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Vancouver, British Columbia

Background

Royal Bank - 400 West Hastings Image provided by www.seevancouverheritage.com

Vancouver, population 514,000, occupies a peninsula on the Strait of Georgia, 20 miles north of the US/Canadian Border.

In 1983, the City adopted a Transfer of Density Policy and Procedure, which allows density transfers that achieve one or more of the following goals.

  • To preserve buildings or sites listed on the Vancouver Heritage Register.
  • To create open space or parkland.
  • To facilitate development in areas with mixed use zoning.
  • To improve urban design.
  • To implement view-protection policies.
  • To protect existing single-room occupancy housing.

The Policy and Procedure lists several limitations on transfers.

  • Sending and receiving sites must be located within the same zoning district. However, the Policy provides some exceptions to this rule. For example, density from heritage sites can be transferred between several zones, as detailed below.
  • If the goal of a proposed transfer is urban design, the sending and receiving sites must be within the same block or across a street.
  • Density bonuses allowed for public infrastructure or amenities cannot be transferred. However, bonuses granted for the rehabilitation of a heritage site can be transferred if the bonus cannot be used on the heritage site without undue impact on the character of the preserved building or its surroundings.
  • No more than two sites can be involved in a transfer unless a heritage site is involved.

The Policy and Procedures provide detailed guidance regarding transfers intended to achieve heritage objectives. For example, the City gives preference to heritage sites that will be used for cultural, social, recreational and educational uses. Also, a parcel cannot serve as a receiving site under certain specified circumstances, such as already having been granted a 15 percent hotel bonus or having single-room-occupancy housing unless that housing will be preserved or replaced.

Implementation

Although the Policy and Procedure summarized above includes multiple goals, only one transfer to date has been for a non-heritage purpose (the creation of a park at 901 West Hastings to provide open space at the foot of Hornby Street). The main emphasis of this program to date has been on the heritage transfer program, addressed in this and the following section.

Sending Sites

The sending areas are now confined to heritage properties in the Downtown, the West End, Central Broadway and Chinatown. The calculation of density available at the sending site is complex because the program aims to motivate rehabilitation as well as preservation of the heritage property.

  • In a financial analysis, the heritage site owner documents the difference in property value between the property redeveloped with a new building versus the property with the historic structure preserved and rehabilitated. If the City agrees with this analysis, this gap is considered to be a reasonable incentive to motivate owner participation. For some properties, the owner will not achieve the incentive amount simply by being allowed to transfer the residual density, or the difference between the floor area of the landmark building and the floor area allowed under existing zoning. If so, the City will agree to a bonus density. The amount of bonus density granted is based on an assumption regarding how much receiving site developers will pay for each square foot of density bonus. So far, developers have paid between $21 and $27 per bonus square foot. To use the example from the 2002 study referenced below, if the retention/rehabilitation incentive is agreed to be $1 million and developers are expected to pay $25 per square foot of transferable density, the incentive could be expressed as 40,000 square feet of floor area.
  • The heritage property owner and the City then agree on how much of the residual and bonus density, if any, can be located on the heritage property. The amount that cannot be placed on site is approved for transfer.
  • Once approved, the transferable density can be held or sold by the owner. Portions of the transferable density can be sold at different times for use on different receiving sites. The City refers to transferable density that has been approved but not yet transferred as being in its density bank. The bank consists of the Planning Department?s accounting of density approvals and transfers.
  • The density can only be sold to the developers of receiving sites and not to intermediaries. Although the amount of bonus density is established by an assumed sales price, the actual sales price is reached through negotiations between buyers and sellers.

Receiving Sites

Abbott House, 720 Jervis Street Image provided by www.seevancouverheritage.com

The potential receiving areas include all sites, except those zoned CD, in the Downtown, the West End and Central Broadway. (Chinatown can be a sending area but not a receiving area.) The CD zone is not currently eligible because the CD zone stipulates an exact building envelope for each site that technically cannot be enlarged without changing the specifications of the zone. Other sites that are not eligible are those that have already received their maximum density through a hotel bonus, a single-room-occupancy housing bonus or previous heritage density transfers.

