Attachment 1 (Part 1): Report Re: Payment in Lieu of Parking Space Requirements (May 2013)

COMMITTEE OF THE WHOLE

TO: Committee of the Whole
DATE: May 9, 2013
FROM: James Davison, MCIP RPP Planner
MEETING DATE: May 14, 2013

INTRODUCING PAYMENT IN LIEU OF PARKING BYLAW 853

RECOMMENDATIONS:

THAT Committee receive this report for information.

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:

I concur with the recommendations.

DIRECTOR OF DEVELOPMENT SERVICES’ COMMENTS:

I concur with the recommendations.

DIRECTOR OF ENGINEERING’ COMMENTS:

I concur with the recommendations.

DIRECTOR OF FINANCE’S COMMENTS:

I concur with the recommendations.

PURPOSE OF REPORT:

The purpose of this report is to present a bylaw for a payment-in-lieu option for parking variances as per the Council direction of March 20, 2012.

BACKGROUND:

Payment-in-lieu for parking variances allows a municipality to accept a cash payment over providing parking spaces as required by zoning. This option can only be exercised if Council grants a variance to the required parking within a zone. This will not apply to single-family or two-family zoning (R-1, R-1A, R-1B, R-2 or single-family CD zones such as CD-5) and thus not to secondary suite parking. Currently, if Council grants a parking variance there are no accompanying fees paid to the Town which could be used to offset the external impacts of providing fewer on-site parking facilities, nor fees designed to strengthen and encourage alternative transportation options in the Town and further offset parking needs. These general improvements are currently paid for through the capital budget so there is potential for real savings within this scheme.

A key point of consideration for this scheme is that funds collected need not apply to the development from which it is derived – it may be used anywhere within the municipality based on the greatest need. The cost of offset parking is great, in that the spaces needed for cars come at a land cost, a social cost and an environmental cost that is ultimately borne by the Town and its citizens.

PROJECT INFORMATION AND ANALYSIS:

Section 906 of the Local Government Act specifies the terms under which payment in lieu of parking required in a zone is acceptable. Moneys collected under this scheme are directed to separate reserve funds allocated either for the construction and maintenance of new and existing Town-owned off-street parking facilities, or for the construction and maintenance of alternative transportation infrastructure which supports walking, cycling, public transit and other forms of alternative transportation.

The bylaw is written such that two potential payments are identified:

• The base charge for a parking variance. This charge is designed to offset parking or alternative transportation needs in the municipality. The base charge is determined by the cost of providing surface parking in the municipality, as any off-set parking not located near a public parking facility would presumably be directed to surface parking. It’s ‘presumably’ in that the funds can also be used to create alternative transportation options in the hope that the real parking need disappears in favour of cycling, walking or public transit choices.
• Surcharge if the property in question is close to a Town-owned off-street parking facility. The second charge makes the assumption that there will be additional pressure on the Town-owned facility with a reduction in parking. The draft bylaw introduced here names a 250m distance.

The Town only has one off-street parking facility (at the corner of Six Mile Rd and Atkins Rd) and as such the great majority of the funds collected under the bylaw would only be subjected to the base fee and also allocated towards the alternate transportation reserve fund. The payment of funds for such a scheme must be made at the time a Building Permit is issued for the applicable building or other structure. If there is no building permit required, payment must be made at the time the use that requires the parking space specified in the bylaw begins.

Financial Reporting and Budgeting

Once obtained and allocated within a reserve fund, there is no requirement that the Town allocate the funds for specific future projects within a budget. Rather, the funds will be reported as being held and/or spent accordingly within the Town’s consolidated financial statements each year.

Amounts

A key component of the payment-in-lieu scheme is determining the amount to charge within the bylaw. If the charge is too much per parking space, it will provide a disincentive for a developer applying for a parking variance. Charge too little, and the Town risks not being able to recover costs associated with reducing the amount of parking available for land uses.

