On Financing Growth: Down Memory Lane with Cameron Gray

As we watch with interest the discussion on how to create more affordable housing, no doubt the subject of Community Amenity Contributions (CACs) will arise.

How fortunate, then, that Cameron Gray – the City’s past Director of the Housing Centre – has just penned a paper that provides an historical perspective:

Vancouver’s Community Amenity Contributions (CACs): A ramble down memory lane, Cambie, and a couple of side streets.

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This is still a first iteration and Cameron is welcoming comments – so we’ve posted it on the SFU City Program website for wider distribution, and you can add comments here and on the post at the SFU City Program blog.

If you find the prospect of this paper a little too intimidating, here’s a handy summary:

• CACs are not new and are here to stay. Pots of gold, big and small, lurk at the end of rezoning rainbows, and there are lots of public goodies to spend some and maybe even most of it on.

• CACs cannot be calculated or negotiated without using development economics and real estate analysis, and the question not whether but how.

• CACs (or DCLs) imposed through rezonings are not hidden taxes; they are profit sharing between landowners and developers, and the City and its neighbourhoods.

• CACs need not reduce the supply of development sites or affordability, and may in fact increase the supply of sites and improve affordability.

• Rezonings increase land values and CACs reduce them, and certainty is required around the zoning and CACs so developers know what they can afford to pay for sites and landowners know how much they can ask.

• CACs can reduce the supply of development sites and affordability if theyfrustrate the negotiations between landowners and developers.

• The Cambie Corridor Plan may not result in much development because it provides little certaintly regarding the density that may be approved through rezonings or the CACs that may be required.

• The City should prezone areas, such as the Cambie corridor, to provide a base density with a flat rate CAC (and/or DCL) so that land values can be calculated, landowners and developers can sell and buy sites, and developers can initiate ‘top-up’ rezonings for additional density which would be subject to negotiated CACs.

• The City needs to develop city-wide and neighbourhood public benefit strategies to provide the framework for allocating CACs among and managing the competition between city-wide and neighbourhood priorities.

• CACs can be substantial but only so much value is generated by rezonings; CACs can supplement but not replace capital funding for public amenities raised through property taxes or from other sources.

• CACs should not replace senior government funding previously provided for public amenities but should lever Federal and Provincial funding instead.

• CACs should not be used to fund endowments to cover facility operating costs as endowments are inevitably depleted; if the City isn’t prepared to fund the operating costs out of its operating budgets, the public amenity proposed to be paid for by a CAC is probably not a priority.

• Rezonings should be motivated by the need to respond to changing social, demographic and economic realities, not by the need or desire for funding to pay for public amenities.

• The design, massing and uses proposed in a rezoning should be resolved before there is any discussion of CACs.