1142 Granville Street Case Study
On November 2, 2010 media reported the groundbreaking of Vancouver’s first project under the STIR program.
Coverage on CTV at 5 pm on November 2, 2010.
The project is currently under construction and proposes to include 106 market rental apartments, each with a floor area of 320 square feet.
Development statistics on the project are as follows:
Address: 1142 Granville Street
Site area: 8,993 sq. ft.
FSR under original zoning: 3.5
Original permitted floor area: 31,476 sq. ft.
FSR approved under new zoning: 5.72
New permitted floor area: 51,439 sq. ft.
Price paid for land: $3.47 million
Cost of land per sq. ft. of land area: $386
Cost of land per buildable sq. ft. under original zoning: $110.24
Cost of land per buildable sq. ft. under new zoning: $67.46
Dwelling Unit Count: 106
Dwelling Unit size: 320 square feet
Rent per Square Foot: $3.00
DCL’s Waived under STIR: $638,000
CAC’s paid under STIR: $0
Estimate of Reduced Property Taxes over life of building: $1.8 million
In summary, the developer paid $386 per square foot of lot area, or $110 per “buildable” square foot under existing zoning. The developer requested a 63% density bonus to accommodate STIR rental housing and achieved an increase in the permitted floor area on the site of 19,963 square feet, lowering land costs to $67.46 per “buildable” square foot of floor area. The STIR program also allowed the developer to avoid avoided paying $638,000 in Development Cost Levies and any Community Amenity Contribution in relation to the increase in zoning potential for the property.
The site will be eligible for Rental Property Assessment under STIR and City staff advise that based on estimates from BC Assessment there could be a 10 to 20 percent reduction in the assessed value of properties constructed under STIR. Because forgone tax revenues will be shared by properties in all classes as part of the tax distribution process, other taxpayers in the City end up with increased tax bills to compensate for the reduced payments on STIR projects.
For the STIR project at 1215 Bidwell Street, City staff estimated that the impact of rental property assessment would amount to approximately $17,100 per rental unit over a 60 year period. Using this as an average value, the building at 1142 Granville Street would result in a loss in City tax revenue of $1.8 million over this 60 year period. On an annual basis, 1142 Granville Street would benefit from a reduction in municipal taxes associated with the rental property assessment in the order of approximately $30,000 per year – a reduction in annual operating costs for the building owner.
WEN submission to mayor and council at the June 22, 2010 public hearing on rezoning
June 22, 2010 Mayor Gregor Robertson and Vancouver City Council (Sent by e-mail)
RE: Comment on June 22 Public Hearing Agenda #5 (Rezoning: 1142 Granville Street)
We wish to comment on four issues relevant to the subject rezoning, and in particular, the Short Term Incentives for Rental Housing (STIR) program components: (1) the determination by the City Manager “that there is a measure of affordability for this housing”; (2) deviations from the relevant bylaw that erode the liveability of these units; (3) unsubstantiated claims relating to a need for activity and residential density in the area; and (4) the process by which residents are notified (or fail to be notified) of substantial modifications to an application under the STIR program, which is already an expedited application process.
1. Measure of affordability – Proposed apartments in this building are 320 sq. ft., and according to the developer, will rent for an average of $960 per month; prospective renters will therefore pay an average of $3 per square foot for these apartments. How does this rate compare with the City average?
Characterizing these units as achieving a ‘measure of affordability’ renders the term ‘affordable’ meaningless. If the city wishes to characterize rental accommodation as affordable by definition – regardless of the price per square foot or the absolute monthly price of the apartment – then we believe that the bylaws supporting STIR should be modified to exclude Clause G that relates to affordability.
2. Livability – At 320 sq. ft., the unit sizes of these apartments are 78 sq. ft. smaller than the minimum size required by Section 10.21 of the Zoning and Development Bylaw, which requires at least 398 sq. ft. We believe the small size of these apartments may erode their liveability.
Further, the city’s explanation for allowing this substantial deviation in minimum size further detracts from the application’s claim to affordability: City staff submit that the building’s central location on Granville Street will enable individuals to “expand their living space.” This statement assumes that individuals will spend significant time during winter months in the shopping and eating establishments in downtown Vancouver, which requires a certain level of disposable income and will therefore attract a wealthier tenant.
We argue that a program that incentivizes construction of rental accommodation should not also contribute to a deterioration in standards. This is not fair to renters, nor is it fair to taxpayers, for whom the project is not cost neutral. The quality of these units and their liveability for generations of renters is particularly important when considering their 60-year designation as rental accommodation.
3. Requirement for additional activity and density – The City’s Policy Report contains an unsupported claim on page 8, which argues this application will “[add] much needed activity and residential density” to downtown Vancouver, and particularly to Granville Street. We submit that needs for additional activity and residential density should be pre-identified by the City in a consultative process with surrounding business and residents. These needs should then be implemented in a planned and transparent manner.
This statement is included without substantiation, and is particularly disrespectful to residential and local business because it is included in response to the genuine concerns voiced by neighbours about the proposed development.
4. Process for notifying residents of modifications to STIR Program Applications – The STIR program enables concurrent processing of the rezoning and development permit applications to provide an expedited process; given this shortened timeframe, we believe it is critical that surrounding residents and businesses are notified of substantial modifications to an application, and are provided with time to formulate their response to the proposed change to their neighbourhood.
This application’s FSR has increased substantially from the time of the notification to residents on June 1 to the date of this hearing. The original application requested a bonus density to 5.72 FSR, which amounts to an increase of 19,923 sq. ft. above zoning. From the time of this June 1 notification, the requested density has again increased to 6.33 FSR, amounting to an additional 5,485 square feet. This is a substantial modification, and we argue that a substantial modification should trigger a re-notification process for surrounding residents, which would include a new “Notice of Public Hearing” and an appropriate delay in the scheduling of the hearing.