LATE DISTRIBUTION
FOR COUNCIL MAY 13, 1997
P2
POLICY REPORT
DEVELOPMENT AND BUILDING
Date: May 6, 1997
Dept. File No. 3117
C.C. File: 5307-1
TO: Vancouver City Council
FROM: Manager of the Housing Centre, in consultation with
the Director of Central Area Planning
SUBJECT: CD-1 Text Amendment, 800-1100 Pacific Boulevard
(Quayside Neighbourhood, Concord Pacific Place)
Payment-in-Lieu for Non-Family Non-Market Housing
RECOMMENDATION
A. THAT Council instruct the Director of Land Use and Development to make application to amend CD-1 By-law
7248 and the False Creek North Official Development Plan, as set out in Appendix A, to allow two
non-family non-market sites in Quayside Area 4 (Sites 4A1 and 4D2 as identified in the Quayside
Neighbourhood Non-Market Housing Agreement dated November 1, 1993) to be developed for market housing;
FURTHER THAT this application be referred to Public Hearing, together with the recommendation of the
Manager of the Housing Centre to approve, subject to conditions contained in Appendix B;
AND FURTHER THAT the Director of Legal Services prepare the necessary by-law for consideration at
Public Hearing.
B. THAT the Director of Land Use & Development be instructed to process Development Applications as a
priority for the non-family non-market sites 4A1 and 4D2 in the Quayside Neighbourhood for market
development in advance of a public hearing for the zoning amendments, with issuance of the Development
Permits subject to enactment following approval of the rezoning at Public Hearing, and on condition that
Concord Pacific accept all risks and associated costs that the rezoning may not be approved.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of A and B.
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 the non-market housing units must be designed and developed for families. This policy has been relaxed for
major projects where the economic feasibility does not permit the full 20% 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.
SUMMARY
Concord Pacific is proceeding with the development of the waterfront portion of the Quayside Neighbourhood (Area 4). The
first two blocks include two social housing sites (4A1 and 4D2) with 110 and 40 non-market non-family units respectively.
They are located on commercial or amenity podia, and the projects should be built at the same time as the market
components of the developments. It is very unlikely that allocations of non-market units will be received for these
sites in the near and probably more distant future. Council is presented with several options for addressing this issue:
- leave the sites undeveloped;
- switch the non-market non-family square footage for market housing square footage elsewhere in Concord Pacific
Place;
- convert the sites from non-family non-market to family non-market;
- develop the sites with 'affordable' housing developed without senior government subsidies; or
- take payment-in-lieu that would see the sites converted to market housing in return for a cash contribution to the
City to be used for social housing development.
Payment-in-lieu is recommended for these two sites. The payment-in-lieu would total $1,225,000 if taken as cash for
affordable housing outside of Concord Pacific Place, or $1,612,000 if used to discount the cost of the 88 unit non-market
family project in Quayside Area 4 by 10%, which would improve its chances of getting an allocation of units. There are
general policy issues related to payment-in-lieu which will be discussed in a separate policy report that will be
presented to Council before the public hearing for this proposed application, should it be referred.
Concord have agreed, subject to the rezoning being considered by the end of July, to the payment-in-lieu figures, which
have been reviewed by Real Estate Services who confirm they are appropriate. Concord has asked that they be allowed to
submit development permit applications for the development of the two non-market sites for market housing in advance of a
decision on the rezoning at a public hearing. Staff support this as long as Concord understands that the rezoning may
not be approved and accepts the risks and costs if it is not.
PURPOSE
This report recommends that Council refer amendments to the Quayside CD-1 and the False Creek North Official Development
Plan directly to public hearing that would allow Concord Pacific to develop 2 non-family non-market sites in the Quayside
Neighbourhood Area 4 for market housing on condition that they provide payment-in-lieu, either in the form of cash or a
discount on the family non-market site in Quayside Area 4.
BACKGROUND
Quayside Neighbourhood
In April, 1990, Council adopted the Official Development Plan for North False Creek (FCN ODP). It allowed the
development of 8,500 units of housing of which 20%, or 1,700 units, had to be designated for non-market housing developed
under federal and provincial subsidy programs. At least half the non-market units were designated for families. With
the amendments to the International Village CD-1 in 1995, the total number of units was amended to 9,100, the percentage
of non-market to 18.2% (1,656 units), and the percentage of non-family non-market units to 8.7% (769 units).
The FCN ODP established several neighbourhoods that required individual CD-1 rezonings before redevelopment could
commence. The percentage of non-market housing varies from neighbourhood to neighbourhood, as does the percentage of
non-market housing designated for families.
