“In Stream” applications are applications that have been duly submitted into the approval process with the goal of satisfying stipulated requirements of the municipality to secure a development permit or building permit. The challenge arises when applications spend many months to years “in stream” while the ‘goal posts’ are shifting. There is no shortage of tales that relate to moving requirements, the most egregious being financial requirements shifted while in the middle of the approval process.
Work in stream creates issues we are constantly addressing whether it be concerning changes in the BC Building Code, municipalities passing bylaws about Development Cost Charges (DCCs) or Community Amenity Contributions (CACs), and now pending, opting into the new Amenity Cost Charges (ACCs) financing structure being proposed by the Province.
BILL 46
Introduced by the Province last fall, Bill 46 addresses a new financing structure in the form of ACCs, intended to provide a more structured and predictable model than the CACs they are proposed to replace. At this point, ACCs are an “opt-in” for municipalities, and we are hearing provincial guidelines and regulations are not going to be ready until the fall or even into 2025.
Should cities choose to opt in earlier, they will need to divert significant staff resources to meet the criteria required by the province as outlined to date. Opting in will pose issues for municipalities as they will need to determine “grandfathering” dates or cut-off points for in stream applications, as it is likely no matter what they do, it is going to upset someone.
In the context of the new DCC rules, the scope of what these charges can be applied to has been extended to include road works/infrastructure, and being hit with these significant capital works costs could be very costly.
Comparatively, the application of new DCCs to an active ‘in stream’ application could be fatality consequential – but at least it’s measurable.
There are also issues embedded in the new regulations, as the suggested periods for exempting in stream applications from increases in charges adopted by a municipality are typically way shorter than by which the application can be approved. The net result is at best adversely affecting affordability and at worst sinking projects that can no longer be considered financeable by the lender.
Last week, New Westminster announced they would be moving forward with ACCs and that they have struck January 29, 2024, as the cutoff date for applying the ACC regs to applications – everything before that date will be under the old regime. Burnaby will be sharing their intentions this week, and it’s great that this is getting out sooner rather than later.
IMPACT ON WORK IN PROGRESS
What is the fate of the ‘in stream” applications?
A pivotal and significant project in Port Moody that has been hung up for years, and finally moving forward under the new council in Port Moody, was hit with 10’s of millions of dollars in additional costs due to the increase in charges from Metro. In the City of Vancouver, Anthem Properties has asked for a second deferment in paying DCCs for a project as the increased fees and the need to pay at DP are proving to be a cash flow challenge that threatens the project.
While these noted projects are massive, and the proponents are very well established, stable developers, the majority of our builder members, who form the backbone of our industry, and deliver a majority of homes to our communities, operate within a much more modest scope. These builders, individually undertaking much smaller volume projects, are more vulnerable to the effects of the shifting approval requirements and financial charges, making their financing significantly more precarious, in turn, impacting their ability to help meet the demand for housing.
UNINTENTIONAL CONSEQUENCES
The issue of ‘in stream’ is not limited to charges alone. We are also seeing some of the unintentional consequences of the Transit Oriented Development policies tabled by the Province as well. The City of Coquitlam is struggling to determine the potential impact of this policy on plans on the North Road corridor adjacent to the Evergreen Line. While Coquitlam has done a credible job in taking advantage of the Evergreen windfall, with a focus on adding housing supply and density, many projects are now in question of meeting some of the new provincial policies and this affects the infrastructure and the plans already in place to accommodate the in stream projects.
APPROVAL PARALYSIS
It is important to note that these applications that have already been the subject of millions of dollars of investment by the proponents are now in limbo. The effect of the lag time in releasing guidelines, regulations, and manuals supporting the recent provincial bills has seen widespread “approval paralysis” further exasperating the situation for in stream and pending applications.
Then we have the contrived and disingenuous actions witnessed in the Township of Langley (ToL) rescinding multiple approved plans and freezing out a large number of in stream and pending applications, again threatening the much-needed supply of affordable housing through escalating costs or rendering projects financially unviable.
These actions were undertaken with the expectation that every single-family lot represented in those approvals would be developed as a multi-plex and increase the projected population four-fold. Citing adverse impacts on engineering, community services, schools, parks, traffic and parking, the Council imposed one of the single biggest reversals in recent memory and in one member’s case shelved six of seven area projects. This action, and the ToL increases of 84% in DCCs, were affected by Council with zero regard to in stream applications.
