Planning & Development Report - COMMUNITY AMENITY CONTRIBUTION POLICY

Planning & Development Report

TO: Committee of the Whole FROM: J. Chow, Senior Planner DATE: March 28, 2019 MEETING: April 9, 2019 FILE NO: 0340-20-40 Policies – Dev. Serv.- Community Amenity Contribution Policy

COMMUNITY AMENITY CONTRIBUTION POLICY

RECOMMENDATION:

That the report from the Senior Planner titled “Community Amenity Contribution Policy” be received for information and comment.

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:

I concur with the recommendation.

DIRECTOR OF DEVELOPMENT SERVICES’ COMMENTS:

I concur with the recommendation.

DIRECTOR OF FINANCE’S COMMENTS:

I concur with the recommendation.

PURPOSE:

1. To present a draft community amenity contribution policy for review and comment.
2. To assess whether there is interest in moving forward with a community amenity contribution policy. If so, an Official Community Plan amendment should be considered to provide support for the policy.

BACKGROUND:

Following a series of major rezoning applications in the past few years, a question arose from Council on what an appropriate level of community amenity contributions (CACs) might be when rezoning for new development. A report discussing why a policy should be considered was presented at the June 12, 2018 Committee of the Whole meeting. The information in that report has been summarized and updated in Attachment 1.

DISCUSSION:

A draft policy is presented in Attachment 2 for review and comment. This report explains some of the key aspects of the policy: A. Principles behind the policy B. How does the policy compare to what amenities were negotiated in recent applications? C. How it addresses the Province’s recommended practices for community amenity contributions D. Recommended amendment to the Official Community Plan

A. Principles

1. Relate to Residential Development The policy would apply to rezoning applications for additional residential density, i.e. above what the current zoning for a property permits. This follows the practice of other municipalities in the CRD that have a CAC policy. As residential real estate prices have escalated over the past twenty years, community amenity contributions towards affordable housing have been one of the main reasons for establishing CAC policies in the region. Community amenities would still be negotiated on a case-by-case basis for commercial or industrial rezoning applications.

2. Prioritize Local Improvements Amenities that mitigate the impacts of development for the surrounding neighbourhood should be prioritized before general amenities that benefit the greater community. Many community amenities are identified and supported in the Official Community Plan, Parks Master Plan, and other Town documents. CACs can help provide for them, particularly if there is no set funding in place.

3. Set Targets That Are in Scale with The Region The development community is sensitive to costs that are passed on to purchasers because of the potential impacts on sales and overall housing affordability. However, applicants also appreciate having a good understanding of potential expenditures up front so they can determine project viability and how much they can afford to spend on acquiring land.

Target amounts of $5000 per additional unit for detached (single family) residential development and $3000 per additional unit for multifamily development are proposed. Staff consider these targets to be reasonable as they were determined by:

1. Adding the development cost charges and CAC targets from the municipalities in the region with CAC policies and finding the mid range (see Attachment 3).
2. Subtracting the DCCs proposed in draft Development Cost Charges Bylaw No. 1011, 2019 from the mid-range amount, leaving the remainders as CAC targets for the two types of residential development.

Municipalities with low DCCs can set higher CAC targets while those with higher DCCs may consider lower CAC targets. The proposed CAC targets are intentionally mid-range so that the combined costs of DCCs and CACs is in scale with the rest of the region and so that the Town will not miss out on community amenity contributions that could be made for a similar development elsewhere. The rate should be re-evaluated regularly, particularly since four other municipalities in the region are currently considering implementing or amending a CAC policy.

The other local municipalities with CAC policies are:

• Central Saanich
• Colwood
• Langford (outside core)
• North Saanich

Victoria and Sidney also have CAC policies, but they are linked to set density bonusing amounts. Victoria’s revised Inclusive Housing and Density Policy will focus on the provision of on-site affordable housing units and comes into effect in April. Highlands has a CAC policy but does not set a target.

4. Consider Appropriate Exemptions Reductions or exemptions may apply with the provision of residential units that would be rental or non-market/below-market in perpetuity.

5. Ensure Cash Community Amenity Contributions Are Disbursed Appropriately Most of the other municipalities in the CRD with CAC policies have established a general community amenity fund and report on expenditures annually. The Town’s practice has been to link cash CACs to specific projects. The draft policy instead suggests that where specific amenities are identified, that the funds can either be used for this purpose, or if Council finds a better use of the funds, that different projects can be considered and funded. This allows more transparency particularly if situations or priorities change.

Similar to other municipalities, a portion of cash amenity contributions may be targeted for affordable housing. The Town typically forwards affordable housing contributions to the CRD Affordable Housing Fund, where the funds can be leveraged for projects in the region.

B. Comparison of Recent Applications with Proposed Targets

Table 1. Estimated Community Amenity Contributions and Amount per Unit

Table 1 shows that in general, there may be opportunities for increased community amenity contributions using a target follows the norm for the region. For large projects over 100 additional units, land lift analyses are recommended because they take a structured, quantitative approach, but the results may not be what is expected because there are layered and complex factors the valuation of development properties. In circumstances such as Christie Point, the policy would recommend negotiation.

