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«March 2014 Acknowledgements This guide was drafted in consultation with numerous local governments, the development and building sectors, and the ...»

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Community Amenity

Contributions: Balancing

Community Planning, Public

Benefits and Housing Affordability

Ministry of Community, Sport and Cultural Development

March 2014

Acknowledgements

This guide was drafted in consultation with numerous local governments, the development and building

sectors, and the legal and academic communities. The Ministry would like to thank everyone who

contributed to the development of this guide.

Ministry of Community, Sport and Cultural Development Contact the Ministry of Community, Sport and Cultural Development for answers to questions about the material contained in this guide or other aspects of community amenity contributions.

Ministry of Community, Sport and Cultural Development Local Government Division Intergovernmental Relations and Planning PO Box 9841 Stn. Prov. Govt.

Victoria, B.C. V8W 9T2 Phone: 250 387-4037 Website: www.cscd.gov.bc.ca/lgd/contacts/department.htm Disclaimer The information contained in this guide is provided as general reference and, while all attempts have been made to ensure the accuracy of the material, the guide is not a substitute for provincial legislation, and it does not constitute legal advice.

Community Amenity Contributions: i Ministry of Community, Sport Balancing Community Planning, Public and Cultural Development Benefits and Housing Affordability Community Amenity Contributions: Balancing Community Planning, Public Benefits and Housing Affordability Table of Contents Guide Purpose and Summary 1 Summary of Recommended Practices for CACs 2 Part 1: Background on CACs and the Rezoning Process Definitions 3 Legislative Context 4 Part 1 - Summary 5 Part 2: Staying on a Solid Legal Footing Legal Risks 7 Imposing Unauthorized Fees, Charges and Taxes 7 Not Keeping an Open Mind 7 Subjecting Building and Subdivision Approvals to CACs 8 Part 2 - Summary 8 Part 3: Recommended Practices for CACs Official Community Plans and Zoning Bylaws 9 Planning for CACs 9 Applying the Principles of Nexus and Proportionality

–  –  –

Community Amenity Contributions: iii Ministry of Community, Sport Balancing Community Planning, Public and Cultural Development Benefits and Housing Affordability Guide Purpose and Summary The purpose of this guide is to help local governments understand the risks, challenges and recommended practices related to obtaining community amenity contributions (CACs). The guide also describes the relationship between CACs and housing affordability, and encourages practices that do not inadvertently cause housing prices to increase.

Density bonus zoning, authorized under Local Government Act (LGA) s. 904, is another approach used by local governments to obtain community amenities.

While CACs are the focus of this guide, most recommended principles and practices apply equally to CAC and density bonus approaches1. Therefore, throughout the document and where helpful to the reader, the guide highlights key differences and commonalities between the two approaches.

The guide also emphasizes the importance of density bonus zoning as a preferred approach for obtaining community amenities.2 The guide is intended primarily for local governments.3 The content of the guide may also benefit others involved in the land use planning and development process including developers, builders, real estate professionals and planning consultants.

The guide contains the following sections:

 Part 1: Background on CACs and the Rezoning Process  Part 2: Staying on a Solid Legal Footing – helps local governments to understand the limits of their legal authority to impose fees and charges and obtain CACs.

 Part 3: Recommended Practices for CACs – outlines the challenges associated with obtaining CACs and recommends practices that align with good planning principles.

 Part 4: CACs and Housing Affordability – encourages local governments to consider who ultimately pays for amenity contributions and encourages approaches that are most supportive of housing affordability.

 Part 5: Choosing an Approach to Obtaining Amenities – addresses advantages and risks associated with typical approaches currently used, and provides advice on choosing a strategy.

 Appendix: Illustration of Policies for a Target Approach to CACs – provides an example of the “target approach” to CACs including provisions that could be customized for inclusion in official community plans (OCPs) or adopted as policies to guide negotiation of CACs.

A short version of this guide is available here:

http://www.cscd.gov.bc.ca/lgd/intergov_relations/library/CAC_Guide_Short.pdf Where a site specific rezoning includes a density bonus on condition of providing amenities, it is essentially a rezoning with CACs.

Developers make contributions in various circumstances, such as housing agreements, phased development agreements, or heritage revitalization agreements. This guide only addresses contributions to the extent that they are related to zoning.

While the City of Vancouver is unique, in that it operates under the Vancouver Charter, the issues and guidance in this document are nevertheless applicable to the City.

Community Amenity Contributions: 1 Ministry of Community, Sport Balancing Community Planning, Public and Cultural Development Benefits and Housing Affordability Summary of Recommended Practices for CACs Avoid Legal Risk – Negotiate, do not impose; avoid perception that zoning is for sale.





Plan Ahead – Identify potential amenities, ideally by neighbourhood.

Seek Modest Contributions – Avoid impacts on housing affordability.

Apply Development Cost Charge (DCC) Principles – e.g. link contributions to impacts of new development; try to ensure each developer pays a comparable, fair share.

Engage the Development Community – Be aware of how CACs could impact projects and their viability Community Amenity Contributions: 2 Ministry of Community, Sport Balancing Community Planning, Public and Cultural Development Benefits and Housing Affordability Part 1: Background on CACs and the Rezoning Process Local governments face many challenges in managing growth. They need to ensure that new development is acceptable to the community, respects the community plan and that infrastructure, amenities and services are in place to keep pace with growth. Provincial legislation allows local governments to ensure that developers install services as part of their development, both on the site itself and immediately adjacent.

Legislation also allows local governments to impose development cost charges (DCCs) for certain off-site services, namely, water, sewer, drainage and roads and park land.4 Increasingly, local governments are relying on the rezoning process to secure affordable housing, and contributions towards recreation facilities and other community amenities that cannot be funded through DCCs.

