(Updated) Any organization should monitor the outcomes of its decisions. The conclusion below is that at “The Lauren,” the City did not create “affordable rental housing” for the West End community. In fact, quite the contrary.
As you read this, here are two questions to keep in mind:
1. Should our municipal government be giving developers generous incentives like waivers of development cost levies, and large increases in density, to create expensive luxury rental housing like this?
2. Should the city be doing more to monitor rents being charged for buildings built with these developer incentive programs, to help guide future policy decisions around rental incentives and community planning processes?
In June 2012, City Council approved the rezoning and development of this former site of St. John’s Church to build a blockbuster 22-storey rental tower at the corner of Broughton and Comox Streets in the West End. At the time, West End Neighbours told City Council that if the rezoning application by Westbank Projects Corp. was approved, it would create some of the most expensive rental housing in the West End…and as you can see below, WEN was right! One could say that the City failed to created affordable housing on this site.
Not only did the developer get a good deal, the community also got hosed, receiving less than it should have in Community Amenity Contributions (CACs) and Development Cost Levies (DCLs).
Tenants first occupied the building in September 2014, so now, just over a year later, we are starting to see some turnover, and rents being advertised. See this listing on Craigslist (full text copied further below)
The listing indicates a monthly rent of $3,450 for a two-bedroom apartment. The first thing to note is that it appears the square footage represents false advertising, as the plans approved by City Council indicate this unit as having 843 square feet, not the 1,000 square feet advertised in Craigslist. See staff report on the project: http://former.vancouver.ca/ctyclerk/cclerk/20120515/documents/p1.pdf.
So, it appears that the listing is not providing prospective renters correct information about the unit’s size.
Now as for “affordability,” if we use the unit’s true and approved area of 843 square feet, this works out to rent being at $4.09 per square foot.
Compare this with the range of $2.00 to $2.96 per square foot that senior planners, under supervision of the Director of Planning, wrote in the staff recommendation for City Council to approve the project in 2012. Page 14:
Affordability —The main focus of the STIR [Short Term Incentives for Rental – developer incentives] program is to increase the supply of rental housing that is affordable to households seeking rental housing in the regular housing market. Affordability is achieved through modesty in unit size, finishing and design considerations. The development includes a variety of types of rental units including studios, one-bedrooms, 2-bedrooms, and 3-bedroom townhouses, which the applicant estimates will rent for a range of $2.00 to $2.96 per square foot per month, with specific rent levels varying depending on location within the building and unit size. This translates into the following monthly rents ranging from $860 to $1,209 for a studio, $1,128 to $1,465 for a 1-bedroom, $1,611 to $1,988 for a 2-bedroom and $2,320 to $2,541 for a 3-bedroom townhouse.A key goal of the STIR program was to create housing that is affordable to households that cannot afford home ownership. Staff have compared the anticipated monthly rents to the monthly costs of homeownership for the average priced units in the West End, using 2011 Multiple Listings Service data. The rental units in this project will provide an affordable alternative to homeownership, particularly for 2- and 3-bedroom units that are suitable for families with children. Monthly costs of ownership are higher than the anticipated rents by 50% for 2-bedroom units and 260% for 3-bedroom units.
As far as WEN knows, the City of Vancouver does not have a system in place to monitor the rental prices of projects approved by Council under the STIR and Rental 100 programs. What rents are eventually being charged in buildings approved under these incentive programs. What are the impacts on rents in the vicinity? The City does not have a system to track these, but anecdotal evidence suggests that rents are noticeable higher near “The Lauren” since it opened.
This case of “The Lauren” shows that City Council must set up systems to monitor outcomes. If the City’s rationale for approving a change in land use is to create a particular outcome, then the City has an obligation to monitor outcomes and confirm that objectives have been achieved. If certain promises are made by developers or by City staff, the public should have some confidence that these promises will be fullfilled. Otherwise future statements and promises by the senior City personnel and elected officials could be seen as meaningless.
Going beyond that, we believe it is fair to examine the approach to “community amenities” relating to major buildings like “The Lauren.” The anticipated rents under the City’s developer incentive programs are listed in a pro forma analysis by City Hall for each project, and Community Amenity Contributions paid by the developer are calculated based on that math. If, as in the case of “The Lauren,” actual rents are much higher than in the pro forma, this means the financial performance of the development is higher than expected, which means CAC’s should have been paid. In this case, Westbank got a good deal. The community got hosed.
Most of the developers benefiting from STIR and Rental 100 incentives are prominent firms in the Metro Vancouver region. They repeatedly return to mayors and councils in the region requesting new rezoning and development approvals. It would behoove our local governments to put in place the proper monitoring and follow-up in order to check the effectiveness of policies and decisions.
Elsewhere, there has been coverage of how tenants who only spend part of their time living in here were offering their units on AirBNB room rental service, which caused some concern about abuses of the City government’s STIR program, which was created with the intent of building affordable rental units to house people living in Vancouver. The conclusion at the time was that building management has an obligation to monitor and prevent sub-leasing and short-term room rentals.
