Richmond city council will once again consider imposing rental-only zoning on certain properties in the city.
But the plan has been criticized largely by business and development “stakeholders” who say it could devalue the 60 properties identified throughout Richmond for this rezoning by 30 per cent.
Provincial rule changes allow municipalities to rezone properties as only allowing rentals, and those listed by city staff are currently 100 per cent rentals, some privately owned, others owned by BC Housing or Metro Vancouver. There are also 17 housing co-operatives included on the list.
Council considered this rezoning about two years ago, but then asked staff to do more consultation after several people spoke against it at a council meeting.
Feedback on the plan, included in a report going to council’s planning meeting next week, said it’s possible the value of the properties would go down, making it harder to secure financing, for example, for repairs and maintenance.
“Any loss of value should be equitably compensated,” was part of the feedback, not attributed to any particular stakeholder.
But John Roston with Richmond Rental Housing Advocacy Group, said developers who buy properties are gambling on city council rezoning them for condos.
He questioned how far this “compensation” should go, and whether single-family homeowners should ask the city for compensation because their homes aren’t being rezoned for condos.
While single-family homeowners in Richmond have “won the million-dollar lottery” with rising property values, Roston said, developers are upset this rental-only rezoning could mean they won’t win the “$20 million lottery.”
“I hate to say it, but it’s basically about greed,” Roston said.
The city elicited feedback on the rezoning proposal from the Urban Development Institute (UDI, the Richmond Chamber of Commerce and from two developers – Dana Westermark of Oris Consulting and Chris Ho of Polygon.
Richmond already has a policy that each rental housing unit that is demolished has to be replaced with another unit.
In the feedback, it states this policy “effectively protects the existing rental housing sites in the City.”
However, feedback done on LetsTalkRichmond indicated almost two-third of the respondents supported rental-only zoning.
Rental building planned in City Centre
There is one project in Richmond’s City Centre being planned as a 100-per-cent rental building.
But McGregor Wark, vice-president of the development company, Headwater, said this project is unique and he doesn’t think it can be replicated anywhere in City Centre.
The project at Lansdowne and No. 3 Road – where Cactus Club used to be located – is being developed as a “legacy” project by the family that has owned the land for 30 years.
They wanted to build something that would provide revenue for several generations, but also something that would benefit the community of Richmond, Wark said.
But because of the cost of land in Richmond, it’s not possible developers to create buildings that have 100 per cent rental units, he added.
“The only reason this (5500 No. 3 Rd.) works is because the family has owned this land for 30 years,” Wark said. “If a developer was to come into Richmond today and buy a piece of land – even with all the incentive policies that have been provided by the City of Richmond – there’s absolutely no way anyone would be able to build a rental project in the City of Richmond.”
Wark said he largely agreed with the criticism of the proposed zoning changes, saying eroding the value of the land by designating it rental only means future projects can’t get financing because financing is dependent on the value of the land.
One driving cost is demands from the city, for example, development cost charges (DCCs), which Wark said can amount to 25 per cent of the project costs, as well as parking requirements.
While parking was reduced in 5500 No. 3 Road project, further reductions would have allowed for 26 to 28 more units to be built, Wark explained.
The fact the rental building is going up right next to a busy transit hub should have allowed for further reductions in parking, he added.
(Coun. Andy Hobbs recently asked Richmond city staff to look into reducing parking in purpose-built rental projects and possibly waiving DCCs. This is currently under review by staff.)
There are now 149 units planned in the 15-storey building that will also have retail on the ground floor.
The 5500 No. 3 Road project will have some affordable housing units run by Tikva Housing, a Jewish non-profit housing society.
Construction is expected to begin in March with a completion date of 2024.
While the feedback from the stakeholders was in opposition to the rental-only zoning, city staff is still recommending council go ahead with approving this zoning bylaw covering 60 Richmond rental properties.
Example of a property proposed for rental only: 3851 Francis Rd. in the Seafair area
Value (BC Assessment 2021): $27,364,000
Land value: $17,839,000
Building value: $9,525,000
Taxes paid to the city: $92,649.69
OCP: low-density, low-rise apartment
Year built: 1969