Vancouver Market - Tracking commercial real estate investment sales across Metro Vancouver — sale prices, cap rates, and $/SF data for apartment, retail, office, land, and development transactions. By David Taylor, SVP at Colliers International Canada.
Vancouver Market - Tracking commercial real estate investment sales across Metro Vancouver — sale prices, cap rates, and $/SF data for apartment, retail, office, land, and development transactions. By David Taylor, SVP at Colliers International Canada.
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Development, Market Research

Broadway Planning Program Comes Into Focus

The City of Vancouver will next week present a policy report  to the Standing Committee on Policy and Strategic Priorities that outlines the forthcoming Broadway Planning Program. 

The planning initiative seeks to develop a comprehensive land use policy plan for the Broadway area in conjunction with the anticipated Broadway subway extension to Arbutus Street. The overall Broadway Plan study area, shown in an outline below, includes lands from Clark Drive in the east to Vine Street (two blocks west of Arbutus Street) in the west. The north and south boundaries (16th Avenue) boundaries of the overall study area were determined by considering areas up to 800 metres from existing and future stations. 

From the report: “The plan will focus on opportunities to integrate development with the future transit along and around the Millennium Line Broadway Extension (Broadway Extension) to support the City’s goals of creating housing affordability, job space, social and cultural amenities, environmental sustainability and livability. Council is asked to adopt an interim rezoning policy that will apply while the planning program is underway and to approve an associated planning program budget.”

Timeline

The plan is expected to be finalized by December 2020, with the following anticipated 5 phases:

Initial – Background Phase (expected completion December 2018) comprehensive range of studies, including an area demographic profile, archaeological assessment, baseline utility capacity review, rate of change impact assessment, statement of significance/heritage assessment, transportation modelling, parking data collection and review, Broadway Extension project planning as well as other studies to inform the planning program work.

Five phases:

  1. Guiding Principles (expected completion June 2019) 
    • planning principles (coordinated with and informed by broader City Core 2050 guiding principles).
  2. Emerging Directions (expected completion December 2019) 
    • growth scenarios and patterns for change in land uses, housing, jobs, parks and public spaces, transportation connections and amenities (coordinated with and informed by broader City Core 2050/Economy Lands Studies, and Broadway Extension project design)
  3. Refining Directions (expected completion – June 2020) 
    • draft policy plan for land use, density, layout, built form, and design. This will
      integrate policies to increase social and rental housing, while retaining existing rental and increasing protection for tenants.
    • draft public amenity strategy addressing housing, community amenities,
      transportation connections, infrastructure, parks, public space, public realm
      improvements, and social and cultural amenities. 
  4. Finalizing the Plan (expected completion – December 2020)
    • final policy plan, including enhanced renter protection policy in the Rental
      Housing Stock ODP areas included in the study area.
    • final public amenity strategy.
  5. Implementation (to be determined)
    • rescinding Interim Rezoning Policy
    • referral of by-law amendments and subsequent policy amendments (e.g. to
      Community Plans)

Area of Study

Within the overall study area there is a focus area to be reviewed for potential land use
change as shown on the map below, shaded in purple. Generally, this includes the C-3A, C-2, RM-3/4, FM zoned areas, and parts of the Burrard Slopes mixed employment area within proximity to the station areas, as well as VGH and City Hall Campus. It excludes RS and RT zones, the False Creek South and the Southeast False Creek ODP areas, the majority of the Mount Pleasant industrial zones and False Creek Flats industrial and mixed employment zones. The RS and RT zones will be addressed through the ‘Making Room: Adding Housing Choice in Neighbourhoods Across Vancouver’ Planning Program, a key action item coming from the Housing Vancouver Strategy that is also going before council next week (click link above for details).

