High costs raise questions on growth

City’s high housing growth rate making homes less affordable

By Elizabeth Murphy, Vancouver Sun, Saturday, Sept.1, 2018

Marine Drive and Cambie Street is part of the Cambie corridor plan that requires $750 million in utility upgrades as part of the billions of dollars of upgrades required for city-wide growth. Elizabeth Murphy


After more than a decade of high levels of growth in the city of Vancouver, we can now see what that is achieving. The results are record homelessness, an affordability crisis, inflated land values and unsustainable demolitions. But on top of that we are only now being given a peak under the hood at what the costs of servicing that growth will be. And it is enormous.

In July, the city approved a report on city-wide utilities financing growth strategy and a Cambie corridor utilities servicing plan. It disclosed, in somewhat of an opaque and incomplete way, anticipated growth and the costs to service that growth that is in the billions of dollars. It also posed some significant environmental sustainability issues that had not previously been raised by the city and puts in question the current growth agenda.

The report does not disclose full population and unit growth, so it doesn’t show the whole picture. But it is enough to identify that we have a huge deficit in utility servicing capacity for the projected growth, where unit development and zoned capacity is far exceeding population increases. It will take billions of dollars to cover the required upgrades to water, sewer and drainage systems, as well as other services for this growth, most of which is unaffordable housing.

Staff said that just for the Cambie corridor planned growth alone it would cost $750 million in utility upgrades. Only a portion of this is included in the billion-dollar estimate to cover city-wide growth from 2017 to 2026. The costs are proposed to be split in half between development fees and property taxes. But with fee exemptions for new rental projects, the majority of costs will need to be covered by property taxes.

Where more transparency is particularly required is on the actual growth numbers, which do not line up with the rhetoric from those who claim that the city lacks supply. We are in fact building more units than population growth would justify, with zoned capacity that is already many times greater than needed for expected growth and way beyond current utility servicing capacity

The issue of lack of utility capacity to meet anticipated growth is staggering. This has huge implications for environmental sustainability, increased property taxes, city debt and affordability, at which we are only getting a small peak.

Every smaller building that is replaced by a bigger building with more units adds waste and resource consumption. The building generally has a bigger site coverage with less impervious areas that generates more water runoff. Deeper basements and underground parking garages have groundwater intrusion issues, putting more pressure on combined sewer drainage systems. More extreme weather from climate change further stresses risks of flooding and reduced water capacity for firefighting, drinking water and domestic uses.

A project manager, who builds large multi-use projects in multiple countries, confirmed he has seen this all before. Many cities worldwide build way beyond the carrying capacity of the infrastructure systems that then have to be upgraded later at great public expense. These costs are carried by taxpayers, renters and future development fees.

To assess this properly, first we need a clearer picture of what anticipated growth looks like. The city has lately been building significantly more units than what would be justified by population growth and has existing zoned capacity well beyond what is the city’s portion of regional growth. This also has regional impact on major infrastructure such as sewage and drinking water treatment plants, electrical grid, roads, bridges, transit systems, daycare, parks and recreation.

Metro Vancouver, formerly the Greater Vancouver Regional District, adopted the Liveable Region Strategic Plan (LRSP) in 1996. But the focus has since shifted from liveability to growth objectives when the LRSP was replaced by the Regional Growth Strategy (RGS) in 2011.

Here are the growth numbers that are not included in the city report.

The recent update to the RGS in 2017 has the City of Vancouver growth from 2011 to 2041 to be an additional 148,000 people and 97,000 units.

However, census data shows that 28,600 people and 22,700 units had been added from 2011 to 2016. The city’s projections for the 10-year period of 2017 to 2026 is for an additional 70,000 people and 52,200 units. When you add the 22,700 units already built from 2011 to 2016, this comes to 74,900 units by 2026. That leaves 22,100 units for the following 15 years from 2026 to 2041.

Of the units added by 2016, the census shows there were 25,500 unoccupied units that had increased by 3,300 units from 2011. The city is continuing to build well ahead of population growth. No lack of supply there.

The city has also known since at least the city’s Coriolis consultant’s report in June 2014, that there was already enough existing zoned capacity to meet future growth beyond 2041. Yet it continued to rezone Grandview and other areas, while approving record numbers of new units in development permits.

Vancouver’s existing zoned capacity is now already many times what is needed to meet population growth and the city continues to avoid giving a full breakdown of all zoned capacity.

The July city report said it only counted most of the new residential growth as anticipated in the West End, downtown, Cambie corridor, Marpole, Mount Pleasant and Killarney (East Fraser Lands), consistent with these area plans. The growth in the Cambie corridor alone is estimated by the city to accommodate 50,000 people.

This is without allowing for anticipated development in the Grandview plan, or along the Broadway corridor, Jericho Lands and the many other areas city-wide proposed for rezoning, including all the RS detached zones to be rezoned in September without consultation.

These city-wide RS rezonings, over 68,000 lots on both the east side and west side, incentivize more demolition of the older, more affordable character buildings and replace them with much more expensive, new construction units.

Instead, the city could provide more incentives for retention and conversion to more units in existing character houses, with disincentives for demolition. This is like what is done in the RT zones of Kitsilano, Mount Pleasant and Grandview. That would help to provide for increased population while dampening the negative impacts of growth on the environment, affordability and neighbourhood character. But this is unfortunately not what the city is doing, so demolitions will escalate and undermine the recent character home zoning review.

The impact of all this growth on utility servicing, and the billions of dollars it will take to address it, needs much more consideration. Should we be building and further rezoning far beyond what actual growth in population justifies? There are high, related costs affecting affordability with financial, environmental and social impacts.

The first job of the next city council should be to revisit all the growth plans and reconsider if this is in the public interest. With all the excess zoning capacity the city already has in the system, there is time to plan this more carefully. The problem is that most of the new construction is unaffordable and involves demolishing the older building stock that former occupants could afford but who are then displaced.

More new supply is not making things more affordable — quite the opposite. Vancouver is in an affordability crisis of its own making that requires a rethink of current growth with consideration of all the costs and impacts.

Elizabeth Murphy is a private sector project manager and was formerly a property development officer for the City of Vancouver’s housing and properties department and for B.C. Housing. info@elizabethmurphy.ca

Vancouver Sun print edition Saturday, Sept. 1, 2018 page B2

Copyright Elizabeth Murphy 2018 all rights reserved. 

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