  • Regardless of the zoning of the sending site, the transferred floor area can be used for any residential, commercial or institutional purposes as allowed by the receiving site zoning.
  • The receiving site can receive a 10 percent increase in FSR through transferred density without having to get a rezoning.
  • To exceed a 10 percent increase, the developer must obtain a rezoning. The maximum density is limited by the City’s urban design goals and height limits. (According to the 2002 study cited below, some developers believe that the City is not consistent in determining maximum densities. They also claim that the City sometimes requires additional project amenities or infrastructure when approving these rezonings, thereby reducing or eliminating the profit incentive to use the density transfer option.)
  • The City also allows development projects to achieve the administrative, ten-percent density bonus by providing on site amenities such as cultural facilities and social housing. At some sites, developers can achieve the maximum density bonus through these non-historic-density-transfer techniques.

BC Hydro, 900 Burrard Image provided by www.seevancouverheritage.com

The Vancouver Heritage Density Transfer Program has been very successful. A total of 17 sites have been approved for density transfer so far, generating a total supply of 968,178 square feet. Of this total approved density, 571,652 square feet have been transferred. (However a study prepared in 2002 cautions that two large projects accounted for over half of this demand: Bentall at 550 Burrard and Wall Centre at 1001 Hornby.) The remaining amount of approved density, 396,526 square feet, has not yet been transferred.

Of the 17 sites, six have transferred all of their approved density, 330,357 square feet, to eleven receiving sites.

  • BC Hydro, 900 Burrard – 58,927 square feet
  • Park, 901 W. Hastings – 140,000 square feet
  • Abbott House, 720 Jervis Street – 15,973 square feet
  • Canadian Linen, 1200 Richards Street – 36,457 square feet
  • The Architecture Center, 440 Cambie Street – 35,000 square feet
  • Stanley Theater, 2750 Granville Street – 44,000 square feet

Another five buildings have had 386,275 square feet approved, of which 241,295 square feet have been transferred to 24 receiving sites and 144,980 remains to be transferred.

  • Public Library, 750 Burrard – 196,824 square feet approved, 3,315 remaining
  • Royal Bank, 400 West Hastings – 33,751 square feet approved, 33,751 remaining
  • 211 Columbia Street – 37,200 square feet approved, 11,096 remaining
  • Greencroft, 3838 Cypress Street – 38,500 square feet approved, 37,600 remaining
  • London Building, 626 W. Pender – 80,000 square feet approved, 59,146 remaining

And six more heritage buildings have had 251,546 square feet approved but have experienced no transfers yet.

  • 55 Water Street – 60,800 square feet approved, 60,800 remaining
  • St. Regis Hotel, 602 Dunsmuir Street – 16,091 square feet approved, 16,091 remaining
  • Taylor Building, 310 Water Street – 36,285 square feet approved, 36,285 remaining
  • Christ Church, 690 Burrard Street – 73,170 square feet approved, 73,170 remaining
  • Greenshields Building, 339-341 Water Street – 37,000 square feet approved, 37,000 remaining
  • Pantages Theater, 144 E. Hastings Street (approved in principle) – 28,200 square feet approved, 28,200

Christ Church, 690 BurrardImage provided by www.seevancouverheritage.com

2002 Study

In 2002, the City conducted a study of the effectiveness of its Heritage Density Transfer Program and the appropriateness of expanding the program to historic properties in Gastown, Downtown Eastside Oppenheimer District, First Shauhnessy, heritage interiors and sites heritage sites designated before 1983, when compensation was available through this program. This study weighs the desire to expand the program to new sending areas with the possibility that oversupply could reduce the value of heritage density, thereby making participation less attractive for the owners of landmark buildings. The study presents four main recommendations.

1. Improve monitoring of the market to allow management of additional supply.

2. Improve guidelines, communications and marketing.

3. If monitoring indicates oversupply, manage supply by considering some or all of the following.

  • Impose a moratorium on new heritage bonuses.
  • Focus bonuses on higher priority landmarks.
  • Annual limits on density approved for transfer.
  • Prioritize new sending areas and/or add them incrementally.

4. Consider increasing demand by any or all of the following means.

  • Eliminate DCL charges.
  • Expand the receiving areas.
  • Allow developers a heritage bonus on top of amenity and housing bonuses.
  • Allow intermediaries and investors to buy density.
  • Increase the bonus to receiving site projects as long as urban design and other policies are met. Increase the 10 percent maximum for administrative approval where appropriate. Make CD-1 sites eligible for 10-percent bonus without rezoning.
  • Require a portion of bonus density in a receiving site project to come from a sending site with approved but unused density.
  • Create a formal, City density bank.
  • Offer heritage owners other incentives.