A developer of an East Vancouver rental project is no longer interested in getting a subsidy from the city.
Instead of receiving a development cost levy (DCL) waiver, Hua Long International Technical Investment wants higher starting rents for its property at 2153-2199 Kingsway.
A city staff report to council explains: “The applicant has indicated that the restricted valuation on the project has reduced the amount of financing available and thus does not make the project feasible if the units are to meet the definition of ‘for-profit affordable rental housing’ set out in the DCL By-law.”
The report does not contain information on what kind of market rents will make the project viable.
By way of background, city council in 2017 approved the rezoning application for the project under the Rental 100 program.
One of the conditions included a DCL waiver or exemption for the residential component of the six-storey project.
The waiver was sought by the developer in exchange for setting starting rents at or below amounts set by the city to meet its definition of ‘for-profit affordable rental housing’
As of the day of the public hearing for rezoning on May 16, 2017 and guided by the city’s DCL bylaw as of 2016, the starting monthly rents set for the Kingsway project were the following: $1,256 for a studio; $1,674, one bedroom; $2,079, two bedrooms; and $2,603, three bedrooms.
These rates were to start on the day of the public hearing, and the developer was allowed to increase rents yearly based on rates allowed by the province.
Also, the project’s starting rents were higher than average market rates in newer buildings in East Vancouver as of 2016. These other rates were $1,226, studio; $1,592, one bedroom; and $1,980, two bedrooms.
“The applicant has chosen not to seek the optional DCL waiver incentive for 2153-2199 Kingsway and as such, has requested that the rezoning enactment condition for the Housing Agreement be amended to remove the conditions related to the DCL waiver,” according to the staff report to council.
This means that the developer will be paying a DCL of $1.8 million, based on rates as of September 30, 2018.
“Should this change be approved, the conditions that would allow for a DCL waiver, being the maximum unit sizes, requirement for provision of rent rolls and maximum average rental rates, will not be included in the Housing Agreement for this project,” according to the staff report.
The report indicated city staff support for the developer’s request to remove the DCL waiver.
“As the DCL waiver is an incentive taken at the applicant’s discretion, staff have concluded that this rezoning application remains consistent with the Secured Market Rental Housing Policy,” according to the report.
The matter is included in council agenda Tuesday (May 28).