Policy Considerations

The City also notes a number of other policy consideration that will shape future development scenarios. These include:

  • The Rental Housing Stock Official Development Plan – City will explore renewal and retention of existing rental apartment stock. The rental districts within the study area make up one of the City’s core rental areas, containing 17,680 units of existing non-market and market rental housing – including 27% of the City’s total purpose-built rental units in areas covered by the Rental Housing Stock ODP. Planning work will explore potential future options for these sites, noting that rental replacement and enhanced tenant protection and relocation will be prioritized. 
  • Jobs and Economy Policies – the Metro Core Jobs Plan is being updated by the Employment Lands and Economy Review Study set for 2019. In conjunction with that study, the Broadway Planning will consider protection of lands for job space and provision of new commercial density. Existing industrial zones will be largely excluded, save for a small stretch on 8th Avenue.
  • Heights, Views & Other Considerations – 
    • Queen Elizabeth View Corridor (View #3) – testing will occur to explore whether select buildings along Broadway could enter into view 3.1 without
      eroding the overall view of the city within nature
    • Vancouver General Hospital Flight Path – VGH has a helicopter pad for emergency transport to and from the hospital. The VGH flight path is a wide apron that swings out to the north of the VGH heliport. Transport Canada limits building heights along Broadway – quite considerably between Oak
      and Laurel Streets.The City and VGH have agreed that proposals
      for new towers will be brought forward for review and discussion with VGH, Transport Canada and the helicopter operators. 
    • C-3A Guidelines (Views to City Hall) The Cambie Street (east side) C-3A Guidelines and Central Broadway C-3A Urban Design Guidelines which restrict heights along Broadway between Laurel Street and Yukon Street in order to preserve views to City Hall from public points along the north
      side of the False Creek seawall will be reviewed. 
    • Community Plans – The Broadway Plan study area includes lands covered by three Community Plans: Mount Pleasant Community Plan (2010), Kitsilano Neighbourhood Plan (1977), and Fairview (1974) – these will be reviewed as part of the process.
    • Vancouver General Hospital (VGH) and City Hall Campus – As both City Hall and VGH will be undertaking master planning initiatives to plan for their future in the near term, the larger context of these two major employment
      campuses and the area’s role as an important gateway to the City Core will be considered through Broadway planning.

Other Interim Measures

Interim Rezoning Policy During Broadway Planning Process

The City will seek to limit rezoning applications being made until the plan is finalized. It appears that new rezoning applications will only be considered for public or non-profit institutional, cultural, or recreational uses, non-market housing, or heritage retention.

New Policy Measure to Curb Speculation

As has been highlighted in recent media attention, the City will also put measures in place to prevent any land speculation over the planning phase under a new policy entitled: Development Contribution Expectations in Areas Undergoing Community Planning. This will include a new Development Contribution Expectation (“DCE”) that will charge a pre-determined rate based on existing zoning and independent consultants’ review of the economic viability of proposed projects factoring in the prioritization of job space and affordable housing.

From the report: “The overarching objective of the DCE policy is to curb land value speculation in the market. This objective is best achieved by providing buyers and sellers with clear and consistent information about the City’s priorities and objectives for the Broadway Planning program. With the information, buyers and sellers will be able to properly account for the City’s expectations when identifying a fair price for land on the Corridor.”

The report further notes that achieving additional density above existing zoning for strata will be limited.

The Broadway Planning Program policy report goes to Standing Committee on Policy and Strategic Priorities next week. A full version of the report can be viewed here: http://council.vancouver.ca/20180620/pspc20180620ag.htm

 

June 14, 2018by david.taylor@colliers.com
Development, Market Research

A Synopsis of the Housing Vancouver Strategy

By now you’ve probably seen in the media that the City of Vancouver has released an outline of the much anticipated Housing Vancouver Strategy, first announced in 2016 under then new General Manager of Planning Gil Kelley. 

For those unfamiliar, the Housing Vancouver Strategy was announced as a broad City-wide planning initiative intended to address some aspects of the current housing affordability crisis. The specific policies being proposed come as a result of over a year of public and expert consultation as well as internal planning review. As the City’s report outlines, the main intent of these policies is: “to address the rampant commodification of housing and speculative demand, shift our housing toward the ‘Right Supply’, and ensure affordability, protection, and support for our most vulnerable residents.”

Perhaps not surprisingly, the Strategy will yield significant policy changes in the year leading up to the Civic Election. Notwithstanding any political motivations, from a planning perspective, the Strategy is one of the most ambitious planning programs outside of any specific neighbourhood plan, and could result in significant changes to single family areas and the low density areas around East Van transit stations and some apartment areas.