The waterfront portion of the Quayside Neighbourhood, Area 4, was allocated 1,415 units of housing of which 338 had to be
non-market with 88 for families. The original Quayside CD-1 was approved in April, 1993. On February 26, 1996, Council
approved a revised form of development for Area 4, the waterfront portion of the Quayside
Neighbourhood in Concord Pacific Place. The revised CD-1 includes 4 non-market housing sites. There are 3 non-family
non-market sites with 110 (4A1), 40 (4D2) and 100 (4J) units respectively and 1 family non-market site (4H) with 88
units. The locations of the Quayside Neighbourhood and the non-market sites are indicated on Appendix C.
Concord Pacific had not intended to begin the development of the Quayside Neighbourhood until the Roundhouse
Neighbourhood was completed. However, the undeveloped sites in Roundhouse are to be developed with larger, upper-end
market units. With the shift in market demand to medium-priced units, Concord decided to proceed with its Quayside
development which was targeted to smaller, lower- cost units.
On January 13, 1997, the Development Permit Board approved the first development permit application (DE401730) for
Quayside Area 4 (the Aquarius). It covers the whole block south east of Pacific and Davie, with the exception of the
non-market site, and includes 395 market units and 79,000 sq. ft. of commercial space. Concord Pacific will be
submitting a Development Permit Application for the next block in Quayside, immediately east of the first, in the next
couple of months. It contains the non-market site 4D2 with a capacity of 40 non-family units.
Major Project Non-Market Housing
When the False Creek Policies were being developed, one of the issues addressed was the percentage of non-market or
social housing to be required. At the time new social housing was only being funded by senior governments for core-need
households; households that would have to pay more than 30% of their gross income to rent suitable and adequate
accommodation in Vancouver. A survey of the social housing on the City's False Creek South Shore development indicated
that it was accommodating 22% core-need households, and a survey of the region indicated that 20% of the regional
population was in core-need. Council approved a policy that 20% of the units in the False Creek major projects, and
later in the Coal Harbour major projects, had to be built for core-need households using senior government housing
programs. The core-need program of the day funded both family and seniors' projects, and Council adopted the policy that
at least half of the social housing in the major projects had to be for families.
In 1993, the Federal Government withdrew its two-thirds funding for new social housing. The Province set up the
Commission on Housing Options to review housing needs in the province and recommend appropriate policies and programs.
The Commission recommended that the Province continue to fund new social housing, but that families have priority for
funding under the Non-Profit Rental Housing Program, and that new non-profit projects contain a mix of market rental as
well as subsidized rental units.
On April 22, 1993, Council revised its social housing policy for the major projects to:
- require that 20% of the units be designated for non-profit instead of core-need housing;
- provide the flexibility to consider alternative non-market housing, other than provincially subsidized non-profit
housing, if units were not forthcoming from the Province or unlikely to be forthcoming;and
- allow for payment-in-lieu if other options were not viable.
Council also reiterated its request for a special Non-Profit Rental Housing allocation for the major projects or a
program specifically designed for the major projects. In 1994, the major project Official Development Plans and CD-1
By-laws were amended to implement the revised major project social housing policy.
Since revising its major project social housing policy, Council has given approval in principle to an alternative
non-market housing project for the non-family project in the Roundhouse Neighbourhood, and a payment-in-lieu of
$1,100,000 for 140 non-family non-market units in International Village.
Major projects outside the Downtown have been unable to provide the full 20% non-market housing. Collingwood Village is
providing market rental only, and the brewery site in the Arbutus industrial area and Tugboat Landing on the Fraser are
providing less than the 20%.
QUAYSIDE NON-MARKET HOUSING
The Quayside Non-Market Housing Agreement between the City and Concord Pacific sets out the rights and obligations of
each related to the development of the non-market sites in the neighbourhood. Under the agreement, Concord Pacific's
obligation to submit sites to the Province for allocations of non-market units follows the issuance of Development
Permits for adjacent market development. In the case of the 110 unit non-family non-market housing site 4A1, in the
block for which the development permit was approved in January (the Aquarius), Concord must submit the site to this
year's non-market housing proposal call expected to be announced by the Province later this spring. If the next block
containing the 40 unit non-family non-market site 4D2 receives a development permit later this year, 4D2 will have to be
submitted to next year's proposal call, along with 4A1 if it is unsuccessful in obtaining a unit allocation this year.