A further comment about land assessments.
The property at 1501 Broughton Street (originally 1401 Comox Street) rose significantly in value as a result of the rezoning. But Westbank did not pay Community Amenity Contributions because the City’s real estate department and senior planning staff told City Council and the public there would be no increase in land value arising from the rezoning.
Under the City’s “Financing Growth” policy, the West End was entitled to 75% of the increase in land value arising from the rezoning of the property – funds to be directed as an investment in the community.
Assessment information for the proeprty at 1051 Broughton / 1401 Comox Street is shown below:
Assessment for 1051 Broughton / 1401 Comox Value increase in STIR sites in West End
Assessment value (land only) by BC Assessment
$5,960,000 for 2013 (as of July 1, 2012)
$24,842,000 for 2014 (as of July 1, 2013)
That is an increase of $18,882,000 in the value of the land after the rezoning in 2012.
Interestingly, Westbank appears to have appealed the assessment for 1051 Broughton (1401 Comox), so that as of January 2014 it was re-assessed as follows:
$11,179,000 (land only)
So apparently, by an appeal, the land value was chopped in half. (For assessment year 2015, the assessment for land rose to $13,663,000.)
The owner of the lot is listed as:
PW Comox Holdings Ltd., 501-1067 Cordova Street, Vancouver, B.C., V6C 1C7
For reference, Westbank had purchased the site in September 2009 (despite unsuccessful attempts by the community to have the City acquire or protect for community use the existing St. John’s Church, which had been rebuilt just 28 years prior and was still in good shape). The deal closed for $4.250 million at the time, below the United Church of Canada’s listed price of $4.495 million.
Craiglist as of 15-Nov-2015
$3450 / 2br – 1000ft2 – 2BR + 2BA in New Building with Water View Balcony (Vancouver)
image 1image 2image 3image 4image 5image 6image 7
© craigslist – Map data © OpenStreetMap
1051 Broughton St
2BR / 2Ba 1000ft2 available dec 31
cats are OK – purrr
dogs are OK – wooof
w/d in unit
Renting our 2-bedroom 2-bathroom corner suite at West End’s newest building, The Lauren, for the right people interested in a 6-12 month lease minimum.
Arguably the best suite in the building for views, we’re above the 20th floor and have a 270 degree view of the city from the suite. You can watch sunrise and sunset. There is also a balcony off the master bedroom that looks out to English Bay in complete privacy.
The Lauren sits on the quiet corner of Broughton and Comox streets and is the first brand-new residential rental tower in the area in over three decades. It stands 26 floors tall and boasts amazing views of English Bay and the North Shore Mountains and has a 360 degree panoramic view of the city and water from the rooftop BBQ lounge.
The Unit includes:
-2 Raindance Showers
-Large Corner Balcony
-Fantastic views to English Bay, Coal Harbour and the North Shore Mountains!
A few perks:
-Free Storage Locker
-Free Modo carshare membership (to be used on the vehicles in our parkade)
-15% off at all YYoga locations
-Discount card for the Shangri-La Vancouver and Fairmont Pacific Rim
*Building is pet friendly + allows BBQs!
The rezoning public hearing was in June 2012. Construction ended and first tenants moved in and occupied “The Lauren” in September 2014.
When the City of Vancouver adopted the Short Term Incentives for Rental (STIR) program in June 2009, despite public concerns, City Council did not put any limits on the amounts of additional density and height that a developer could be request under the program.
Neither did Council impose any limits on the amounts of rent that could be charged, so STIR-applicant/developers were charging the highest rents the market would bear. WEN launched a legal action (judicial review) and among other wins, succeeded in forcing the City to at least declare maximum monthly rents when a new building was first occupied, though too late for “The Lauren.” (Many people were shocked at how high those rates were.) But for buildings affected by the new limits, as soon as the first tenant moves it, the sky is the limit, and developers under STIR and its successor, the Rental 100 program, continue to charge as much as the market will bear. The City lets them.
Meanwhile, City officials defending STIR and Rental 100 may declare, “Increasing the supply of rental units will reduce rents in the West End.” Easy to say, but can they provide empirical evidence? Probably note. What we see at “The Lauren” seems to prove the opposite.
This City staff report “upped” the maximum permitted initial rents under Rental 100, dated May 27, 2015:
Page 9 notes: Once the rental building is occupied at the starting rents, rent increases are regulated by the Province through the Residential Tenancy Act.
In short, limits on maximum rents “evaporate” after the first tenant moves out.
An enduring question remains: Is the City of Vancouver creating the type of housing most needed in Vancouver at the moment?
To to conclude, with this topic of “The Lauren”:
1. Should developers be receiving generous incentives like waivers of development cost levies, and large increases in density, to create expensive luxury rental housing?
2. Is the city monitoring what is being created — to help guide future policy decisions around rental incentives and community plan processes?