Overall the ten-year plan is intended to create:

  • 72,000 new housing units, including;
    • 12,000 social, supportive and co-op units
    • 20,000 new purpose-built rental units
    • 30,000 new condo units (incl. 1,000 laneway homes and 5,000 townhouses)

The full staff report can be downloaded here: http://council.vancouver.ca/20171128/documents/rr1.pdf

Below is a summary of the ten key policy recommendations being proposed:

  1. A) Shift toward the Right Supply

The City plan to launch major planning programs near transit hubs that don’t yet have density including: Nanaimo Station, 29th Station and Olympic Village Station. The City is also already starting a Broadway Corridor Planning Program.

This is potentially the biggest takeaway for developers, investors and those in the RE industry. The Skytrain Station announcement had been anticipated for well over two years but had yet to be formalized in a policy announcement.

B) Implement the Moderate Income Rental Housing Pilot Program

This is essentially an extension of the Rental 100 program, except further incentives would be offered to developers that include 20% of the gross floor area to “moderate income households” targeting between $30,000 and $80,000 per year. 

The Pilot program will consist of 20 rezoning applications between January 2018 and July 2019. 

Incentives include: 

  • Additional density
  • DCL Waivers
  • Access to grants and senior gov’t financial support programs
  • Parking requirement deductions
  • Relaxation of unit size minimums (ie. micro suites)

C) Advance the Transformation of Low Density Neighbourhoods to Increase Housing Variety

This particular policy direction has the potential to be one of the most dramatic. It could entail densification of single family areas, both near transit and in other areas. The City specifically mentions “Low density areas in the western and southern areas” as candidates for new housing. Potential options being explored include: allowing multiple dwellings in low-density neighbourhoods, including secondary suites, multiple suites, laneway housing, duplexes, triplexes, and fourplexes with secondary suites; as well as the creation of new townhouse zones).

While perhaps not as transformational in terms of density as the Nanaimo/29th/Olympic Village areas, the prospect of townhouses in areas such as Kerrisdale and Dunbar could prove the most contentious and will be interesting to watch.

TIMING: Beginning in 2018.


2. Limiting Speculative Investment – Develop a New Policy to Stabilize Land Values in Planning Programs 

The City will seek to take quick action to limit speculation developing a new interim public benefits strategy designed to curb speculative value. The City would, for example, set the CAC target rate prior to the launch of new planning programs in an effort to curb speculative purchases. This will be tested initially as part of the Broadway Corridor Planning work.

TIMING: Beginning early 2018.


3. Develop a New 10 Year Affordable Housing Delivery and Financial Strategy 

The City is going to look at how to deliver more social and supportive housing through review of various delivery and business models. These include:

  • Investigating feasibility of establishing a housing endowment to
    build and sustain affordable housing on a portfolio basis
  • Clarifying the role and mandate of VAHA as the delivery agent for affordable housing on City land
  • Leveraging senior levels of government, non-profit and private sector partners
  • Specifying the partner investment and/or contribution required to meet housing
    Vancouver targets for the lowest income households

TIMING: Report to Council by Spring 2018.


4. Partner in the Development a 10 Year Regional Urban Indigenous Housing Strategy

The City intends on developing a strategy to work three local first nations groups to address housing issues over a 10 year strategy plan. The strategy will include the delivery of 500-600 housing units at five properties: 950 Main, 1015 E
Hastings, 1618 E Hastings, 1607 E. Hastings, and 235-285 E 5th Avenue.

TIMING: Already underway.


5. Launch a New Social Purpose Real Estate Incentive Program 

The City will also launch a new “Social Purpose Real Estate Incentive Program” to encourage development of new and redevelopment of existing non-profit housing on non-profit owned sites. The program will explore:

  • Enhancing the City’s Housing Infrastructure Grant program to support affordable housing where partners, usually non-profits and co-ops, are seeking to build affordable housing on their own land
  • Additional density, ownership of assets, aligning the per door grant with affordability, combined with low-cost and predictable federal and provincial financing
  • Supporting the development of affordable housing on land owned by faith-based and nonprofit service organizations

TIMING: a draft strategy/policy by Fall 2018.


6. Accelerate SRO Replacement while Improving the Existing Stock to
Enhance Affordability, Livability and Supports to Tenants

The City intends on protecting the SRO stock and SRO tenants through a “two-pronged approach”: 

  • A goal of replacing 50% of the remaining private SROs with new self-contained social housing in 10 years.
  • Improve the affordability, livability and supports for SRO tenants through: new SRO Revitalization Fund, an enforcement and regulatory approach to existing SROs and portection against further loss and displacement

TIMING: Already underway.


