Last week was a particularly eventful one for Vancouver City Council, specifically as it relates to its efforts towards helping housing development projects advance to construction.
On Monday, June 16, Mayor Ken Sim and several members of Council attended the grand opening ceremony for 19 On The Greenway, twin six-storey rental buildings at 3619 Arbutus Street — along the Arbutus Greenway — that were recently completed by Vancouver-based real estate developer PCI Developments.
“City Council is focused on building more homes, faster, and 19 on the Greenway is a clear example of that progress,” said Mayor Ken Sim. “This project delivers 118 new secured rental homes on the west side, including 24 below-market units, all within walking distance of transit, parks, and everyday amenities. It’s the kind of housing we need more of across Vancouver: purpose-built, well-located, and designed to serve the needs of the community.”
On Tuesday, Council approved a suite of changes to its policies around development cost levies (DCLs) and community amenity contributions (CACs), changing the timing of when payments are collected in order to reduce the upfront financial burden for developers.
“Current market conditions are putting pressure on the financial feasibility of many housing projects — particularly rental and strata developments aimed at middle-income households,” said the City in a press release. “Construction cost escalation has far outpaced consumer inflation since the pandemic, and additional factors such as impending tariff implications and elevated interest rates continue to challenge new housing projects. Without action, supply will continue to lag behind demand, exacerbating affordability pressures as the cost of new homes may climb even further out of reach.”
On Wednesday, Council considered a motion introduced by Councillor Rebecca Bligh entitled “Jumpstarting Rental Housing: Bold Action to Boost Rental Housing Construction in Tough Economic Times”. Bligh’s motion called for the City to explore options for “a program of tax abatement for projects that prioritize rental and below market rental units while deferring increases in property taxes for properties redeveloped for rental housing, holding the tax rate based on the assessed value prior to redevelopment, for a determined period.”
Although the events that occurred earlier in the week — and past instances of Council helping developers — may have led some to believe that Council would support this motion, the motion was defeated in a 7-4 vote, with all members of Mayor Sim’s ABC Vancouver party voting against it and the four non-ABC councillors supporting it. (Bligh was elected as a member of ABC Vancouver, but was “ejected” from the party earlier this year after a series of disagreements with ABC.)
During the meeting, Bligh said she was introducing the motion for the same reasons the City and GM of Planning Josh White recommended the changes regarding DCLs and CACs, adding that she believes those changes are “noble” but perhaps “not enough to really be moving the needle.”
“What we’re facing right now is a situation where housing starts are significantly down, month over month, compared to last year and the year before’s numbers,” said Bligh. “So while we are approving new units of housing in our public hearing process and we seem to be posting a lot about that and talking a lot about that, that’s not actually reflective of what’s being built. And the concern that we heard from the GM of Planning yesterday, Josh White, is a price-jump in the coming years if we do not continue to ensure that rezonings and approvals actually result in breaking ground and rental housing units being built.”
Bligh, who is also the President of Federation of Canadian Municipalities, noted that tax abatement programs for rental projects exist in Kelowna and Kamloops — Toronto has one as well — and went on to acknowledge that it is complicated, but that she believes it is worthwhile for the City to at least explore potential options, which is what her motion asked for.
Following Bligh was a member of the public who signed up to comment on the issue, who happened to be Evan Allegretto, President at Intracorp Homes,. After after identifying that he was with Intracorp, Allegretto said that developers need “big movement” for their proformas to work, that there are a limited amount of tools that could make a real impact, and that even a short-term tax abatement program would make a difference.
“The one speaker we just heard from said that something needs to change,” said Councillor Sarah Kirby-Yung, who spoke next and opened the discussion period. “I agree, but I will say this is not it. If we start on what I think is a very troublesome direction to give tax breaks to developers, property tax breaks, somebody else has to pay for them. That is typically how it works. That means your residents and your small businesses have to pay more, or we collect less tax, which means we can deliver less service. That’s not rocket science.”
“Permitting improvements are things that we can support,” she added. “Things like the CAC deferrals that we did yesterday make sense. We should be looking at all those things that we can do, but without putting harm onto other folks, and that is exactly what I think this motion would do. […] I think there are a lot of other solutions that we can look at and I’m open to many of them.”
Green Party Councillor Pete Fry then said he wasn’t crazy about the idea of giving developers a tax break, but believed it was at least worth examining the options and what it could look like. Councillors Lisa Dominato and Peter Meiszner, both of ABC Vancouver, pointed out that tax abatement programs in other jurisdictions are primarily for deeply-affordable units. Councillor Lenny Zhou added that he didn’t want to support the motion because it would take staffing resources away from other work.
“We need to take a balanced approach,” said Mayor Sim, after listing off various statistics about what the City has done on housing and saying that the economy may be heading towards a recession. “There are families across this great city of ours that are struggling to feed their families. We have to think about them as well and this motion would actually give a break to the homebuilders after we’ve helped them quite a bit. We’ll continue to help them, but it won’t come at the expense of families struggling to feed their families”
“What’s important to recognize is that ‘fail to plan, plan to fail,'” said Bligh after the discussion circled back to her. “We’re just gonna wait until the data shows us that housing starts were severely impacted by 2025 in two to three years. By [with] those units not coming online, rents will go up. That’s just the state of it. I appreciate councillors doing research on this. Not one spoke to me directly and I have been working on this for about two-and-a-half months and have done extensive research. I also think it’s interesting that they’re referencing US cities. How about cities in BC that leveraged this program to get more rental housing?”
“This is actually a sustainable way that the City can fund affordable housing, by ensuring that the private market is not being asked to do more than what is tenable, which includes delivering below-market housing, delivering sustainable building construction, and doing that all in an inflationary period,” Bligh concluded, before her motion was defeated. “Interest rates are up. Construction costs are up. […] Calling it a tax holiday to the private-market builders that take all of the risk to help us deliver housing in this city is just actually disrespectful and disingenuous. We get lobbied for a lot of ideas here. This is a not a tax holiday. This is a stimulus program. When we talk about a recession, and I’m sure the Mayor knows this cause he is an accounting guy, the best thing you can do is create stimulus projects and that’s what this program would do. It keeps people working, it keeps the economy moving, it keeps populations growing, and that’s what you have to do when you’re finding yourself at the risk of going into recession.”