On the corner of No. 2 Road and Moncton Street, several large trees have been chopped down and an old home was bulldozed to the ground recently. In its place, four narrow homes, with a patch of grass not fit for Snoopy, will be built.
Further north, city councillors are mulling over a 133-unit townhome development on the former Steveston High site.
When developers densify land, more burden is placed on public infrastructure. One complaint commonly found amongst longtime Richmondites is the city’s seemingly unchecked growth.
Development cost charges (DCCs) address things such as road infrastructure, parks, sewers, and pipes. They also vary amongst neighbourhoods (City Centre developers are funding a new Canada Line station at Capstan Way). While Steveston High developer Polygon will be charged for upgrading such things, it will also need to pay community amenity charges (CACs) such as a planned $3.3 million childcare facility as well as affordable housing units.
While DCCs are based on essential infrastructure needs, city council can decide what to charge a developer for CACs, and therein lies the question: With the city claiming that about $4 billion worth of development is on the go, at various stages, does the city charge developers enough money when neighbourhoods densify?
According to Anne McMullin, president of the Urban Development Institute, an association promoting the real estate development industry, only Richmond, Vancouver and North Vancouver have CACs.
McMullin said CACs are generally demanded where densification occurs, to help support “the social side of development.” Polygon’s Steveston High development would add about 400 new residents and 200-plus cars to an area that was planned decades ago. As such, the city is also asking for parkland.
“If you go into a brand new neighbourhood, you’re not impacting them as much as old ones,” explained McMullin.
Hence, Surrey, which is rich in land, does not ask for CACs, but it charges more than Richmond for DCCs, likely because it’s building new infrastructure that is more spread out, explained Jeff Arason, Surrey’s manager of engineering.
McMullin said CACs can result in higher housing costs. Furthermore, charge too much and developers will walk away.
“It’s a balance of what the municipality wants and what the development can afford,” she said.
A recent example of how CACs played out was in the Hamilton neighbourhood earlier this year, when council passed a community plan that aims to densify the area.
Dana Westermark, of Oris Consulting, who represented the developers involved in the area plan, argued the city ought not to ask for money for a bigger school because the area needed a bigger school prior to (not as a result of) development. However, he did agree that since there would be a significant “land lift” — meaning the value of the land would rise significantly because of rezoning — developers would pay $19.2 million in CACs for additional community centre and library space, more police and various other items. They will also pay $11.2 million in DCCs for a waterfront park (since so few people will have a backyard).
McMullin notes developers will still make money off construction of the townhomes.
City council chose to take $19.2 million, which was 85 per cent of the lift. It did not accept options of taking 62 or 100 per cent.
Then there is the issue of the city’s affordable housing strategy, which largely consists of subsidized- to low-end market rentals, but also includes the likes of emergency shelters and entry level ownership.
Richmond is the only city in Metro Vancouver that requires developers to actually build affordable rental units (five per cent) in developments over 80 units. However, the city hasn’t always followed through on that, instead accepting cash-in-lieu.
That said, the city is now using some of that cash-in-lieu ($17 million) to help build a 129-unit complex for vulnerable residents.
The city also recently spent about $21 million on the Kiwanis seniors’ complex, leaving its affordable housing reserve relatively empty.
While, for the most part, the devil is in the details when it comes to development levies, how city councillors manage those details in large part determines how a city grows. With an impending civic election, candidates are being challenged on where they sit on the continuum between unfettered growth and debilitating development charges. Most will say in the middle, but residents will soon decide if a candidate’s middle, lines up with their middle.