7: Temporary Modular Housing 

The City has requested BC Housing funding for 1,200 units over the next two years, with 600 units expected to be delivered in 2018.

TIMING: Already underway.


8. Increase Rental Protections

The City has always placed emphasis on protecting existing rental stock and this has become increasingly important as rents have skyrocketed and redevelopment pressure is at an all time high. 

The City will explore opportunities to redevelop existing rental housing in order
to increase the overall supply of rental housing, while prioritizing affordability and ensuring protections for existing tenants. The City will undertake a review of the Rental Housing Stock ODP and Rate of Change areas, to:

  • Continue to ensure no net loss of rental units
  • Reduce the threshold that triggers one-for-one replacement (e.g. from 6 to 3 units)
  • Identify opportunities to redevelop and expand existing rental housing while preserving affordability

The City will also seek to enhance capacity to assist tenants with relocation needs through the creation of a new Tenant Protection Manager.

TIMING: Report to Council by Spring 2018.


9: Remove Barriers to Support Diverse Ways of Living – Enable Collective
Housing

The City says that they “heard during the Housing Vancouver engagement process that more residents are living in non-traditional housing arrangements and forms to improve affordability and help them stay in the city (e.g. collective housing, co-housing, tiny homes, live aboard boat options, etc.)”

The City is going to look at ways to increase co-housing options, as well as relaxing regulatory issues associated with non-traditional housing. Hopefully this means more inclusive zoning.

TIMING: Report to Council by Spring 2018.


10: Cutting Through the Red Tape – Simplifying and Clarifying Complicated
City Processes

If the first nine policy directions weren’t ambitious enough, this one could stick out as being dubious among interested industry and planning observers. Certainly the City’s processes for applications, permitting and consultation have become absurdly complicated and long. 

The City outlines some initiatives to help tackle the overarching issues:

  • a comprehensive review of City regulations
  • Increase processing capacity and reduce processing times
  • The City will deliver a simplified CAC policy for rezoning projects that are 100% rental 

TIMING: As expected, there is no definitive timeline for this review, but it is apparently already underway.


Overall, the Housing Vancouver Strategy is fairly ambitious in that it will result in transformation of some single family neighbourhoods, likely those already near transit hubs or near existing shopping areas (think near C zones) such as Kerrisdale and Dunbar.

It is also interesting to note the extent to which land speculation has crept into policy conversation. I suspect that it will become increasingly difficult to determine land valuations prior to neighbourhood plan finalization. 

November 24, 2017by david.taylor@colliers.com
Development, Market Research

Port Moody Set to Establish CAC & Density Bonus Policy

Nearly three years following the City of Port Moody’s adoption of their new Official Community Plan, City Council will now be considering a new Community Amenity Contribution (CAC) and Density Bonusing policy for the City. 

While development has stagnated for close to a decade in Port Moody (even following the 2014 OCP), the arrival of the Evergreen Line and various amendments to the OCP since, coupled with the current market dynamics has led to a more recent uptake in rezoning applications. This led City staff to put forward the idea of a CAC policy in the past year.

The new policies are broken down between Density Bonusing and CAC’s.

Density Bonus Program

The density bonus program will be implemented as an amendment to the Zoning Bylaw, and includes the following major points:

  • The density bonus program applies City-wide, but is most often expected to be used in the Transit-Oriented Development Areas where higher densities will be concentrated;
  • The density bonus will apply to any development with a density greater than 2.5 FAR 
  • applies only to residential gross floor area. It excludes all forms of employment-generating floor space
  • does not apply to density used for low- and moderate-income housing since the City wishes to encourage these two types of housing, per the City’s Affordable Housing Reserve Fund Guidelines;
  • the financial contribution to the City is 75% of the land value of the additional density above an FAR of 2.5 (the land value will be determined on a project-specific basis using an independent professional appraisal, commissioned by the City and paid for by the developer);
  • in lieu of a financial contribution, the City may allow an amenity to be provided by the developer that is equivalent in value to the financial contribution.