Staff believes that a rational starting point for considering a base charge is deriving the average land value of a parking spot and the associated manoeuvring aisle (approximately 33m² in total size) plus the cost of constructing the spot.

The 2013 assessed values of 33m² of property in View Royal is illustrated in the following table:

From this table, there is little consistency around land values, and the associated costs for parking. Staff believes that the lower end of the pricing structure is a reasonable starting point - $9000.

Staff has researched the costs for constructing parking facilities (including consulting the development community) and has determined that the approximate cost for constructing parking facilities is as such:

• Surface Parking: $5,000.00
• Above-ground parking facility: $15,000.00
• Underground parking facility: $40,000.00

The District of Oak Bay has such a scheme in place, adopted in December, 2000. It uses a $14,500 base variance fee and $9,700 if a municipally-owned parking facility is within 250m of the land use requiring the parking. One could expect that the charges would be more if the bylaw were written today, given the property value increase since 2000.

If the Town wanted to match the cost of parking, it would charge the approximate cost for the land ($9000) and the cost to construct surface parking ($5000) and use $14,000 as a base fee for parking and to charge $10,000 if the Town owns parking facilities within 250m of a Town-owned facility. However, there are reasons why the Town may want to charge less as a base fee, and this is related to policy goals identified within the OCP.

POLICY CONTEXT:

The amount to charge is to be considered in terms of what the Town’s goals are for acquiring the money. As most of the funds will likely go towards alternative transportation improvements, and considering that the variance must be granted before the money can be taken, the cash-in-lieu payment does not necessarily need to cover 100% of the parking space it replaces. This is also why one base fee is suitable for the entire municipality; the fee is applicable to improvements across the entirety of the municipality and does not apply directly to the site for which the variance is granted.

One can think of the scheme as a tool to meet the Town’s policy goals. If the goal is to raise money in exchange for parking that’s not actually needed on the site (ie there is a difference between what the Land Use Bylaw requires and what is actually required on the site) it makes good sense to charge a bit less for the variance to incentivise the process; especially where the Town’s Official Community Plan calls for reduced parking:

• Policy LU4.2 Support Walking, Cycling and Transit Encourage higher density and mixed-use development at neighbourhood centres and along major transit corridors to promote walkability, cycling and transit use. Support higher residential density, commercial intensity and reduced parking requirements in areas well served by transit.

• Policy LU4.7 Public Gathering Places and Outdoor Markets Encourage the development of public gathering places such parks, plazas and landscaped seating areas near activity-generating uses and mixed-use centres. Support public and outdoor markets in the Eastern Gateway Community Corridor, the Northern Gateway Community Corridor and the future Town Centre site through streamlined permitting and relaxed parking requirements.

As an example, given the imminent construction of the E&N pathway there is a major new corridor for alternate transportation coming to View Royal. It is doubtless that there will be capital projects available to the Town associated with that. It would make sense to collect funds to reduce the burden on the Town for funding such projects.

Increasingly, transportation engineering is moving away from being an auto-centric affair. In transit-oriented contexts, for example, the notion of a traffic (meaning automobile traffic) management plan is being replaced by mobility plans where all forms of transportation are considered and managed, including bus, train, bicycle, foot, and car traffic. Having a more balanced, flexible and sustainable response to reduced parking needs is in the Town’s interest.

As such, Staff believes that charging a base fee that is less than the cost value for a parking space would be in the Town’s best interests. Given that the cost value is approximately $14,000, Staff believes that to create an incentive to provide cash where parking is granted a variance we should be charging $12,000 for a base fee, and $10,000 for a space that’s within 250m of a Town-owned facility. Staff also believes that this amount should be revisited 18-24 months after adoption to see if that amount needs an adjustment.

RECOMMENDATIONS:

THAT Committee receive this report for information.

SUBMITTED BY:
J. Davison MCIP RPP, Planner

REVIEWED BY:
L. Chase MCIP RPP, Director of Development Services

ATTACHMENTS:

1. DRAFT Payment In Lieu of Parking Bylaw 853.