In what the district is calling a compromise in the face of economic headwinds, Saanich has cut by 60 per cent the target rates for community amenity contributions expected for some new residential construction projects.
Community amenity contributions can include things like affordable and supportive housing units, as well as parks, childcare facilities, community facilities, public art and cultural spaces. They can also come as cash-in-lieu contributions.
On Monday, Saanich council approved a new policy that is meant to create a more transparent and predictable process when it comes to what the district expects from developers in exchange for the right to build.
Under the new policy, developers seeking to build residential projects with 350 units or more are encouraged to negotiate with the district for amenities based on a “land-lift analysis” — an estimate of increase in land value from a rezoning approval — with the expectation that the contribution would be at least 50 per cent of the total calculated land-lift value.
Projects that envision between seven and 349 units would be subject to a community amenity contribution of $2,000 per unit for condominium developments in mixed-use projects, $2,880 per unit in residential projects and $3,840 per unit in townhouse projects.
Those rates are well below what had been proposed earlier this year, when the contribution per townhouse unit was $9,600 and condominiums ranged from $5,000 to $7,200 per unit.
“The challenge that we have is trying to set a rate that will collect amenity contributions towards greater livability and affordability in the district against a very quickly or rapidly evolving backdrop of market conditions that are stalling development projects,” said Mayor Dean Murdock.
He suggested the goal was not to push development costs past the breaking point, as a consultant’s report noted the continued rise in interest rates is making more projects unfeasible.
Coun. Karen Harper noted during Monday’s debate that if the numbers hadn’t gone down,”we’d be getting nothing.”
“We’d be having no development occurring in Saanich. With development, it’s always that fine spot of trying to figure out what is that sweet spot. And right now, the sweet spot is a lot different than it was two years ago.”
Murdock said the new policy creates clear expectations.
“Someone who has an application for redevelopment isn’t surprised by what Saanich is seeking in terms of an amenity contribution. And we’re hopeful that what we’ve established is reasonable enough that it doesn’t stop somebody from moving forward in the development process,” he said.
The policy includes exemptions for all purpose-built rental housing that is secured for a period of 50 years or the life of the building, non-market homes, projects with six or fewer units and non-residential development.
Coun. Colin Plant said he was disheartened that the contributions had been cut in half, but agreed that in the face of the economic conditions there’s little choice.
Plant did warn developers, however, that anyone approaching council for a development permit needs to include an element of affordability in their proposal.
Casey Edge, executive director of the Victoria Residential Builders’ Association, wrote in a letter to council that the municipality “continues driving up the costs of new housing via a wide range of fee increases,” citing everything from development cost charges to tree bylaws, building permit fees and new building regulations.
Edge noted that Saanich’s housing starts have declined 40 per cent from 625 in 2017 to 376 in 2021. “The focus should be on efficient permit processes, rezonings and boosting supply rather than adding more regulations and fees to acquire more revenue from homebuyers.”
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