Ahead of Vancouver City Council's upcoming vote on the proposed Pace of Change (POC) Policy for the Broadway Corridor, the Urban Development Institute (UDI) sent a letter on behalf of its 900+ members to the City of Vancouver voicing its firm stance against the potential policy.

"UDI strongly believes the City should not be proceeding with any POC Policy," wrote UDI President and CEO Anne McMullin in the letter, a copy of which was obtained by STOREYS.

The letter is dated March 20, 2023 and is addressed to Theresa O'Donnell, Director of Planning and General Manger of Planning, Urban Design and Sustainability, and includes a series of policy recommendations for managing rental-related development.

The City of Vancouver conducted private consultation with various organizations earlier this month to seek feedback on the proposed policy, which would set a limit on the amount of rental-related rezoning applications the City will process each year. The proposal would set a limit of either five, 15, or 30 projects a year, with City staff recommending the lowest option.

Groups that were consulted include representatives from the rental service sector, LandlordBC, and the Urban Development Institute. UDI's membership population is comprised of a wide range of people in the real estate development industry, including but not limited to developers, architects, financial institutions, engineers, educational institutions, municipalities, and non-profits.

The intent behind the Pace of Change Policy is to avoid a scenario where too many tenants and rental units are simultaneously impacted by redevelopment, with the policy only applying to certain areas identified under the Broadway Area Plan (BAP). Generally, those who are in favour of the policy believe the cap on redevelopment would limit renter displacement, while those against the policy argue that the existing tenant protection measures outlined in the Broadway Plan already address that concern and that the City does not need to double-down with a policy that could have additional unintended effects.

READ: Broadway 'Pace of Change Policy' Draft Details How Rezoning Would Work

The UDI fell into the latter camp, with McMullin writing to the City that "our members are very concerned about the City layering in an additional mechanism to further slow the development of rental projects along the Broadway corridor."

"Unlike the City of Burnaby, Vancouver did not increase densities in the RM-3 and RM-4 apartment areas to offset the full costs of the tenant protections and inclusionary zoning policies," McMullin points out. "The former Council further increased measures to slow redevelopment through amendments that included additional tenant supports, on top of the existing City-wide tenant protections. These enhanced tenant protections are another reason a POC Policy is unnecessary. Renters are fully protected during and after the redevelopment process under the BAP."

The UDI's concerns about the POC Policy don't stop at the annual project limit, but also involve how the City would select the projects, which would be given priority "based on the ratio of new permanently-secured below-market rental housing units provided, compared to the number of existing rental units on site that are impacted by the development," according to a draft of the policy. The UDI believes that this could create an environment that is counter-productive for both the development industry and the City.

"The current proposal suggests prioritizing applications with the highest ratios of new below-market rental units to existing rental units," the letter reads. "This would create a competitive environment amongst applicants to promise more below-market units to qualify for the annual limit, and protect their right to redevelop in the future. Builders will be encouraged to make their projects less viable, so City staff resources could be wasted on projects that will not likely proceed to Building Permit."

In a December 2022 memo addressed to the Mayor and Council, O'Donnell noted a surge in rezoning enquiries and applications following the adoption of the Broadway Plan. Between 2016 and 2021, the City received an average of 78 rezoning enquiries a year, O'Donnell said, but had received 91 for the Broadway Corridor alone between September 1, 2022 and December 7, 2022.

Recognizing the surge, the UDI argues that it is the result of the two-towers per block restriction in the Broadway Plan document, which the City says was included "to allow adequate sunlight to adjacent homes, gardens, and outdoor spaces."

"The fifty applications in the RM-3 and RM-4 apartment areas are the product of the City having created an artificial scarcity of redevelopment opportunities throughout the Plan area; in particular, through the existing one and two tower limit per block restriction," McMullin said.

In other words, because of the limit of two towers per block, the quantity of redevelopable land options has been greatly reduced, and that scarcity brings forth increased competition from developers in the form of rezoning enquiries.

"Although City staff noted that there are limited scenarios where projects are in competition with one another for tower rights, the first-come-first-serve approach has created an environment of uncertainty amongst builders and land owners," McMullin continues. "Any building owner who is considering redevelopment at any time in the future would want to respond to this uncertainty by submitting an enquiry or application, to ensure the full potential of a site is not lost."

Addressing that issue, the UDI is recommending that the City remove the two-tower-per-block restriction -- while keeping the 80-ft tower separation requirement -- in order to eliminate the perceived scarcity, which would reduce the amount of enquiries to those that are serious and truly viable.

To further contribute to that goal, the UDI is also recommending that the City create a "fast track" for applications that will allow them to be processed in a shorter timeframe. Applications in the fast track would be subject to a higher processing fee, which would later be returned as a rebate to builders who advance projects within a certain timeframe.

"A mechanism is needed to enable City staff to distinguish between [applications] that have been submitted in response to a perceived scarcity, and those that are financially viable to proceed in the near term," McMullin wrote. "This would establish a threshold for building owners to determine whether an enquiry or application is viable enough to incur the added cost of proceeding. City staff would have fewer enquiries and applications to process. Not only does this value the time it takes for City staff to review enquiries and applications, but it will result in them being able to focus resources on viable projects that will ultimately deliver new rental housing for impacted BAP tenants sooner."

Although standing against a proposed policy that's framed as protecting renters may be perceived negatively, McMullin addresses renter concerns throughout the letter.

She argues, on behalf of the UDI's members, that the annual project limit and the two-tower restriction would create a backlog of projects that could deliver much-needed rental housing and that what the City has proposed "would only defer the issue of tenant displacement."

"For enquiries that do not qualify to proceed for rezoning application, they go back into the larger enquiry pool for the following year's selection process, which leaves many projects -- both viable and unviable -- in a state of deferred uncertainty," the letter reads. "For the tenants of the impacted sites, this also perpetuates an ongoing state of uncertainty about whether they will have to face the prospect of relocating for yet another year. Worse, the approach effectively serves to block viable projects with lower ratios of below-market rental units to existing rental, from delivering rental housing of any form."

READ: Reliance, QuadReal Propose Twin 29 and 28-Storey Rental Towers On Broadway

The third and final recommendation the UDI makes in the letter is a measure it says it has broached with the City previously: the development and use of "swing sites" on properties owned by the City or Province. These swing sites would be developed as interim rental housing for tenants impacted by redevelopment, and could be transitioned into below-market housing down the line.

"The City might also consider exploring partnerships with builders who own sites in the BAP, and senior governments," the letter reads. "In addition, some of the new below-market housing units being provided by builders could be temporarily utilized for three to five years as swing units."

In a statement to STOREYS, responding to the UDI's letter and its recommendations, the City of Vancouver reiterated that the POC Policy was recommended due to the aforementioned surge in redevelopment interest and with renters in mind.

"By design, the proposed POC does not apply to redevelopment in other areas of the plan (e.g. Centres) which have significantly fewer renters," the City said. "Currently, there are ~6,000 net new rental units being proposed outside the apartment areas, which can be approved/built over the next few years, helping to ease the tight rental market and accommodate relocation needs of existing tenants. The City understands that tenant relocation as part of the Broadway Plan will be challenging and are open to working with the development industry and other partners on ideas to address these challenges."

The City is scheduled to vote on the Broadway POC Policy in a Standing Committee on Policy and Strategic Priorities meeting on Wednesday, March 29.