Building Bankruptcies: How Slow Projects Kill Neighbourhood Shopping (City Conversations No One Else is Having #2, Brian Palmquist)

Brian is a guest writer for CityHallWatch. An architect whose career in Vancouver has spanned four decades, with projects ranging from first proposing the laneway-housing concept to serving as the managing architect on major multi-building development plans, personally designing more than 1,000 social and co-op housing units, and consulting on thousands more. Please visit this page for a list of all his articles, including this 2021 series “City Conversations No One Else is Having.”

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City Conversations No One Else is Having #2: Building Bankruptcies: How Slow Projects Kill Neighbourhood Shopping

By Brian Palmquist (originally published 26-Jun-2021)

“But it was here last time I was here!” exclaimed my daughter, who was visiting from up north now that Adrian, Bonnie and John had given us limited travelling permission. We were standing in front of the former Jethro’s Fine Grub, a former neighbourhood favourite of ours.

“But it was on Diners, Drive-Ins and Dives,” she continued, assuming a TV appearance conferred immortality.

Jethro’s Fine Grub no More

“It’s actually been closed quite a while,” I replied, “along with most of the rest of the block. There’s just the pot shop, the Japanese restaurant and the temple remaining. We take out from the restaurant—the other two aren’t selling what we’re buying.” COVID-19 was hurting.

“So it’s a COVID thing,” she asked, “that’s shuttering the businesses?”

“Not really”, I replied. “The glacial pace of development and property tax unfairness in the city is killing way more businesses than COVID.” Her brows knitted, so I continued. “Let’s talk about taxes first.”

“This block started emptying about 3 years ago as leases came up for renewal. That’s about when the city started taxing commercial businesses like these shops according to what they call the “highest and best use” for a property. On this block, that means the taxes are calculated as if there are already three storeys of residential development above. And what are called “triple net leases” means the resulting very high taxes are paid entirely by the folks running the shops rather than the landowners.”

“Well, that’s unfair!” she responded with all the bluster available to a twenty-something. “Why can’t that be changed?”

“In fact,” I replied, “it can be changed. The city and the province just need to put their heads together and modify some legislation. But nobody wants to because they’ve become addicted to the higher tax revenues….to pay for the city services for these shops that are no longer here.” She gave my attempt at irony a dirty look.

I continued my explanation. “On this block, over the following year, everybody left except the Japanese restaurant. Then the pot shop came in at one end, the temple at the other. Neither is much of a traffic generator for the neighbourhood or its few remaining stores.”

“So what’s going on, beside the taxes thing?” she asked. “I know the population of our neighbourhood may have dropped a little, but most of those shops lived off traffic from a distance, like the vacuum store and the pizza joint.”

“Well, I was curious myself, so did a bit of digging a while back.” We had moved on from the empty storefront, but I still had her attention, not to be sneezed at when conversing with a Millennial.

“I don’t remember when the block was bought up by a developer,” I continued, “but they applied for a development permit more than 3 years ago, got it a bit more than 2 years ago.”

“What’s a development permit, how does that relate to rebuilding and why does it take so long?” She was a bit exasperated.

“For most projects in Vancouver, you need a Development Permit, DP for short, before you can even apply for a Building Permit, BP for short. For small projects like the proposed new house next door to ours, the DP and BP are usually combined into one process, but it’s still slow.” The DP/BP process next door had started five months previously and the permits had still not been granted. I knew from previous exposure to smaller projects that it was still early days for them.

I continued. “The DP process gets you permission to build a specific design that meets the area’s zoning requirements; the follow-on BP process is where the city confirms the design details “meet code.” Stuff like fire separations, floor, wall and roof construction.”

“But for a building of this size (she had seen the rendering on the sales banner), wouldn’t the developer hire architects and engineers? And why wouldn’t they do all those checks?” I smiled, happy she had ingested all my years of explanation and complaint. “Surely that would make the processes work faster?”

I picked up her thoughts. “Yes, were the city to trust professionals to do what they are trained to do, which is design and build buildings, things could go much quicker. When it takes 3 years and counting to get a straightforward building that meets zoning and building requirements from application to still-not-started-construction, the neighbourhood suffers. Professional architects and engineers have developed, and the city has approved programs to accelerate the development and especially the building permit processes, but these have had only limited effectiveness.”

“How come?” she interjected.

“Well, the first effort was developed prior to EXPO ’86. The then-Chief Building Inspector, Roger Hébert, told city politicians he did not have the staff to manage the expected volume of EXPO-related permit applications. Out of that came what is called the Certified Professional (CP) program, addressing the building permit process—the CP Program persists to this day—in fact, I am one of the earliest registered CPs.”

“And how has that worked?” she asked.

“It’s been a 35-year struggle. After Hébert retired, the city regularly placed impediments in front of CP activities—the process is still faster than without a CP, but not by nearly as fast as it could be.”

“So,” she continued, “have professionals made any other inroads with city processes?”

“No,” I answered, “not that we haven’t tried. I was on a committee convened by city council around the year 2000, composed of community, industry and city management reps.  We were tasked to examine how to improve the city’s design and construction processes.”

“And how did that go?” she asked—her manner suggested she had guessed the answer.

“Not well,” I continued. “About a dozen of us met in person every second week for the entire morning—that’s a lot of volunteer hours! But every time, and I mean every time we worked through a recommendation on how to improve things, the city reps would come back 2-4 weeks later and say city staff would not agree to it.”

“Why not?” she persisted.

“The most common reason given was that our proposal would cut into established staff time allocations for permit processing.”

“Wait a minute,” she interjected, “are you seriously saying that the recommendations of a committee charged with reducing the time required for permits were rejected because they would, in fact, achieve that goal?”

“Got it in one,” I replied with a hint of irony. “I resigned from the committee after eighteen months and zero approved recommendations. Others followed my lead and the whole thing quietly dissolved about six months later.”

I continued, “There have been similar periodic efforts over the years—I’m aware of one more pilot program recently designed to improve permitting times for laneway houses.” I paused for effect. “Everything around code checking, etc., that the laneway design and construction industry took on, well, city staff ended up setting aside and redoing—so the work was all duplicated and no time savings were realized.”

How Could a Laneway House be that Difficult?

We had walked several blocks and were now facing another as yet not started development that consumed an entire block—but in this case the abandoned shops had been bulldozed, replaced with planter boxes, frost fencing and signs announcing this as a community garden.

“That seems a pleasanter interim use than derelict shops,” she pointed out.

“Except that by creating a temporary community garden, the developer eliminates most of their property taxes while they await issuance of their permits and completion of pre-sales and financing. In this case it’s been three years so far.”

“So, let me get this right.” She paused with a look midway between incredulous and angry. “While the shops were there, they paid property taxes as if they had already been redeveloped, in other words for the three or more storeys of future residential above. Then as soon as they left and were demolished, the developer got most of those taxes eliminated until they were good and ready to start their new development. How in any universe is that fair?”

Gone Already

“I think you know what I think,” I concluded. “But if you think things are stacked against neighbourhood shops and services, wait ‘til I tell you about how mega projects are killing entire neighbourhoods, not just a block of shops. For that chat we’ll need to go for a walk in other neighbourhoods.”

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Brian Palmquist is a Vancouver-based architect, building envelope and building code consultant and LEED Accredited Professional (the first green building system). He is semi-retired, so not beholden to any client or city hall. These conversations mix real discussion with research and observations based on a 40+ year career including the planning, design and construction of almost every type and scale of project. He is the author of the Amazon best seller “An Architect’s Guide to Construction.”

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