by Robert Renger
The City of Vancouver and its nearly 4,000 tenants in False Creek South (FCS), who reside on leased municipal land, have been formally discussing the future of their leases since 2012. In 2017-2018, the city pursued a neighbourhood planning process for the area in which hundreds of people from the neighbourhood and beyond participated. That planning process, which culminated with city council’s unanimous approval of a vision and guiding planning principles for the area, was then paused, specifically, to resolve leases.
Little progress was made between 2018 and February 2021 when the city suddenly initiated a public engagement and real estate planning process—one that came at the 13th hour, and which doesn’t appear to align with other related city initiatives that are ongoing.
Many of the city’s tenants in FCS fear that the intent of this unexpected new “city as landowner” public engagement process was:
- To further delay city council’s consideration of lease extensions.
- To ensure that city council’s consideration of the future of FCS (including staff recommendations) takes place In-camera, behind closed doors.
At the public meetings in February, the deputy city manager said that the city has the task of wearing two hats when it comes to FCS: landowner and regulator. She explained that the public engagement process was the city acting as landowner (on behalf of its residents), and would result in the city-landowner coming up with a long-range plan for the future of FCS. Presumably this is supposed to be analogous to a corporate developer-landowner coming up with a plan to extract the maximum return from its land for the benefit of its shareholders.
There are basic problems to this approach.
Firstly, the city-landowner didn't do its homework and provide relevant information to its residents as part of this public engagement. The process should have started with an analysis of what the return to the city’s residents is, and can be, from the current development. For example:
- a thriving mixed-tenure internationally-recognized model community which was the catalyst for all the subsequent development around False Creek;
- a mix of deeply-affordable and relatively-affordable housing in an integrated community;
- land rent payments from lease renewals (that could support new affordable housing);
- opportunities for development of vacant lands and lands in FCS occupied by surface parking, parking structures, and the bus loop;
- the seawall and parks which provide amenities for the entire city.
The city-landowner should also have analyzed the risks and costs of a “demolish and redevelop the existing community" approach, including:
- environmental remediation;
- infrastructure improvements;
- strata buyouts;
- nonprofit resident relocation;
- existing building demolition and waste disposal;
- negative climate change impacts;
- a temporary reduction in property tax revenue;
- unknown future economic and property market conditions (in the past these wiped out the payment to the city for the land that it sold for the neighbouring Olympic Village development);
- a need to replace existing co-op and special needs housing;
- replacement of relatively affordable market rental and strata housing with much less affordable new market development (as typically happens throughout the city).
At the public meetings, city staff told participants it hadn’t looked at these costs, or what redevelopment density would be required to support a “demolish and redevelop” approach. The FCS community group RePlan has, however, done such analysis and determined that the most financially responsible (and also most socially and environmentally responsible) approach is to maintain the existing community and to double its existing density by developing the vacant lands within it. After this, incremental infill development and redevelopment of existing housing that prioritizes community-building by fostering inclusion and interconnectedness in its design could be pursued as housing ages enough to become nonviable.
City as a private landowner and public regulator
Secondly, it does not seem realistic for city staff and city council, wearing its landowner’s hat, to prepare and adopt a developer’s plan for the future of FCS behind closed doors, and then to turn around and put on its regulatory hat in public.
Let’s consider this: when wearing its regulatory hat, is city staff and city council really expected to review and assess the city-landowner/developer’s plan, to invite public input, to negotiate with the developer (itself), and adopt a community plan and eventually rezoning for the FCS area?
This is what the city does with third-party developers. In fact, the city as regulator often does more for private third-party lands. Its regulatory hat encompasses a planning and visionary role, where the city (with public participation) comes up with community plans for neighbourhoods, and then expects landowners and developers to proceed to implement these. Neighbourhood planning like this, is what the city’s planning department (with participation from the public and other city departments, including real estate) pursued for FCS in 2017-2018.
Thirdly, the demographic information that city staff provided for the public during this engagement was problematic. It almost looks like the data was selected and presented with the intent of generating public antagonism towards the city's tenants and support for eviction, demolition and redevelopment.
The city did not point out that the demographics provided were for an area that includes 1,356 premium freehold condos on private land in addition to the 1,800 mixed-tenure units on the city lands that were the subject of the public consultation. Nor did the demographic information point out that these 1,800 units also include unsubsidized market housing, in the form of 669 leasehold strata units and 150 market rental units. As a result, a lot of public commentary jumped to the conclusion that the demographics provided represented people living in subsidized housing on the city's lands.
City profits from leasehold stratas
The leasehold stratas in FCS are not subsidized by the city. They are far more profitable to the city than if the land had been sold outright when it was first developed, and far more profitable than the Olympic Village freehold development where the city ended up getting nothing for its land. They have also been far more profitable and built a better, more-inclusive community than the province's sales of the Expo lands on the north shore of False Creek and the Little Mountain site.
To clarify another misconception—the city’s strata leaseholders pay property taxes based on their hypothetical freehold value assessments including the land, in addition to land rent at market rates. They have suggested that the city extend the expiring 60-year leases by 39 years to match most other leases on city land which are 99 years in length. Community leaders have estimated that this could quickly generate about $120 million in rent prepayments for the 669 strata units.
A 39-year lease renewal is a fiscally responsible way to build more truly affordable housing in FCS. The city can invest the money generated in new nonmarket, and supportive and social housing, including for people who have experienced homelessness, while also restoring eroding affordability and access to financing for existing housing and ensuring a mixed-tenure community.