Vancouver realtor Sydney Deng sold 10 adjacent homes last month in the 5100 block of Cambie Street, near 34th Avenue, for about $3.4 million each – triple their assessed value.
Deng told Business in Vancouver on November 1 that she had closed the sales but she would not reveal who bought the homes nor whether they were aware of how the city extracts community amenity contributions (CACs) during rezoning and development cost levies (DCLs) on development approvals.
That could mean that no future redevelopment is viable, Rennie Marketing Systems president Bob Rennie told BIV.
?Properties on Cambie are selling at multiples that are pioneering and a bit unprecedented,? said Rennie, who is marketing the PCI Developments Corp.?s Marine Gateway mixed-use mega-project near Cambie Street and Marine Drive.
?Everybody should be doing their homework and the city should be declaring the rules as much as possible so the developer knows what density can be achieved,? he said. ?Then it?s buyer-beware.?
City council approved a plan in May to raise height limits to between six and eight storeys along the corridor with taller, denser complexes up to 12-storeys tall near station areas. No properties have been rezoned on the corridor, except for the stretch near PCI?s development. But homeowners have started to sell their properties as though their land has already been rezoned.
?We?re still seeing a great number of proper real estate deals, too,? said City of Vancouver planning director Brent Toderian.
Thus far, developers have made six development or rezoning applications along the corridor and 14 inquiries into potential applications. All of the potential projects conform to the broad strokes of the city?s plan and are based on what Toderian calls ?proper assumptions? of how the city will exact CACs and DCLs.
?There is a consistency to how [CACs and DCLs] are calculated,? Toderian said, ?so it?s not just by negotiation and not just by what a developer is willing to offer.?
Vancouver has charged developers CACs and DCLs for decades. Critics, such as former councillor Peter Ladner (see At Large, page 28) call the system ?mysterious, time-consuming and unpredictable,? but Toderian bristles at that description.
Toderian admits that there?s no set percentage of a project?s value that the city will expect to be voluntarily provided in the form of social housing, day care or heritage restoration.
But he said the process is the same and the starting point is always a property value that city real estate staff determine. That value is not the assessed value. Nor is it necessarily the price the purchaser paid for the property before it was rezoned.
?Staff look at what is a reasonable purchase price given the price of land and the challenge of consolidation of land,? Toderian said.
The so-called ?market price? that staff determine for the property before rezoning incorporates the expectation that 20% of the density for any future Cambie corridor development will have to include rental housing. Council approved that requirement in May.
Once the city?s presumed ?market price? is determined, the city takes between 70% and 80% of any increase in value (?land lift?) that accrues from rezoning.
If a developer overpays for land and then tells the city that he wants to contribute more than the required amount of CACs in exchange for more density, Toderian said the city would turn him down.
?We don?t change our plan to match your purchase price.?
Toderian added that the city?s plan is clear and that it does not help for Non Partisan Association (NPA) mayoral candidate Suzanne Anton to advocate higher density and building height limits near Oakridge Centre – a proposal that Rennie supports because he sees more density as the only way to make the Vancouver housing market affordable for first-time buyers.
?If we continue to want to challenge the plan, we?ll never get clarity,? Toderian told BIV.
?We spent thousands of hours and thousands of people participated in what was a very clear decision of council. Now the goal is to follow the plan for the next few generations because we have clarity.? ?
