Agenda Index City of Vancouver

POLICY REPORT
DEVELOPMENT AND BUILDING

TO: Vancouver City Council

FROM: City Building Inspector, in consultation with Director of Planning,

SUBJECT: The Barrett Commission of Inquiry into the

RECOMMENDATION

CONSIDERATION

GENERAL MANAGER’S COMMENTS

COUNCIL POLICY

Council, on January 17, 1991, resolved:

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

Council has always promoted principles of good building practice through adoption of simplified building regulations and cost-effective enforcement.

On December 7, 1995, Council expressed concern for priority in the control of leaks in building envelopes, while considering a General Manager's report on "Leaky Buildings". This lead to adoption of Part 5 of the 1995 NBC into the VBBL with revisions to suit the specific conditions in Vancouver.

BACKGROUND

On June 18, 1998, The Barrett Commission of Inquiry into the Quality of Construction of Condominiums in British Columbia released its report. The report contains a total of 82 recommendations to address the "leaky condo" problem. These recommendations are aimed at all three levels of government, as well as the development industry and the financial sector. There are a number of recommendations which will directly impact on the City, or which would require action by City Council to implement.

Generally, the report is comprehensive and addresses, in some form, all of the major themes that emerged through the Commission’s hearings, including:

The City Building Inspector presented a submission to the Barrett Commission which included six specific recommendations. The thrust of all six of these recommendations have all been addressed in the Commission’s final report.

DISCUSSION

This report is organised according to the Commission's recommendations. Not all of the Commission’s recommendations are restated, but each of the specific recommendations for which comment is provided is quoted followed by the discussion of that recommendation. This discussion forms the basis of the staff recommendations to Council. Comment has been provided on a number of the recommendations which do not require action by the City but for which staff feel that it would be appropriate for the City to take a position and to provide comment to the provincial government.

The Building Standards Branch mandate included all Building Code issues, not just those related to residential construction. City staff, other municipalities, and the development industry have urged the government to re-establish the Building Standards Branch since it was abolished in 1996. The total function of the Building Standards Branch should be re-established in a consolidated unit with responsibility for code development and policy as well as enforcement and interpretation. It is questionable whether it makes sense to put this responsibility under the Homeowner Protection Office (HPO). The HPO is focussed on the residential construction industry and the issues identified by the Barrett Commission. If the intent is to split this function between residential and other types of construction, this would seem to be a duplication of resources and an artificial split. This item is addressed in recommendation ‘B’ of this report.

The City Building Inspector agrees with the need to expand the scope of Part 5 of the VBBL to include more buildings into this class. Currently some small to moderate scale multi-unit residential buildings are not designed under Part 5, and instead are classed under Part 9 “Housing and Small Buildings”. This distinction allows them to avoid the requirements the City has stipulated under Part 5, including review by a ‘Building Envelope Specialist’. Many of the current ‘Leaky Condos’ were designed, and may have building envelope repairs done under Part 9 without this revision. The cut-off line proposed by the Commission is made with reference to distinctions within other parts of the code, and seems an appropriate line to draw. In discussion with the provincial ministry staff reviewing adoption of the 1995 National Building Code (NBC) for the BC Building Code (BCBC), it appears that they will not be making this change at this time. The City Building Inspector, however, believes it is an important change to make to deal effectively with the current situation. This item is dealt with in recommendation ‘A’ of this report.

The Planning Department is currently in the process of reviewing the Zoning and Development By-Law with regard to these issues, and will report back in the fall. The impact of these proposals on building bulk, form of development, and complexity of FSR calculations will have to be assessed. This item is dealt with in recommendation ‘C’ of this report.

In discussion with the provincial ministry staff reviewing adoption of the Part 5 of the 1995 NBC for the BCBC, it appears consideration of the changes that Vancouver has made in adopting Part 5 of NBC 95 will not be made. Consistency with the provincial code is one of the primary objectives that we have set for our current review of the Vancouver Building By-Law; however, the City still has the right to maintain the changes it feels are appropriate to deal with local conditions.