CUT-OFF DATES
Code changes have always set cut-off dates for accepting permits under the “old” vs “new” criteria and these dates typically are known well in advance with most applicants conducting themselves accordingly, albeit there is frequently a push to flood in applications prior to the cut-off to beat any increase in costs driven by new code criteria.
The point is, that there should not be any ambiguity – if your application is in, the rules that were in place at the time of application should be the ones that apply. Proponents made applications in good faith, after preparing their proformas, securing financing, undertaking purchase, and incurring consulting fees and it is reasonable to believe that it is the regulations they based their decisions on that should prevail.
FINANCIAL GAINS
However, in many cases, it is a significant financial advantage to the municipalities to capture the highest possible number of projects/units under new DCC/CAC/ACC schedules as the revenue generated can be substantial. The fact that this action has a seriously negative impact on the applicant seems of no concern to the municipalities, nor does it seem to be recognized that should the project survive the “moving goal post” game, the cost will be downloaded to the purchaser, all while the question of why things are so expensive are being discussed in council chambers.
BOOTS ON THE GROUND
So, what can we do?
The HAVAN GR team has actively raised the issue of in stream protection and continues to do so at the highest levels while engaging as an active participant on the provincial Development Finance Review Committee, where in conjunction with CHBA-BC, UDI, and other industry associations, we are advising staff of the implications. We also have corresponded with the Superintendent of Municipalities to register our concern over the procedure and lack of consideration.
Relevant Development Liaison Committees and municipal Development Advisory Committees are also being attended in our catchment area.
We are always interested in hearing about your experiences with specific municipalities – if you are being caught up by these sorts of circumstances, and in some cases would be looking for direct participation in these DLC and DAC meetings. If we don’t raise our concerns and voices, the situation will continue to the detriment of the industry and ultimately the consumer. Real-time information and the downstream impacts on “costs per door” is what gets the attention of both elected officials and more to the point – the consumer and voter! Please contact us at info@havan.ca, or diana@havan.ca
HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together to address the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.
Looking to stay up-to-date on Metro Vancouver’s residential housing industry? Sign up for Ron’s weekly Monday Morning Briefing and other HAVAN emails here.
QUICK BITES …
- HAVAN’s AGM is scheduled for Wednesday, April 3, online, noon – 1 pm. Details, PROXY Form, and registration here:
AGENDA:-
Approval of the October 4 Annual Election Meeting minutes
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Presentation and approval of HAVAN’s Audited Financial Statements (to be sent to members)
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Approval of the auditors
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Presentation of the BCIT Scholarships
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- In a release from UBCM following the recent Housing Summit, the need for financing reform is underscored and provides some insights on the concerns seen from the municipal perspective.
- Here is the announcement from CMHC in regard to “seed funding” to provide “Financial assistance to help community housing providers with the costs of early development activities related to the predevelopment costs of building a new affordable housing project or renovating an existing affordable housing project.”
- Please see this piece from the Government of Canada concerning the “Under used Housing Tax” (UHT), a federal 1% tax on the ownership of vacant or underused housing in Canada, for which a declaration must be filed with CRA even if it does not directly apply. Please become acquainted with this requirement and or ensure your account has dealt with it to avoid penalties. In a companion piece, the Financial Post comments on the issue of “silly tax policies” that won’t fix anything is discussed – want to guess where the UHT fits in?
- The Vancouver Sun has a feature article focusing on Vincent Tong, CEO of BC Housing, who assumed the position in the wake of the retirement of the embattled former CEO which saw him and the organization under scrutiny and audit. Tong took over under very strained circumstances and is trying to move the needle on BC Housing’s credibility and the serious need to take a leadership role in the housing space.
- Construction Canada reviews the changing nature of renovations and their relative complexity are discussed by current HAVAN Chair Henri Belisle of TQ Construction, and HAVAN board member and past Chair, Mark Cooper of Shakespeare Homes & Renovations, among others. Both Henri and Mark note that new code and performance requirements have dramatically raised the level of complexity of a typical renovation project and demand the need for informed clients and professional and qualified contractors.
- Last week we said farewell to Carmina Tupe’ GR Director for CHBA-BC for the last three years. We congratulate and thank Carmina for her service and contributions to our interactions with the provincial government over these tumultuous times full of changes and shifting policies. Carmina was always proactive, well informed, and prepared to advocate for our interests – aligning where it made sense and pushing back as required. We wish her the best of luck as she returns to the Toronto market and assumes her new responsibilities as development manager for a high-rise developer. Cheers and Good Luck Carmina.
