During the Council meeting on October 7th, we received a report from staff recommending a number of changes, the crux of which were to transition to a heights-based framework (over a “Floor Area Ratio” framework), to lower the inclusionary zoning requirements to 10% of the overall building’s units, at 5% “Burnaby affordable” and 5% CMHC median, and that developments in Edmonds be required to build 0% inclusionary housing.
I moved 4 amendments with the goal of increasing affordable housing, with Cllr Dhaliwal further amending the % of inclusionary required. The amendments Council passed are the following:
THAT staff achieve a minimum of 15% affordable housing (10% at 20% below CMHC median rents and 5% at CMHC median); and,
THAT staff explore and report back to Council with tools not yet explored to improve viability of development; and,
THAT staff consider market strata density transfer from Edmonds to the rest of Burnaby, in order to achieve at least 5% of inclusionary zoning (CMHC median) in Edmonds with the goal of equalizing the percentage of inclusionary zoning with the rest of Burnaby; and,
THAT Southgate be excluded from Edmonds and aligned with the rest of Burnaby in inclusionary zoning requirements.
There’s a lot to talk about when it comes to inclusionary zoning, so I’ll try to keep it as clean as possible while getting into the nuance and detail that I think is necessary to do justice a complicated issue.
To start:
Inclusionary zoning is when you require a developer to build a certain percentage of units of affordable housing when they build new projects. Inclusionary and affordable housing are sometimes used interchangeably in the context of inclusionary zoning policy.
While Burnaby’s policy before was “20% of new units”, it was actually 20% of base density. In order to offset the cost of building the inclusionary housing, Burnaby would give offset density to the developer. And, on bonus density that developers purchased, no inclusionary was required from that density. As such, overall, most developers were building about 11-15%, depending on where they built — as offsets were different across neighbourhoods. Most of the rezonings that I’ve voted on in my time have been about 14-17%, with the lowest being 11% due to a higher percentage of market rental units. Inclusionary housing previously was always priced at “Burnaby affordable”: 20% below CMHC median for the neighbourhood. For a 1BR apartment, that’s about $1070 in Central Park/Metrotown, $1280 in North Burnaby/Brentwood, and $1100 in Edmonds/Southeast Burnaby at 2023 rents.
The main reasoning behind staff’s recommendation on lowering the inclusionary zoning requirements was that the financial analysis showed new development wouldn’t be possible due to the escalating cost of materials and labour, decreased uptake by buyers due to increased interest rates at the federal level, and the cost of ACC/DCC fees (new fees established by the City of Burnaby). Of those, only ACC/DCC fees and inclusionary zoning are within the City’s control.
Here are the main considerations I made when looking at amendments:
0 affordable housing is worse than some. If a policy is perfect on paper, but doesn’t result in any actual affordable housing being built, we are tangibly failing people. We are making life materially worse for working and low-income people.
The amendments around reducing the percentages of affordable housing are only because the metric for measurement changed. We no longer can use offset density, which means that the overall number of units of affordable housing does not change significantly.
Edmonds is where the most affordable housing is needed.
It’s also a town centre that is split into two “nodes” — Southgate being a massive portion of the Edmonds town centre, and very likely the first to develop.
It’s also where virtually all of the City supported affordable housing is — with a proposed unit count of 11,443 rental units (20% of which at least, will be non-market as these are provincial/city/non-profit projects).
It’s also where the Burnaby Housing Authority will be concentrating its efforts.
5% CMHC median in the area of Edmonds that isn’t Southgate is better than 0%, because CMHC median rent is essentially a form of vacancy control and we need those. It’s also still much more affordable than anything market — about $1300 in Edmonds for a 1BR at 2023 rents.
The amendment was also clear to direct staff to prioritize affordable housing over collection of other fees, like ACC/DCC fees, and to be creative about ways to make the numbers work.
A quick dive into ACC/DCC fees:
ACC stands for Amenity Cost Charge and DCC stands for Development Cost Charge.
ACC fees are new, introduced by the province with their new legislation that enables a lot of growth and new housing. These fees are to help pay for amenities like community centres, pools, libraries, and other amenities that are important to maintain as communities grow.
DCC fees are to pay for things like new water mains, sewers, parks, and roads.
There’s a lot of disagreements on how costs are calculated and the fairness with which these costs are distributed across taxpayers, renters, and new homeowners. There’s arguments on what the proportions of these costs should be borne by new growth as opposed to what proportions should be paid for by taxpayers, because ultimately the benefits are hard to actually pin down. For example, if a new community centre is built using ACCs, but there are existing residents who benefit from it, it can be difficult to fairly allocate who should be paying for what portion of the costs.
There are also geographic discrepancies between where growth is going to trigger significant infrastructure upgrades. Rezonings that we approve in our Town Centres mostly have infrastructure built, or the developer is required to upgrade intersections, sidewalks, bike lanes, roads, sewer mains, and other infrastructure as part of their project. Small-scale multi-unit housing, on the other hand, will just go through the building permit process, and as such wouldn’t be responsible for paying for infrastructure upgrades, and will likely be in states of needing greater upgrades.
Some of the points I brought up to decrease the overall cost of housing to allow for an increase of affordable housing:
a deferred collection of municipal fees until occupancy — this decreases the amount that a housing developer needs to have upfront (which they get through loans, which they then pay interest on, which end up being passed down to the homeowner/renter). While this doesn’t significantly impact the city, as we only make ~2-3% interest for ~2 years, this does significantly impact the builder, because they can finance just the construction costs, and then use the equity they get through sales to pay the municipal fees.
incorporation of soft-cost cost-savings associated with transitioning from FAR to a height-based framework into ROI calculations — this is because we have to prove to the province that our inclusionary zoning does not impact the viability of development. Soft costs are a significant portion of housing development, and refer to the amount of human hours needed to calculate very specific details that were required through a very labour-intensive FAR approach.
expansion of Certified Professional Program for OCP compliant projects — we’ve started on CPPs for building permits, to be able to expedite development. This could be expanded, which would expedite and streamline the approvals process.
setting and meeting clear approval timelines to provide transparency to applicants.
Reduction in DCCs for R5-R9 — these zones are the highest density. Much of these zones had already been categorized for high density in the City’s former OCP, so land lift was minimal if at all. Additionally, in many of these areas, we require the necessary infrastructure upgrades (DCCs) through the rezoning — such as, improvements to intersections, AAA bike lanes and town-centre width sidewalks, etc. It doesn’t seem to make sense to me to require people who live in these units (because the costs will be passed down from developers to renters and new homeowners) to be paying twice for these infrastructure upgrades.
Exploring implementing inclusionary zoning with payment collected in lieu on R1-R4, considering land lift is highest and infrastructure burden is also highest here, that this is the majority of land in Burnaby, and because R1-R4 will likely be the cheapest form of housing to build (no or limited land assemblies, lowest cost of construction, lowest soft costs, no rezonings, quickest applications to process).
What’s next?
I don’t think that the numbers will be able to work to achieve 10% Burnaby affordable and 5% CMHC median, unfortunately, though I hope to be proven wrong. I do think that my original amendment, which was 5% Burnaby affordable and 10% CMHC median, will. Staff will be reporting back in a month or so.
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