C. Provincial Recommended Practices

While there is no specific legislation on community amenity contributions, it would be prudent for a municipality to comply with other Provincial legislation and regulations for the development of land; for example, by avoiding ‘double dipping’ when securing amenities that are on a DCC project list. The draft policy is in general accordance with the Province’s recommended practices outlined in the March 2014 “Short Guide – Community Amenity Contributions: Balancing Community Planning, Public Benefits and Housing Affordability” (Attachment 4) as follows:

1. Avoid Legal Risk and Maintain Public Confidence a. The intent of the policy is to negotiate, not impose CACs. b. The intent of the policy is to avoid the perception that “zoning is for sale”.

2. Plan Ahead a. General community amenities are identified in documents such as the Official Community Plan and Parks Master Plan.

3. Seek Moderate Contributions and Follow an Approach That Balances Community Amenities and Housing Affordability a. CAC target rates are calibrated to be in the mid range with the local municipalities that have CAC policies. b. Where CACs are considered to greatly increase the cost of a project and affect housing supply and prices, negotiations may occur. c. The policy is open to strategies that can increase the supply and affordability of housing. d. Some municipalities have different target rates for different areas or circumstances, which can get complicated. The policy is intended to be straight forward and allow flexibility.

4. Engage the Development Community a. Staff recommends to engaging the development community prior to Council’s formal consideration of the policy in the same manner as the draft Development Cost Charge Bylaw update by notifying local developers, the local development industry (UDI, Victoria Homebuilders etc.), and other stakeholders, and by holding an open house to more directly engage those parties.

5. Choose an Approach to Obtaining Amenities (part) a. The policy is worded to allow flexibility and to consider impact on housing affordability. b. Conducting land lift analyses for community amenity contributions is the least supported approach by the Province. The Province CACs should not be linked to the change land value but to the “cost in providing a package of amenities that makes sense given the development being proposed”. Staff consider the land lift analysis to be appropriate for large scale projects because:

   • Rezoning can confer a windfall gain in land value for a property owner
   • Despite the time and cost involved the land lift analysis is a rationalised approach.
   • If there is a great gain in land value, staff consider it appropriate that a share of the increased value should be used towards amenities that benefit the community.

The draft policy departs from the recommended Provinces recommended practices as follows:

4. Apply Development Cost Charge Principles to CACs a. The Province recommends following the practice for DCCs, where a specific list of projects is developed that allocates the cost of an amenity between new development and existing development (i.e. the Town). Staff does not support this approach if it means projects could be held back for a long time before there is enough funding for a project to proceed. This would only be suitable for large non-DCC projects such as libraries, recreation centres, and police and fire protection facilities. The draft policy can still accommodate such contributions if Council proposes major non-DCC projects in the future.

5. Choosing an Approach to Obtaining Amenities (part) a. “Affordability by design” is the Province’s top preferred approach to obtain amenities. The guide advocates for zoning bylaws to allow design features that would reduce the cost of housing or allow additional units by such means as reducing or eliminating setbacks and parking requirements. This is similar to the Town’s provision for cash-in-lieu of parking, but staff advises caution because this approach in View Royal could create the risks of compromising community standards and losing the ability to take into account the local context of a proposed development. Council has the authority to grant variances, and each development proposal should be considered on its merits. b. The Province’s second preferred approach is density bonus zoning. Zoning Bylaw No. 900, 2014 allow bonus density in some zones for the provision of underground parking and green roofs. Bonus density zoning should be implemented with careful consideration because: i. such regulations are fixed once enacted in the Zoning Bylaw; ii. there is no opportunity for negotiation or neighbourhood consultation; and iii. the density bonus is purely a development proponent’s choice

D. OCP Amendment

If a community amenity contribution policy is supported, the following policy in Official Community Plan No. 811, 2011 should be amended to include reference to the CAC policy for clarity as follows:

Existing Policy:

Policy LU1.6 Community Amenities Foster the provision of community and neighbourhood amenities associated with new development through the development of amenity density bonus provision in the zoning bylaw or through negotiated Phased Development Agreements

Proposed Policy:

Policy LU1.6 Community Amenities Foster the provision of community and neighbourhood amenities associated with new development through the Town’s Community Amenity Contribution Policy, the development of amenity density bonus provisions in the zoning bylaw, or through negotiated Phased Development Agreements

NEXT STEPS:

The draft policy was developed to set targets that are in keeping with other municipalities in the region with CAC policies and is generally consistent with the Province’s recommendations.

1. If there are comments from the Committee of the Whole, staff can revise the draft policy.
2. Once the draft policy is satisfactory, staff can engage stakeholders (including the development community) for comments to be considered by Committee of the Whole prior to consideration of the final policy by Council.
3. The policy should be considered by Council only after the adoption of Development Cost Charge Bylaw No. 1011, 2019, which received third reading on March 19, 2019 and has been referred to the Inspector of Municipalities prior to final reading.
4. An amendment to the Official Community Plan to reference the policy in rezoning applications is recommended to include a reference to this policy when considering rezoning applications.

RECOMMENDATION:

That the report from the Senior Planner titled “Community Amenity Contribution Policy” be received for information and comment.

SUBMITTED BY: Jeff Chow, MCIP, RPP Senior Planner

REVIEWED BY: Lindsay Chase, MCIP, RPP Director of Development Services

ATTACHMENTS

1. Community Amenity Contribution Backgrounder (4 pages)
2. Draft Community Amenity Contribution Policy (4 pages)
3. DCC and CAC comparisons
4. The Short Guide to Community Amenity Contributions: Balancing Community Planning, Public Benefits and Housing Affordability – Province of BC, March 2014 (7 pages).