to the City's affordable housing goals;
all on condition that the developer of 788 Richards St. commit to build and convey 46 units of new low cost housing to the City.
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