Urbanarium debate, Tuesday Oct 8
On the province overriding municipalities
Urbanarium City Debate #17: Was the province right to assert its authority on land use?
When: Tuesday October 8, 7 to 8:30 pm
Where: UBC Robson Square Theatre
Tickets: general $20 plus tax / students $10
If you’d like to attend, but cost is an issue, I’ve got a couple guest tickets.
Helen Lui and I will be arguing for the Yes side, while Andrew Merrill (city of Coquitlam) and Sarah Ellis (formerly with the city of Vancouver) will be arguing for the No side, with Frances Bula moderating. We’ll each make seven-minute opening statements, then there’s some time for questions and responses, and finally there’s two-minute closing statements.
I’m a layperson, so I lack hands-on experience with development. But because I’m not a developer, I can be more candid in my criticism of the municipal regulatory process. (Of course I’ll still be polite.) It’s difficult for a developer to criticize regulators when they may be passing judgment on your projects in the future.
This is a fixable problem. We have people who want to live and work here, and we have other people who want to build housing for them. But we don’t let them. And then this results in a huge number of other problems.
To paraphrase the MacPhail Report: at the municipal level, we regulate new housing like it’s a nuclear power plant, and we tax it like it’s a gold mine.
Currently there’s three bottlenecks: the approval bottleneck, the cost bottleneck, and finally the physical construction. There’s always going to be a bottleneck somewhere. I’d argue that it should be physical construction, not the first two: we should be building housing as fast as we’re physically able.
There’s two distinct problems.
Slow and uncertain approval processes. In particular, the city of Vancouver has a very labour-intensive process - more like co-design than like regulation. And it’s extremely slow. Peter Miller wanted to replace three 60s-era duplexes in Kitsilano with a five-storey rental building. He spent eight years trying to get approval. He eventually got the rezoning and then the development permit, but never broke ground before he died in 2022, at the age of 85. The old duplexes are still there. In Edmonton, a developer can buy land and deliver housing in the same calendar year.
Costs. Even if something’s legal to build, it doesn’t make sense to do it unless the value of the new building, minus all the costs of constructing it, is going to be more than what’s already there. In Burnaby and in Coquitlam, they build a lot of housing, but they also extract a lot of revenue from it. They impose tight restrictions on land use, which means that land sells for a sizable discount. And then they require the developer to pay them most of that discount (70-80%) to relax those restrictions. They don’t have any incentive to bring down prices and rents (which would reduce the value of the discount), and in fact the current system imposes a price floor.
Without provincial intervention, municipalities have been moving in the right direction to open up the approval bottleneck, but it’s agonizingly slow.
On the cost bottleneck, municipalities are moving in exactly the wrong direction - they’re ratcheting up costs instead of trying to lower them. They need the money. And I don’t think most municipal politicians understand that redevelopment land values have been falling rather than rising.