It is very unlikely that site 4A1 will receive an allocation of housing units this year or that 4A1 and 4D2 will any time
soon. In 1994 and 1995, 900 units of non-market housing units were made available by the Province. In 1996 the number
was reduced to 600, and it is expected that this will be the maximum number available in 1997. As well, units are only
available for non-family projects if the non-profit sponsors provide substantial equity so that the projects come in
substantially under the Maximum Unit Price (MUP)
budgets established for the projects. Free land or equivalent is the minimum contribution required. In 1996, only 65
units of non-family (seniors) housing was funded in B.C. for three projects.
The City's agreements with the major project developers require that they make the non-market sites available to the
Province at a price that works within the MUP budgets established by the program. The developers provide a subsidy equal
to the difference between the market value for the site and its non-market value (the land residual left over from the
MUP budget after all other costs excluding land, e.g., construction costs, fees,etc., re subtracted). This subsidy
varies from site to site since market value varies from site to site but the MUP budgets are the constant across the
Vancouver region. The City's agreements with the major project developers do not require that they provide sites for
free; the developers were expected to receive some value from the non-market sites. Consequently, it is very unlikely
because of the size of the 4A1 project (110 units) and the program requirement that, as a minimum, non-family projects be
provided with free land, that site 4A1 will receive an allocation this year.
OPTIONS
There are several options the City has for the non-family non-market sites in the major projects for which funding will
not be available in the short term, and probably not for the longer term either:
- leave the sites undeveloped;
- switch the non-market non-family square footage for market housing square footage elsewhere in Concord Pacific
Place;
- convert the sites from non-family non-market to family non-market;
- develop the sites with alternative 'affordable' housing developed without senior government subsidies; or
- take payment-in-lieu that would see the sites converted to market housing in return for a cash contribution to the
City.
Which option is appropriate will vary from site to site depending on circumstances unique to each. In the case of the
non-market sites 4A1 and 4D2, payment-in-lieu is recommended, either as cash to be used for affordable housing outside
Concord Pacific Place or as a discount in the cost of the Quayside Area 4 family non-market project.
Hold Sites: The 110 unit non-market site 4A1, in the first Quayside block to be developed by Concord, is part of a
comprehensive development and is located on a two-storey commercial podium that will contain a major food store, retail
outlets, and, on the second floor, a large restaurant. Similarly, the non-family non-market site 4D2 is part of the
comprehensive development of the next Quayside block and located on a 1-storey podium consisting of amenity space.
While other non-market sites in the major projects are located on a podium, in most cases the podium is a parking garage
alone. These two sites are unique in the degree of
integration with commercial and other uses. Each of these blocks should be developed as a piece. They cannot be phased
without a substantial cost premium that could be prohibitive. Consequently, holding the two sites until units are
available, most likely for a number of years, is not feasible.
Relocate Space: Most of Concord Pacific Place is now zoned. There are two neighbourhoods for which CD-1 By-laws are not
in place, but they do not offer easy opportunities to switch the square footage allocated to the non-market non-family
housing sites 4A1 (73,412 sq. ft.) and 4D2 (26,695 sq. ft.) with market square footage elsewhere. Area 1A (Beach
Neighbourhood West) has been the subject of preliminary design review, and the sites that can be allocated to non-market
housing already are. As well, there is pressure to locate some of the non-market housing in Area 1B to Area 1A which
will be difficult on its own. Area 6, on either side of the Plaza of Nations, has a limited capacity of 1,193 units of
which 222 (18.6%) are non-market. It would be difficult to switch market for non-market space in this neighbourhood
because most of the market space is in towers, 17 storeys and up, too large for non-market non-family projects. This
option would likely require mixing the non-market and market housing within a single building which would aggravate the
problem. While this option may preserve the non-market opportunity, most likely it only postpone the problem at the cost
of relocating the non-market housing to a more complicated and less desirable location. Consequently, this option is not
recommended.
Convert to Family: The City converted non-family non-market space to family non-market space in Coal Harbour. There,
the square footage allocated to 80 non-family non-market units was combined with an adjacent family site designated for
40 units to produce a single family project of 99 units, which is now under construction. Converting the square footage
set aside for the non-family units in sites 4A1 and 4D2 is not recommended however. 4A1 is a 12-storey tower on top of a
podium which is not a form suitable for families. 4D2 would be more suitable for families, as it is a lower building,
but it is also on an above grade retail podium and not easily converted to family units. One of the reasons there are
only 88 family of the 338 non-market units in Area 4 is because housing on top of podia was not considered appropriate
for families with children.