Community Amenity Contribution Program

The City of Port Moody has never had a CAC policy although it does already have elements of a program in place including a public art contribution mechanism and the encouragement of developers to contribute toward the City’s Affordable Housing Reserve Fund. However, in the absence of specific policy, the amount collected has been negotiated on a project-specific basis and it has not been consistent (although it has generally been in the range of $2.00 to $3.00 per SF). The proposed CAC policy described below provides consistency and certainty for both developers and staff. It includes:

  • the program will apply to all areas within Port Moody with the exception of the 215A Levy Area of Inlet Centre
  • the CAC is set at $6.00 per SF of residential floor space being developed on a lot that is being considered for rezoning, to a maximum of $6,000 per residential unit (or per lot in the case of single family residential subdivisions);
  • credit will be given for any residential floor space on a lot that is being either retained or demolished as part of redevelopment;
  • the CAC program will apply to residential floor space up to a maximum density of 2.5 FAR, with any floor space above that subject to the City’s Density Bonus Program;
  • the CAC will be allocated as follows:
    • $2.00 to the City’s Affordable Housing Reserve Fund; and
    • $4.00 to the City’s proposed new General Community Amenity Contribution Reserve Fund

Council may, at its discretion, waive some or all of the CAC as part of a rezoning where affordable housing or another public amenity is being directly provided by the applicant.

September 8, 2017by david.taylor@colliers.com
Development, Market Research

City of Vancouver Inflates Density Bonus Contributions & CAC rates

The City of Vancouver is about to implement their annual inflationary adjustment to Density Bonus Contributions and target rate CAC’s. The density bonus contributions are basically CAC’s that are specifically intended for density bonuses associated with conditional zoning in a small set of pre-planned areas including: Mount Pleasant, Joyce Collingwood, Marpole and Norquay. 

The target rates for density bonus contributions in these areas are proposed to increase by 11.9%, and will become effective on September 30, 2017. The Mount Pleasant I-1A and I-1B zones are not being adjusted for inflation this year because these areas were only established as new density bonus zones in 2017.

DBCs 2017

For CAC’s the increase is at the same rate, with updated rates as follows:CAC Rate 2017

Expect even further updates to CAC target rates coming in late 2017 and early 2018 as the City of Vancouver seeks to “align with the updated needs identified in the Public Benefits Strategy.”

A full copy of the Policy Report on Density Bonus Contributions can be viewed here: http://council.vancouver.ca/20170725/documents/p8.pdf

The Policy Report on CAC’s is located here: http://council.vancouver.ca/20170726/documents/pspc5.pdf

July 20, 2017by david.taylor@colliers.com
Market Research

False Creek Flats Plan Nearing Final Approval

Next week the False Creek Flats Plan goes to Vancouver City Council for final approval of the draft. The plan encompasses 450 acres of land anchored by the future St. Paul’s Hospital and new Emily Carr campus.

FCFPThe False Creek Flats Plan planning process was originally launched two years ago and is now in final draft form after various stages of public input.

Here are a few details:

Existing Zoning

FCFP_1The Plan seeks to divide the plan area into four distinct sub-areas, as follows:

FCFP_2Health Hub

This area will be the main focus of development change; centered around the future St. Paul’s Hospital and will include uses that support health care and job space, as well as some new residential space.

Creative Campus

This area is located around three rapid transit stations and will be predominantly an employment area with some limited residential uses.

Terminal Spine

This area will see some modest density increases, but limited to industrial and employment uses.

Back of House

This area will continue to remain light industrial uses with a focus on food economies and a move away from low-employment uses like auto dealers and mini-storage.

For further information, take a look at the draft of the Plan here: http://council.vancouver.ca/20170517/documents/cfsc1-AppendixA-FalseCreekFlatsPlan.pdf

May 12, 2017by david.taylor@colliers.com
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David Taylor

Senior Vice President, Colliers Canada

David Taylor is a Senior Vice President at Colliers International in Vancouver, BC, specializing in the sale of commercial real estate across Metro Vancouver. He has sold over $1.7 Billion in office buildings, retail properties, apartment buildings and development land since 2004.

Vancouver Market chronicles investment and development activity in Metro Vancouver, including sale prices, cap rates, $/SF metrics, and market context for commercial real estate transactions.

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