The City in its modifications to Part 5 has strengthened the application of the code for this climatic zone. The exceptions to requirements which allowed for inappropriate practices in this climate which in part lead to our current problems were eliminated. In its revisions, the City also included requirements for ‘Building Envelope Specialists’ to do ‘significant on-going field review’ of building envelope construction, a practice which some other municipalities have adopted, but appears will not be required in the BCBC. The City Building Inspector does not recommend weakening the current requirements in order to attain consistency with the Provincial Code. This item is dealt with in recommendation ‘B’ of this report.

The City Building Inspector supports this recommendation which is consistent with the direction of the current Vancouver approach. As noted above, at this point it appears that the BCBC will not be modified to require adoption of this requirement. This item is dealt with in recommendation ‘B’ of this report.

We will recommend revision of the letters of assurance in the VBBL to be consistent with the provincial letters if this recommendation is adopted.

We have no problem providing this information. The greatest misunderstanding arises from people who assume that the City plays a greater role in assuring quality construction than we do, without ever asking. By the time they ask there is usually a problem. The City review and inspection practices are designed as audit procedures to encourage compliance with code requirements in the design and field review of work under the responsibility of design professionals. It is important to note that the responsibility to ensure that work is done properly rests with the owner, the constructor and the design professionals. Municipal Inspection does not “ensure” bylaw compliance, it simply audits the process to promote compliance. We do not attempt to duplicate the efforts of the Architects and Engineers who accept the primary responsibility for code compliance through the letters of assurance.

This could have a significant impact on the City of Vancouver. The Charter currently exempts us from any liability arising out of our permitting and inspection functions. This recommendation would make the City liable in the proportion to which we are found responsible. Although the permitting system clearly makes the design professionals responsible for code compliance, the fact that the City is not specifically exempted from liability could lead to many more legal actions naming the City, which we would have to defend. This could lead to significant costs even if the City is never found to be liable. The City Building Inspector does not agree with this recommendation. The City should not incur liability for its permitting process which makes design professionals responsible for code compliance, nor its inspection function, which is effectively an auditing function to promote that compliance. Instead it is recommended that the legislation be changed to bring the liability of other municipalities in line with that which is in place for the City of Vancouver, to reduce the costs of defending legal action, and have funds available instead to enhance their plan review and inspection functions. This item is dealt with in recommendation ‘B’ of this report.

The approach that we have taken to increase the inspection of the building envelope in the Vancouver Building By-Law has been the adoption of the ‘Building Envelope Specialist’ field review requirements. This represents a significant enhancement of the review of these aspects of the construction. In addition, we will be carrying out in house training of our own inspectors to improve their knowledge in this area so that they can audit the work of the ‘Building Envelope Specialists’. If more direct inspection by City staff is mandated, additional resources will be required. We would recommend that the same approach be adopted in the Provincial Code. This item is dealt with in recommendation ‘B’ of this report.

This is a cost issue and impacts our ability to perform this function on a cost recovery basis. Following this recommendation would be counter to Council policy on full cost recovery. Council, however, may wish to consider this in order to assist owners faced with building envelope failures. The provincial government has indicated that they wish to consult with municipalities on this issue. If Council so chooses, they can direct us to review the cost implications in more detail. This issue is dealt with in item for consideration ‘D’ of this report.

Contractor licensing and regulation at the Provincial level was one of the items that the City Building Inspector recommended in his submission to the Commission. This item is dealt with in recommendation ‘B’ of this report.

This recommendation represents a significant additional cost per unit for new residential development. It includes single family homes as well as multi-unit buildings. The rationale provided by the report is that developers and builders ought to provide financial support for people most in need of assistance. It can be argued that this cost will be passed on directly to the purchasers of new homes, but this will only be possible to the extent that the market will bear cost increases. It can also be argued that the buyers of new homes will also benefit from the overall package of changes recommended by the report and that they will be better off paying the additional cost of this fee and of better construction than if they had to pay for repairs to their buildings in a few years. (See Appendix for letter from developer of projects in Vancouver for their concerns with additional costs). Staff have no recommendations with respect to this item.

