Experts say B.C.’s upzoning results are highly uncertain

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One of the biggest questions going into 2024 is how the B.C. government’s new legislation to significantly boost density will play out, and it’s a question on a lot of minds.

Metro Vancouver presented a staff report to its regional planning committee this month that cited several concerns about the province’s new legislation, which will “result in significant and historic changes to the planning framework for British Columbia.”

Municipalities are now required to allow multiunit homes on single-family lots. The province has also set new height and density minimums around transit hubs. The report was authored by deputy chief administrative officer for policy and planning Heather McNeil and deputy general manager for regional planning and housing development Jonathan Coté. It includes concerns about sidelining carefully crafted local area plans for measured growth in areas that do not yet have transit or the infrastructure to accommodate significant density.

The “blanket approach,” the report says, “could result in a greater density of housing in parts of the region that are more car dependent.”

In other words, the result could be more sprawl. The report also cites the challenge of needing to fast-track upgrades to schools, emergency services, and transportation.

Development industry members are also concerned about the blanket requirement for minimum tower heights of up to 20 storeys around rapid transit stations and 12 storeys around bus exchanges, many of which are surrounded by detached houses. It’s not just a question of height, but floor space ratio, which is the entire floor area allowed in relation to the size of the lot. A Vancouver detached house with basement suite and laneway house typically had an FSR of 0.86, which meant the total floor space could be 86 per cent of the lot size. The new multiplex zoning allows an FSR of 1.0, or a building as big as the lot size. With the new transit-oriented development legislation, a building within 200 metres of a bus loop, for example, can be 12 storeys high with a floor space ratio of 4, or four times the size of the lot. In other words, the buildings are going to be a lot bigger, which could have implications for setbacks and green space. It remains to be seen.

Developer Hani Lammam, executive vice-president of the Cressey Development Group, says he’s seen his own house, a 1905 heritage home near the King Edward SkyTrain station, greatly upzoned. He wonders how that will play out in terms of heritage house protections and the need for new infrastructure and associated costs. As well, the new legislation removes minimum parking requirements. He applauds any policies that add density, but he said it also seems like “all gloves are off,” in terms of pushing density into areas not equipped for it.

“At my house, you have an outright 4 FSR right now. Is that what it is? Because that’s how it reads. I don’t think it’s right. If it is, then fantastic. I won the lottery. But I don’t think that’s going to be the case.

“Let’s talk about this transit-oriented development regulation,” says Mr. Lammam. “Guess what, the house that I live in is now 4 FSR and 20 storeys or something … maybe 12? Okay, that’s nonsense, because I don’t think that’s going to be allowed. I just can’t imagine. … What happens to the heritage and character, all that stuff? Do we just throw that out the window? I don’t understand. I think it’s crazy. And what comes with that? Where are the strings, because there will be strings attached, I suspect. We will have to pay for more infrastructure now, water and sewer capacity. And all this is without parking, apparently.

“There are a lot of implications on these neighbourhoods that are supposed to accommodate all this density that are not designed to accommodate this density. So, nobody knows. I think there will be a bit of a stalemate again while we see how these municipalities react to these provincial regulations.

“It’s going to take time, and it could be years in the making. It’s not like overnight we rebuild everything. But it does mean, from a long-range planning perspective, they’ve changed the goalposts,” said Mr. Lammam.

Real estate consultant and commentator Michael Geller is known for offering ideas on housing policies, some of which have been implemented by government. One of his newer ideas is the adoption of a two-tier tax system that puts detached houses in a higher bracket than attached homes, such as condos and duplexes. The idea arose when he realized he was paying the same taxes on his Coal Harbour condo as his west-side house.

Mr. Geller argues that a lower rate for multifamily homes could incentivize the redevelopment of single-family properties into multifamily multiplexes. Vancouver City Council last year also voted to upzone most single-family areas up to six units per lot.

“This idea does make sense, especially since the province wants to encourage the redevelopment of single-family lots with multiple units,” said Mr. Geller. “What better way to reinforce the idea than to increase the taxes on a lot when it is used solely for single-family dwellings – albeit with a possible basement suite and or coach house? And decrease the tax by having a lower mill rate on the same lot if used for three to six dwellings?”

He also likes the idea in principle because he sees unfairness as to how a lot of single-family homes are taxed, such as wealthy people who live on agricultural land reserves, taxed as farmland.

“I live in Southlands, and I am surrounded by people who live in $25-million houses and some of them pay less property tax than you do. That’s because they are growing $2,000 worth of vegetables on a portion of their large lots.”

The Ministry of Housing responded to inquiries by e-mail, saying that local councils set property tax rates and B.C. already has nine property classifications. As well, houses are already taxed at higher values and are paying a higher share of tax. The idea of a two-tiered residential assessment wasn’t being considered, said Housing Minister Ravi Kahlon.

“We will continue taking action to get more homes built faster for people,” he said.

Derek Holloway is a retired BC Assessment appraiser who handled a lot of appeals from property owners. He says the upzoning will have the effect of increasing land values. He cites criticism of the Auckland, New Zealand single-family house upzoning, which some academics say resulted in price increases and only modest net housing supply gains.

“As soon as you start seeing sales to developers or small contractors who buy a single-family lot on a Kitsilano lot that is 50 by 120 [feet] so they can build four units, they will tear down the old house, build … and move on to the next one. That will drive up the price of the house being sold because it’s taken from a single-family house to a development site, and it will drive values up,” says Mr. Holloway, who was with BC Assessment for 30 years.

“You don’t say, ‘Everyone who owns a home in Vancouver can build three to six units.’ You say, ‘Here’s an enclave where we are going to do that, because it’s beside commercial and transit nodes’, and that stuff. What they did in the old days was upzone to duplex, something like that. And that was a buffer zone between high density and retail and single family. So, they could do that tomorrow. … Upzone small areas, not the whole city.”