Alternative Non-Market: Developing 'affordable' housing projects without senior government housing subsidies is not
recommended because of the difficulty in making such projects work. Only a very limited affordability can be achieved
without senior government housing subsidies. An unsubsidized 'affordable' housing project was approved in principle for
the Roundhouse non-family non-market site. It has proven difficult to make the project work, after two years' effort,
and it is expected that revisions to the proposal will be reported to Council in the near future. It would not be
recommended to try to develop an unsubsidized 'affordable' project on 4A1 or 4D2 until the Roundhouse project is
resolved.
Payment-in-Lieu: Payment-in-lieu is recommended for both non-market sites 4A1 and 4D2. Payment-in-lieu should be
considered at this time to realize the limited opportunities available now, and probably into the future, to develop
non-market housing. The amount of payment-in-lieu is the difference between the market and non-market land values for
the sites. Payment-in-lieu requires the support of Concord Pacific and they have an incentive to participate now when
they can realize the construction efficiencies from building out the blocks as single pieces. There would be a
substantial cost premium to build the 4A1 and 4D2 components if construction, whether for market or non-market projects,
were to be undertaken after the commercial and market housing construction is completed, assuming this would even be
feasible. Concord has the most incentive to provide payment-in-lieu now, as this is when it can maximize its land value.
CALCULATING PAYMENT-IN-LIEU
If Council supports payment-in-lieu for sites 4A1 and 4D2, it is recommended that the City reserve for itself two
payment-in-lieu options. With the first, the City would receive a payment of $1,225,000, inflated by CPI, from Concord
Pacific which the City could request anytime after the Quayside non-market legal agreement is amended. The second would
allow the City, until the end of 1999, to require that Concord submit the 88-unit family site 4H to the Province for the
next and subsequent proposal calls at 90% of the Maximum Unit Price budget. This equates to a $1,612,000 discount based
on the 1996 MUPs.
The principle for payment-in-lieu that was approved by Council is simple; the payment-in-lieu is the difference between
the market value and non-market value for the site. Complexities arise in the case of podium sites, and these will be
addressed in a policy report that will be presented to Council prior to the public hearing for this application, assuming
it is referred. The payment in lieu calculation for sites 4A1 and 4D2 assume that social housing allocations should have
been available, and therefore the value of the sites is not discounted for the fact they are not.
Both payment-in-lieu figures have been reviewed by Real Estate Services who advise that they appropriately represent the
difference between the market and non-market values of the sites under the two options. The second option generates a
higher figure because it presents more of a benefit to Concord. The project includes a 49-space daycare and the parking
for the Quayside marina. It is in Concord's interest to have this site developed as part of the overall Quayside
development with the full range of services in place.
At 90% of the MUP budget, the project would have a much better chance at a unit allocation than at 100% of MUP. It is a
large project, and more expensive per unit because of its concrete construction. Taking the payment-in-lieu through a
discount in the project budget may be in the City s interest. For the major projects such as Concord Pacific Place,
the family projects are
crucial to supporting the City's objectives for families as well as low and modest income households. In this case the
project would both provide family units and the daycare needed by families. Consequently, it is recommended that the City
reserve the right for the payment-in-lieu to be paid either in cash or through a 10% discount in the budget for the
family non-market project.
Concord has agreed to both these options. It has agreed that, at the City's request, it will submit the 88-unit family
site 4H to this year's proposal call at 90% of MUPs. They are prepared to advance paying the cost of the daycare if the
proposal succeeds in receiving a unit allocation, and the costs of the marina parking. They have committed to proceeding
with the project without delay if they receive the units; this is one or two years earlier than would have been required
under the current legal agreement. They do want the obligation to submit site 4H limited to the end of 1999 (the next
two proposal calls) as the benefit to them will diminish. This is acceptable; if a submission at 90% of MUPs does not
garner an allocation in the first couple of proposal calls, it probably won't thereafter.
AMENDMENTS TO THE QUAYSIDE CD-1 AND THE FCN ODP
Payment-in-lieu requires amending the text of the Quayside CD-1 as well as the FCN ODP. The Quayside CD-1 designates
sites 4A1 and 4D2 for 150 units of non-family non-market housing and it must be amended to delete this designation.
The FCN ODP requires that 18.2% of the total 9,100 units be designated for non-market housing of which 8.7% are
non-family non-market units. The elimination of 150 Quayside - Area 4 non-family non-market units will reduce the
overall number to 16.6% (1506 units) and the non-family non-market component to 7.1% (642 units). The non-market housing
in Area 4, the Quayside waterfront would be reduced to 13.0% (188 units) with the non-family non-market component reduced
to 6.9%(100 units).
