New Vancouver-area land-use policies surrounding provincial transit-oriented development rules are unfeasible, while regional fee increases reduce the financial viability of building in previously designated growth areas, say two local commercial real estate industry leaders.

Mark Goodman and Ian Brackett, principals with Vancouver-based Goodman Commercial, contend that the new municipal policies are “slamming the brakes on housing development” across the region. The two veteran multi-family real estate brokers made their claims in an op-ed column that they co-authored. The column has been published on the company’s website and by a number of Vancouver-area publications, including the Vancouver Sun.

The new policies are in response to provincial legislation that requires more transit-oriented developments that will increase multi-family housing near SkyTrain stations, bus loops and public-transit hubs. Goodman and Brackett point to comments that politicians and administrators have made in city council meetings and other public sessions as indicators that the municipal land-use policies are clearly not working.

The two brokers praise the City of Vancouver for responding to the province’s tight timeline with the, thus far, “most comprehensive” transit-oriented-area rezoning guidelines. But Goodman and Brackett note, the city’s planning department has admitted that the proposed policies were “too restrictive” to make development feasible outside of a few select locations.

“Essentially, the new rules were nothing more than window dressing,” Goodman and Brackett write. “As we have seen over and over across the region, simply designating a property for higher density does not automatically make it a viable development site. Details matter.”

In Burnaby, a similar issue arisen, but the roles of councillors and planners were reversed, Goodman and Brackett contend. City staff recommended reducing a below-market housing requirement that has become a barrier to the development of new supply after a hot market cooled. But “without any financial analysis of their own,” city council amended a motion and voted to “push the below-market requirements back up.”

“While these inclusionary housing policies are well-meaning, for any of the desired housing to be built, the overall development must be profitable,” write Goodman and Brackett. “When the required percentage of below-market units is set too high, the project as a whole becomes unfeasible.”

Goodman and Brackett contend that the policies resulted after “sound analysis” was ignored and spell “a waste of staff time and resources on policies that are likely to see few projects move forward.”

The two brokers’ scathing critique comes after they gave Burnaby a failing grade and most of the Vancouver region’s other large cities low marks in the summer for their responses to the new provincial rules. Vancouver’s grade, a B, was an exception to the otherwise poor marks.

Goodman and Brackett issued the grades in an article that doubled as a report card.

The provincial legislation includes a requirement for municipalities to allow taller residential towers, of eight to 20 storeys, near SkyTrain stations. In the summer, Goodman and Brackett described resulting municipal policies as “a chaotic regulatory patchwork” in the region.

Now, Goodman and Brackett argue that upcoming region-wide development cost increases are “punishingly destructive.” The hikes were set by Metro Vancouver, an umbrella group for the region’s municipalities.

The group includes some mayors and councillors from the various municipalities and sets funding policies and guidelines tied to the region’s transportation projects, infrastructure and other major initiatives.

Metro Vancouver’s development cost charges are scheduled to increase January 1 and rise more over the next two years. Goodman and Brackett note that a third-party analysis of Metro Vancouver’s hikes concluded that “the financial viability of market rental apartment development is marginal under current market conditions in most locations throughout Metro Vancouver at the current [development cost charge.]”

The increases are “crippling outcomes” for a region already facing a severe rental-housing shortage, contend Goodman and Brackett. Furthermore, the brokers argue, the analysis showed that the higher development cost charges are likely to reduce the number of viable projects, slow the delivery of new rental supply, and trigger higher rents for projects that are built.

“Yet, even knowing the negative effects of their intervention, a disturbing number of planners and politicians seem happy to rationalize regulations that work counter to the stated goal,” write Goodman and Brackett

Pictured: Mark Goodman of Goodman Commercial

Photo: Courtesy of Goodman Commercial