Top planner left in midst of rental-replacement debate
HISTORICAL CONTEXT - how did we determine areas to be covered by RHS ODP?
It remains a mystery why the general manager of planning, urban design, and sustainability, Gil Kelley, parted ways with the City of Vancouver. Longtime city hall watcher Mike Howell has reported that Kelley will receive severance. This suggests he wasn’t fired for cause. Over at CBC News, reporter Justin McElroy wrote that “if you read between the lines, it’s fairly clear it wasn’t exactly his choice”.
McElroy also suggested that “all indications are that it was sudden, based on general dissatisfaction rather than any specific situation”.
But could it be linked to an extremely controversial policy regarding the preservation of rental housing in commercial districts? It’s an area that hasn’t been fully explored to date.
One thing is clear: during Kelley’s fourand-a-half-year tenure as the top planner, he supported rezoning applications and promoted policies to sharply increase the supply of rental housing.
In fact, more than half of the total housing units approved last year were purposebuilt rental. This reflected Mayor Kennedy Stewart’s oft-stated desire to dramatically increase the supply of rental housing.
Intriguingly, Kelley’s departure occurred just as council was in the middle of addressing a report he presented to council. It recommends that council amend the Rental Housing Stock Official Development Plan. This would extend a requirement for one-to-one replacement of
existing rental housing units to four commercial zoning districts.
However, the text in the report suggests that Kelley had serious concerns if this recommendation went ahead. But he had no choice but to make it because council instructed him to do this twice in 2019.
Right now, this one-to-one replacement applies to new developments of three or more units in apartment-oriented zones and in comprehensive-development zones, according to the staff report.
On March 11, council heard several speakers with diametrically opposed views on the recommendation. Then on March 15, the city announced that Kelley was leaving his position. The public hearing will reconvene on April 1 without Kelley as the city’s planning director.
City staff saw several negative consequences resulting from amending the policy. The report notes that staff had “previously recommended” to elected officials that the Rental Housing Stock Official Development Plan not be expanded to commercial areas.
“Commercial areas, along with other areas zoned for non-residential uses, were not originally included in the Rental Housing Stock ODP because they contained significantly less existing purpose-built rental compared to residential multifamily areas,” the report states.
The report also suggests that the status quo seems to be showing results. The vacancy rate in purpose-built rentals rose
from 0.6 percent in 2015 to one percent in 2019 and then to 2.6 percent in 2020, due to a pandemic-related reduction in demand for rental housing.
Extending the one-to-one replacement rule into commercial areas has strong support from the Vancouver Tenants Union. A vast majority of tenants who responded to the city’s survey also supported the change.
However, the recommendation to extend the one-to-one replacement rule is vehemently opposed by the Urban Development Institute, which represents the development industry. More than 90 percent of property owners who responded to the survey also disagreed with the amendment.
At the March 11 public hearing, UDI chair Beau Jarvis characterized the recommended amendment as equating to “a mass downzoning without compensation to property owners and will ultimately destabilize the very system that our industry relies on”.
Jarvis added that this would hurt “every single property owner in the city” as $500 million in equity would be wiped out. He also said that Canada’s large chartered banks were likely to change lending practices in Vancouver if council went ahead with the recommendation.
These comments drew condemnation at the public hearing from Kareem Ibrahim, an advocate with the Vancouver Tenants Union. He described Vancouver as “hilariously unaffordable” and accused the development industry of engaging
in “fear-mongering rhetoric”.
“We have people who cannot afford to move out of their home,” Ibrahim said.
There are 380 purpose-built rental buildings with 3,050 rental units in the four commercial zoning districts mentioned in the report. That’s about four percent of the city’s purpose-built rental housing stock.
If council approves the recommendation, it would mean that the Rental Housing Stock Official Development Plan would apply to 81 percent of purpose-built rental stock in Vancouver, up from 77 percent today.
The report points out that only 81 units of existing rental stock have been lost in the four commercial zones over the past decade without the one-to-one rental-replacement rule. This has been due to strata projects.
That has been offset by a gain of 691 new rentals in the same commercial areas as a result of rental-incentive policies.
A slide presentation at the public hearing indicated that older buildings have far lower rents than newer purpose-built rental buildings.
If the amendments were to pass, the report states that this would result in a reduction of land values, leading to “uncertainty around land value assessments”. In this regard, it reinforces Jarvis’s comments.
The report also notes that this would lead financial institutions to reevaluate loan guidelines for strata redevelopments with rental units on site.
“This will result in lower loans to equity for developers and landlords,” the report states. “The impact can be significant, particularly on existing loan applications. In addition, the proposed policy change could impact a landlord’s ability to finance maintenance or operating costs.”
Kelley didn’t speak about the report to council at the March 11 hearing. Instead, senior planner Edna Cho delivered the staff presentation and explained the slides.
Here’s another interesting aspect of the discussion: council voted to put off asking the staff questions about the recommendations until the hearing reconvened. Did they know at the time that Kelley was already on his way out the door?
At this point, nobody is talking because issues involving labour relations are held in-camera.
One thing is clear: a fair number of council members—and possibly the majority—may be prepared to go ahead with requiring one-to-one rental conversations in four commercial zones. This would be supported by advocates for tenants, a key Stewart constituency. But it could be coming in the face of vehement opposition from developers and banks, whose executives have often traditionally supported NPA politicians.
And just as this may be about to occur, the city’s general manager of planning, urban design, and sustainability was replaced on an interim basis.
It reminds me of a quote on coincidences from motivational speaker Wayne Dyer.
“In mathematics, two angles that are said to coincide fit together perfectly,” Dyer declared. “The word coincidence does not describe luck or mistakes. It describes that which fits together perfectly.”
We have people who cannot afford to move out of their home.
– tenant advocate Kareem Ibrahim