The Quayside CD-1 By-law 7248, which covers both Area 4 and 5 with a total of 2,588 units, must be amended to reduce the
number of non-market units from 20.7% (536 units) to 15% (388 units), and the number of non-family non-market units from
13.5% (350 units) to 7.7% (200 units).
The number and percentage of family non-market units would not change. The total number of units, as well as the total
square footage, that could be built in False Creek North or in Quayside would remain the same.
PROCESSING DEVELOPMENT APPLICATIONS
Concord Pacific wishes to begin construction of the first block of Quayside as soon as possible. If its schedule cannot
be met, it would not achieve the construction efficiencies from building out sites 4A1 and 4D2 at the same time it builds
the larger projects to which these sites are integral. If this happens, Concord would not be willing to proceed with the
payment-in-lieu in the amounts proposed.
Following discussions with Concord and their architect, staff anticipate minor changes to the form of development
approved in principle for the previous rezoning. These minor changes can appropriately be addressed during the
development permit process prior to final Council approval of the detailed form of development for each portion of the
project.
Concord Pacific wishes to submit applications for the development of sites 4A1 and 4D2 for market housing in advance of the public hearing to consider the payment-in-lieu proposal. Normally development applications are not processed until
after a rezoning is approved. However, to accommodate Concord's schedule it is reasonable to process this rezoning
application and the development applications in parallel as long as all risks are Concord's. The Development Permits
would not be issued unless the rezoning is approved and enacted, and Concord Pacific must understand that it may not be,
and must accept the risks and associated costs if it is not.
CONCLUSION
It is recommended that Council instruct the Director of Land Use and Development to make application to amend the
Quayside CD-1 and False Creek North ODP to allow payment-in-lieu for two of the non-family non-market housing sites in
Quayside - Area 4. The rezonings would be subject to an amendment to the Quayside non-market legal agreement to oblige
Concord to provide $1,225,000 as payment-in-lieu or to develop the 88 unit family non-market project in Quayside - Area 4
at a maximum cost 90% of the MUP budget allowed under the Non-Profit Rental Housing Program, a subsidy equal to
$1,612,000 based on 1996 MUPs. The legal agreement will also oblige Concord to submit an application for a 1997
allocation of non-profit units for the family site if the City wishes. This is a year or two earlier than would have
been expected under Concord's current schedule for Quayside.
It is recommended the application be referred directly to Public Hearing so as not to delay Concord's development and to
ensure the zoning is in place, if it is approved, by the time the Province announces the 1997 Non-Profit Rental Housing
allocations later in the year. It is also recommended that Development Applications be processed for the development
of the two non-family non-market
sites for market housing in advance of the public hearing to take advantage of the construction efficiencies of building
these sites at the same time as the larger projects of which they are a part. The Development Permits would be issued
only if the rezoning is approved, and Concord Pacific must accept all the risks and associated costs if it is not.
* * * * *
APPENDIX A
PROPOSED CHANGES TO THE FALSE CREEK NORTH ODP (Figure 4)
Current Proposed
False Creek North
-non-market non-family 8.7% 7.1%
-non-market family 9.5% 9.5%
-market non-family 66.3% 67.9%
-market family 15.5% 15.5%
Area 4 (Quayside)
-non-market non-family 17.3% 6.9%
-non-market family 6.1% 6.1%
-market non-family 68.3% 78.7%
-market family 8.3% 8.3%
PROPOSED CD-1 CHANGES - 800-1100 PACIFIC BOULEVARD
(CD-1 Bylaw No. 7248)
Section 4 (Uses)
(a)(iii) a minimum of 350 200 units shall be provided through government funded programs targeted to core-need households
or such non-market housing programs or initiatives as City Council may generally define or specifically approve from time
to time, but need not be designed consistent with clause (i)* above.
*(Clause (i) requires the units to be designed for families).
APPENDIX B
THAT, prior to enactment of the CD-1 By-law, the registered owner amend the Quayside Neighbourhood Non-Market Housing
Agreement, and make such other arrangements as may be necessary to the satisfaction of the Director of Legal Services and
the Manager of the Housing Centre to:
a) provide the City with a payment-in-lieu equal to $1,225,000 inflated by CPI; or
b) develop the family non-market site in Quayside Area 4, Site 4H, at 90% of the Maximum Unit Budget allowed for
the family non-market projects, and to pursue funding for the family project in 1997;
with the City having the right to require a) or b) until December 31, 1999, at which time, if a conditional non-market
unit allocation has not been received for site 4H, Concord Pacific will provide the City with the payment-in-lieu
pursuant to a).