There is currently no enforcement of this except in the case of electrical and plumbing trades. In these cases Trades Qualifications must be presented in order to obtain a permit. In addition spot checks and complaint responses are carried out on site. Broader enforcement of Trade Qualification requirements would have cost implications if the City were required to take on an expanded role. We will have to await adoption of provincial legislation to be able to review the impacts of this on the City.

The City Building Inspector strongly supports this recommendation. The lack of skilled trades in the residential construction industry is one of the significant causes of the current problem. This was one of his recommendations to the Commission. This item is dealt with in recommendation ‘B’ of this report.

This is in support of the previous recommendation but may prove to be a cumbersome way of ensuring that qualified trades are used. Measures taken under recommendation #34, and #37 may be more effective and meaningful. If the City is expected to monitor this requirement, additional administrative costs will result.

Some form of enforcement of a mandatory trades qualifications system will be needed. Whether that ought to be a role for municipal inspectors, and what form of “discipline” we would be able to impose is unclear. This item is dealt with in recommendation ‘B’ of this report.

The City Building Inspector strongly supports a mandatory warranty program for residential construction. He was pleased to see that the Commission has recommended a competitive private sector warranty program rather than a government backed scheme like Ontario’s. A competitive program should be an effective mechanism for weeding out poor performers in the industry through a claims based rate structure. This and the related recommendations, #39, 40, 41 and 42 are consistent with his recommendations to the Commission. This item is dealt with in recommendation ‘B’ of this report.

This would have revenue implications to the City of Vancouver. It needs to be recognized that these owners already experience tax reductions to the extent that their assessed property value is diminished by the damage to their building, and by the general devaluation of condominiums as a result of the general public concern over the leaky condo problem. Condominium owners should contact the B.C. Assessment Authority to ensure that their property is recognized for these repairs. They can also seek further tax relief through the assessment appeal procedure if they feel their assessment is too high. Further relief through permissive exemptions is not provided for within the Vancouver Charter, and in fact would not be advisable given that it would be redistributing costs to other tax payers. Therefore the Director of Finance does not support this recommendation.


The Director of Finance supports this recommendation, noting it is consistent with information already provided from the City. Through the Provincial Government's Land Tax Deferment program, property owners can defer their annual property taxes based on certain criteria, i.e. 60 years or older, a surviving spouse, receiving a disability allowance, minimum 25% equity in their home. The deferred taxes must then be fully repaid, with interest, when the property is sold or the owner passes away. This program is advertised periodically through the "CityNews" newsletter mailed twice annually with the City's property tax notices. This item is dealt with in recommendation ‘B’ of this report.

CONCLUSION

While staff do not necessarily agree with the specific details of all of the recommendations in the Barrett Commission report, the general thrust of the report in dealing with a number of difficult issues is worthy of support.

Staff strongly support the recommendations with regard to builder and trades registration and training, and the introduction of a mandatory new home warranty program.

There are several areas where we would recommend adjustments, or changes, to Barrett’s recommendations. These refer to the structure of the HPO, and changes to the BCBC and VBBL, and are addressed in the body of this report and in the staff recommendations to Council.

The full impact of some of the Commission’s recommendations such as the new contractor and trades registration and qualifications requirements, and the proposal to establish a provincial inspection function will not be clear until specific legislation or regulations are written. There will be impacts on City staffing needs if the City is expected to enforce some of these provisions.

Staff do not support Barrett’s recommendations for permissive property tax exemptions, or reduced liability protection for the City of Vancouver.

Further review and report back will be needed on the recommendations with regard to permit fee forgiveness for repair work and the recommended changes to the Zoning and Development By-Law to encourage better quality construction.

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