Special advisor's report for Oak Bay
A close-up look at a low-growth municipality adjacent to Victoria
Provincial Advisor Report and Recommendations for the District of Oak Bay. James Ridge Consulting, March 2025. Press release.
The MacPhail Report identified two major bottlenecks to new housing: approvals and costs. In Oak Bay:
Council micromanages approvals, by making decisions on minor variances. The report includes three examples of applications that needed minor variances and were rejected by council.
Oak Bay has recently introduced development charges, with a municipal assist factor that’s basically zero.
On the political side, Oak Bay’s council is evenly divided between those who support and oppose housing, resulting in unpredictable decision-making.
One of the key issues facing Oak Bay is the District's reputation. Oak Bay has a powerful and long-established reputation for being unenthusiastic about development. This is an inevitable consequence of the District's low growth for decades. We heard repeatedly from people that they had paid a premium to live in Oak Bay so they would not have to experience growth or change.
Our observation in discussion with District staff and members of Council, including former members of Council, that the political dynamic of Council began to change after the 2018 election. After that election, more Council members supported building new housing. To Council's considerable credit, it has implemented several new policies after 2018 to support infill housing and second suites. However, today, Oak Bay Council members still consistently vote against housing and development. As well, other members of Council are more broadly supportive. There is a relatively even split on Council between those who usually support new housing and those who are typically opposed. Development and housing decisions often rely on one or two swing votes.
Micromanaging approvals
From the executive summary:
We found no evidence that Oak Bay is deliberately trying to circumvent or thwart Bill 44 or any other provincial legislation. In our opinion, they are making reasonable efforts to meet the housing targets. However, we did find processes, practices, and other circumstances that, in our professional opinion, hinder housing approval in the District. They include:
• A longstanding reputation for being anti-development.
• Outdated official community plan (OCP) and misaligned zoning require rezoning for most projects.
• Minor variances unnecessarily brought to Council, politicizing approvals.
• Developers are deterred by perceived risk and a politicized environment.
• Small-scale multi-unit housing (SSMUH) implementation is fair but limited: 14 applications. 10 require no Council input, and 4 involve variances.
When council decides on a minor variance for a project, it turns into a mini-referendum on the entire project: “Do you want your neighbourhood to change?” Unsurprisingly, the answer is typically No.
One of the most significant observations made during this review is that even relatively minor variances are considered by Council. This has the effect of inviting public input on minor variances. We observed that this created an opportunity for those opposed to the development in the first instance to publicly and formally restate their opposition again. Put differently, in some cases, people were ostensibly speaking to the variance, but effectively, they were taking another opportunity to oppose the entire development.
Moreover, putting minor variances in front of Council invites public input and opposition from people not impacted by the variance; people who live blocks away would experience no personal impact from a side-yard setback variance of a foot or two.
Therefore, we strongly recommend that the District delegate variances to staff. Staff have prepared and presented three reports to Council asking for exactly this, and in each case, Council has declined to delegate variances to staff.
The three staff reports were quite recent, in 2023 and 2024.
What this looks like, for a triplex application:
Development Variance Permit – 786 St. Patrick Street January 27, 2025
Observation: Following a review of the Staff Report and the video of the Council meeting, it was evident that the members of the public did not limit their comments to the variances under consideration but opposed the design, size, and density of the project. In their deliberations, members of Council did not address the proposed variances but instead suggested the density size and design were inappropriate. In this instance, the Variance Process provided an opportunity for an alternative form of public hearing in violation of the spirit and intention of Bill 44. It is also deeply problematic that the decision to deny the variance may have been made on considerations not properly in front of Council or the public for discussion.
Recommendations, from the Executive Summary:
• Variance decisions should be delegated to staff (recommendation: 90 days).
• OCP update is crucial to expanding housing opportunities. Current draft options support growth; no restrictive options are being considered. The Province should continue to monitor OCP and zoning update processes.
• Carnarvon Park is not a suitable site for housing - alternative sites recommended. • Cedar Hill Corners (40 acres) represents a key long-term opportunity but requires improved collaboration with UVic.
Ratcheting up the floor on prices and rents
Development Cost Charge and Amenity Cost Charge Bylaws, December 2024.
From the perspective of a municipality, there’s a strong incentive to stick newcomers with as much of the bill as possible. For Oak Bay, the 30-year bill looks like this:
Water - $22M total, $8M from new housing
Sewer - $9.4M total, $6.3M from new housing
Transportation (mostly for cycling routes) - $17M, $7M from new housing
Parks - $11.5M, $7.1M from new housing
Fire hall and police station - $48M, $12M from new housing
The resulting development cost charges (DCCs) and Amenity Cost Charges (ACCs) on new housing:
By increasing costs, Oak Bay is ratcheting up the floor on prices and rents for new housing, which also increases prices and rents for existing housing, since they compete with each other. It’s a leaky bucket: Oak Bay gets the revenue for new housing, but the higher rents for existing housing are just a windfall for landlords.
From the perspective of people who want to build housing, these cost increases are pushing more projects underwater:
Council decided not to include a phase-in period.
The special advisor’s assessment is somewhat less harsh:
It is the case that DCCs and ACCs are typically passed on to the buyer. While they are not a tax, they make new homes less affordable, a legitimate issue in Oak Bay, where houses are already unaffordable to most of the population.
In the Council report dated December 9, 2024, Council was given four options and chose to implement the DCC and ACC bylaws immediately (with the legislated 12-month grace period). Staff also gave two other options (listed below), which may have been better under the current circumstances.
Option #2 (phased-in approach). Council could choose to reduce the rates in either or both programs through a temporary increase in the municipal assist factor.
Option #3 Council could choose to reduce the rates in either or both programs by increasing the municipal assist factor permanently.
In a low-growth community with aging infrastructure, the allocation of benefits also becomes essential to ensure new development pays a fair share of the costs, and the benefits are fairly allocated between existing residents and new. In this case, the allocation of benefits seems fair, but an increase in the municipal assist in some cases would help to transition the impacts of the new charges.
More
Previously: Opposition to new housing in Oak Bay, October 2023. Ravi Kahlon appoints special advisors in West Vancouver and Oak Bay, February 2025.
BC Gov To Order Changes In West Van And Oak Bay After Missed Housing Targets. Howard Chai, Storeys, May 2025.
B.C. releases recommendations to accelerate new housing in Oak Bay and West Vancouver. Maryse Zeidler, CBC News, May 2025.
Oak Bay has made 'reasonable efforts' to meet housing targets, advisers find. Cindy Harnett, Victoria Times-Colonist, May 2025.