STIR backgrounder

West End Neighbours Challenges Short Term Incentive for Rentals (STIR)

November 15, 2011

Background Paper Executive Summary

On behalf of West End residents, West End Neighbours (WEN) seeks to address concerns about the Short Term Incentives for Rental (STIR) program and the waivers provided developers for the provision of market rental housing. These concerns have been expressed by the over 12,500 residents who have signed a petition asking for a stop to site-specific rezonings in the West End until a comprehensive community plan is in place.

WEN is concerned about the need for development that is appropriate and for the West End’s ability to accommodate new residential growth, including increased pressure on community amenities and a lack of public funding options to address this pressure. Developers of STIR projects are granted incentives for larger buildings and faster rezonings, while the neighbourhood is left with aging facilities and no new funds to repair them. WEN is apprehensive that these kinds of out of scale and out of character developments will profoundly change their community and will not address the stated objective of the STIR program – to help address housing affordability by increasing the supply of rental accommodation.

In examining the STIR program and its legal basis, it is WEN’s contention that:

1. The Vancouver Charter does not give the City of Vancouver the authority to waive Development Cost Levies (DCL’s) for market rental housing.

2. The City of Vancouver has improperly delegated Council’s legislative authority by granting the City Manager the discretion to determine the affordability of for-profit affordable rental housing development proposals in the manner that it has done.

3. The definition of “affordable” under the by-law is too vague and uncertain to be enforceable.

WEN considers that its position is legally supportable. Based on these conclusions, WEN requests that the City of Vancouver cancel the STIR program and refrain from similar incentive packages to avoid providing additional development projects with inappropriate DCL waivers.

Further, WEN requests that the City of Vancouver stop giving inappropriate benefits to developers for the creation of market rental units through granting increased density, forgiving property taxes, eliminating community amenity contribution (CAC) requirements, reducing parking requirements and waiving Development Cost Levies (DCL’s) on the argument that STIR is supplying “affordable” rental housing. STIR is providing market rental housing that benefit developers and the costs to the City and to its taxpayers are too high.

STIR is creating some of the most expensive rental housing in the City. It is not helping to address housing affordability – in fact it may be worsening affordability issues by encouraging nearby multi-unit building owners to renovate suites to compete with the new units.

The program is offering incentives to developers to create market rental units with no rent cap, and is creating long-term investments with almost guaranteed income for the investors attracted to these types of properties.

The incentives offered are resulting in deficiencies that must be made up by other taxpayers, and the projects created are damaging livability and neighbourhood character. Public money and City Council’s discretionary zoning powers should not be used in this way.

Residents must have confidence that their City administration is being operated in a transparent and legal manner and while STIR is a program with worthy goals, it is one that has been rushed into the implementation stage without sufficient consultation or analysis.

The legal framework of STIR is flawed and the City Manager has been waiving Development Cost Levies for these developments without proper authority.  These inappropriate waivers must stop and if rental housing is to be encouraged, a revised rental incentive program should be established.

You can read the media release WEN Release_Scrap the STIR program_Nov 15, 2011 and the background paper STIR Background – WEN Challenges STIR_Nov_15, 2011.

The STIR Background paper provides a wealth of information about the STIR program including the adoption and implementation of STIR, the definition of “affordable”, the legal basis for the program as well as the financial and other costs associated with it. There is also information about some of the rezoning sites and a case study showing the major benefits provided to developers that implement STIR.