“The city picks where they want to throw highrises, and you just get … a lottery ticket… your profits basically double”: Perverse results of rezoning for higher density

 

Metrotower III Metro Vancouver HQA quote by an industry expert, buried in a Business in Vancouver article today, reveals the perverse effect of upzoning to increase density.

“The city picks where they want to throw highrises, and you just get, you know, a lottery ticket,” Harding told BIV in a phone interview. “Your profits basically double. When you can put a big tower on a little piece of land, it’s obvious that the land values are going to skyrocket. And when you take away all that [rental] supply, obviously people are going to get upset.”
Real estate broker Brandon Harding, quoted in BIV 16-Aug-2016.

Quoted from “Duelling Supreme Court lawsuits over major Burnaby property deal expose Metrotown land-use bonanza: Businessman, realty firm in court fight after properties sell for almost triple assessed value” (Darryl Greer, Business in Vancouver, 16-Aug-2016). Click for article.

Rezoning actually creates windfall profits for property owners. Municipalities claim that they claw back a major part of that windfall through levies, but CityHallWatch knows that the math is opaque and often highly suspect.

Proponents of higher density  justify the density as the best path to housing affordability.

We have often said that the power to rezone land is a license to print money (see “Rezoning defined“), but who when benefits our mayors and councillors print that money, and who suffers?

The vast majority of elected officials (mayors and councillors) come to their posts with nearly or absolutely zero formal knowledge of urban planning and economics. That is the case in Vancouver, and many other municipalities in Metro Vancouver.

Is it possible that naive politicians listen too much to the development industry. A very industry whose principal players provide millions of dollars for civic and provincial election campaigns? Is this relationship between most of our politicians and their funders an example of “regulatory capture”?

Beach Towers DP application 9-Jul-2014

Beach Towers in the West End of Vancouver received a generous boost in density through rezoning (though current status of the project is not publicly known).

Back to the BIV article, an excerpt: For broker Brandon Harding with NAI Commercial, the size of the deal at the heart of the lawsuits was surprising, but not unpredictable. Harding wrote in May of last year that Metrotown was experiencing a “calm before the storm” due to the City of Burnaby’s aggressive land-use plan to raise density around the [Metrotown] mall. Having been involved in many deals in the area, including the properties that were the subject of so-called “demoviction” protests, he said that prices in the area are indeed rising due to future development potential.

The same phenomenon is happening in many neighbourhoods of Vancouver — West End, Grandview Woodland, Mount Pleasant, Marpole, Norquay, and more.

3 thoughts on ““The city picks where they want to throw highrises, and you just get … a lottery ticket… your profits basically double”: Perverse results of rezoning for higher density

  1. Not only does the power to rezone land as demanded by developers and other City Hall insiders give them greater profits the City of Vancouver and Vancouver Park Board are selling off road closures thru relatively quite small donations made towards a plaza, park, bike-way etc, sometimes a combination of.

    By creating exclusionary zones such as Point Grey Rd or 4 dead end streets/cul-de-sacs by closing off Yukon between West 17th and 18th ( and others ) to vehicle traffic the private profits reaped far exceed any public benefits attained. These public road closures for alternate uses still need money from the COV/VPB to finish the job which the COV/VPB always magically finds in some fund the Public has no control over. Local Traffic Only Zones are just the tip of preferential status.
    In some cases neither the Vancouver Police Dept, the Vancouver Fire and Rescue Services Dept or BC Ambulance have been consulted on the impacts these road closures may have on their response times or access.

    Most areas of the COV that want to reduce non-local vehicle traffic and speeds at best can hope for a traffic circle which in practice do nothing to reduce traffic volumes or improve pedestrian/cyclist safety.
    Traffic circles reduce the amount of road-space available for safe passing and bring all closer together for conflict creating a game of chicken.
    What little dirt that is contained within the concrete ring is considered to be nbhd greenspace but then again the COV/VPB consider the planted dividers along Knight/Clark Street to also be nbhd greenspace as are parking spot robbing curb bulges.

    Off course the math on levies is opaque and suspect, discussions are private and no records are kept and once the fix is in Vision votes as a block no matter who is being screwed.
    In our Inner-City Nbhd secretly negotiated minimum DCL’s/CAC’s, if any, turn out to be maximums even if they ignore existing nbhd plans and nbhd priorities. Sometimes the options presented for nbhd consultation range from bad to worse to unacceptable yet the Citizenry are expected to chose from directions they had no part in.
    Both Vancouver City Council and the Park Board have the power to reject the privately negotiated “public benefits” if they deem them to be insufficient.

    It’s high time that the Citizens of Vancouver have true Neighbourhood representation during any discussions on negotiated benefits from any development/rezoning during the planning stage when it reaches that point. Meetings could be held in camera and once any rezoning/development is approved the record of those negotiated Public benefits should be released.

    If Vancouver City Council, the Vancouver Park Board and COV/VPB staff are truly advocating for all Citizens of Vancouver what is there to hide.

  2. Not “principle players” – It’s “principal players”

    On Tue, Aug 16, 2016 at 2:25 PM, CityHallWatch: Tools to engage

Leave a comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s