LGA section 904 allows zoning bylaws to include the option of additional (bonus) density subject to specific conditions, which can include providing amenities. This provision in the LGA has been in place since 1995.

As an additional approach, local governments sometimes negotiate CACs from those seeking a change in zoning. A change in use or an increase in density generally boosts the value of land, and provides the possibility of a financial benefit to the land owner, developer or local government.

Increasingly, local governments and residents see this as a reasonable opportunity to help fund community amenities.

In considering CACs, it is important that local governments understand the limits of their legislative authority, follow good planning principles, be fair, clear and consistent, and understand the financial and market impacts.

Housing affordability is a particular challenge for many B.C. communities. This guide describes how CACs, if not handled carefully, can potentially decrease the supply of new housing and lead to increases in housing prices. It is important that local governments recognize the relationship between CACs and housing affordability and make efforts to balance the opportunity to obtain public benefits, such as community amenities, with the goal of helping families to secure affordable housing.

Definitions “Affordable housing” is housing that does not exceed 30% of household income. This is the general guideline for social and subsidized housing in B.C. and is commonly the percentage lenders use to determine what a family can afford to borrow when purchasing a home.

“Affordable market housing” is privately-owned housing that is owned or rented at prices set by the market and affordable to low-middle income earners.

“Community Amenities” contribute to the attractiveness of a project or a neighbourhood, and typically include aesthetic features, public spaces, and facilities to meet a range of social, cultural, recreational, and infrastructure needs of the community.

The City of Vancouver has comparable authority, under the Vancouver Charter, for “development cost levies”.

Community Amenity Contributions: 3 Ministry of Community, Sport Balancing Community Planning, Public and Cultural Development Benefits and Housing Affordability “Community Amenity Contributions (CACs)” are amenity contributions agreed to by the applicant/developer and local government as part of a rezoning process initiated by the applicant/developer. CACs can take several forms including community amenities, affordable housing and financial contributions towards infrastructure that cannot be obtained through DCCs, such as recreation facilities or a fire hall. The agreed-to contribution would be obtained by the local government if, and when, the local government decides to adopt the rezoning bylaw.

“Density Bonus Zoning”, as authorized under LGA s. 904, is intended to provide options for the developer to build either to the “base” density or to a higher level of density, if they provide certain amenities or affordable housing, or meet other specified conditions. The developer, by right, always has the option of developing at the base level of density, but usually has an incentive to consider higher densities.

Legislative Context Provincial legislation enables local government to require services, collect fees and/or obtain land from new development to address certain impacts of new growth. The following sections of the

LGA enable local governments to require new development to provide:

 DCCs for off-site services (s. 933);

 money towards acquiring school sites (s.937.3);

 on-site services related to subdivision (s.938);

 excess capacity or extended services (s.939);

 up to 5% of land being subdivided for park land, or cash-in-lieu (s.941); and,  land for roadways (s.945).

Not all impacts of development are covered by these legislative provisions. Increasingly, local governments are taking the position that new development should not be a burden on local taxpayers and are supplementing the above requirements with CACs. For example, local governments commonly impose DCCs to pay for allowable items such as water and sewer mains then seek contributions towards facilities not covered by DCCs, such as expansion of a fire hall, recreation centre or library.

Whether new development is on “green field” sites or accommodated by the redevelopment of existing areas, it often brings resistance. Existing residents are often concerned about negative impacts of new development, such as the increased number of cars parked on streets or obstructed views. Community amenity contributions used, for example, to help fund upgraded parks, street art and community centres, have helped existing residents see tangible benefits from new development.

Local governments also report a trend in the demand for amenities that relate to a change in urban form. For example, where a single family neighbourhood transitions towards higher density, backyards are reduced in size or eliminated and residents’ expectations for quality outdoor public spaces and other amenities increases. In response, local governments may turn to CACs to help pay for these community amenities.

With some of the most expensive housing in North America occurring in British Columbia, local governments are also using CACs and density bonus zoning to help meet housing needs that the housing market is failing to deliver on its own.

Community Amenity Contributions: 4 Ministry of Community, Sport Balancing Community Planning, Public and Cultural Development Benefits and Housing Affordability Examples of affordable and special needs housing types that have been provided include pricecontrolled, limited equity market housing units; housing for people with special needs; and guaranteed or time-limited rental units with rent controlled mechanism5.

–  –  –

http://wcel.org/density-bonus Community Amenity Contributions: 5 Ministry of Community, Sport Balancing Community Planning, Public and Cultural Development Benefits and Housing Affordability Part 2: Staying on a Solid Legal Footing A common misperception is that local governments have authority to require CACs as a condition of rezoning. In fact, there is no authority to impose such conditions on a rezoning applicant; any contributions must either be at the initiative of the applicant/developer or emerge from rezoning negotiations between the applicant/developer and the local government.

Legal authority, generally speaking, for local governments is derived from statutes, such as the LGA or the Community Charter. The statutes also include conditions and limits on these powers. Court rulings over time have provided interpretations of this legal authority and direction on how it can be used.

In some cases the law is mandatory, i.e. requires local government to do something. In other cases, it is discretionary, i.e. it gives local government latitude to do something or not. The courts have acknowledged that zoning is a discretionary power, so councils/regional boards can choose whether or not to approve a rezoning.

The courts have also recognized that councils/regional boards can examine a wide range of considerations before exercising their discretion on whether to approve a rezoning request and adopt the proposed zoning bylaw. Most considerations fall into two categories.



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