Council Meeting Report January 22, 2018
“A Veil of Secrecy”
It has come to the attention of Oak Bay Watch that a 4-lot Heritage Revitalization Agreement (HRA) subdivision application on Foul Bay Road and Brighton Avenue will NOT require a Park Land Acquisition Reserve Fund Payment. This payment to the Community would be significant as it can be up to 5% of the value of the land.
At the Council Meeting, planning staff responded to questions from Councillor Braithwaite and a resident, regarding Agenda Item #8 - Reserve Fund Report. The staff explanation was that:
A Park Land Acquisition Payment is only required by legislation if 4 lots are “created”. In this application payment is exempted as there will be only three new lots - the original lot is not counted.
However, exempting this Park Land Acquisition Payment based on the staff interpretation is contrary to:
The Provincial Local Government Act Section 510 (1.) and (1.b.) that makes it very, very clear:
“An owner of land being subdivided must ….. pay to the municipality or regional district an amount” … and, Subsection (5.) states this amount, “must not exceed 5% of the land being proposed for subdivision”.
Under Section 510 (3) the exemption to provide this payment only applies if:
“Fewer than 3 additional lots would be created”;…and
The Director of Financial Services Report – Agenda Item #8 (see Municipal Website) not only confirms the above Local Government Act Legislation but, also contradicts the staff position that has mistakenly stated that the developer is exempted from providing the Community with statutory reserve funds.
The Director of Financial Services Report states:
“Under the Local Government Act, an owner of land being subdivided into three or more lots MUST either provide park land or pay cash in lieu. Such payments must be credited to a statutory reserve fund”.
A recent Vancouver Sun article on the “Real Estate Investment Boom” states that no one should be a “free rider” when paying for roads, services (parks) and schools.
There are millions in development profits involved. Reserve Fund payments are necessary and substantial - some BC municipalities apply the charge to the increased value of the land before the subdivision receives final approval (see Attachment # 1).
As explained in previous Oak Bay Watch newsletters and Planning Staff reports, Heritage Revitalization Agreement subdivisions take precedence over Zoning Bylaws. Subdividing existing and assembled lots, while providing substantial profits to the developers, have serious impacts on the immediate and general community. While it is recognized Heritage Revitalization Agreements (HRAs) can have community benefits, many Councils have bylaws and policy in place to ensure that HRA subdivision developments:
- Are used appropriately,
- Balance private and public benefits and
- Address community concerns.
The King George Terrace Subdivision also divides one large existing lot into four and is therefore subject to a Park Land Acquisition payment – (see Preliminary Approval Report excerpt Attachment #2). Oak Bay Watch, without any indication to the contrary, assumed then this legislated payment would apply as well to the Foul Bay and Brighton 4-lot Subdivision.
If this incorrect exemption, accepted by Council, had been disclosed when the Brighton/ Foul Bay (HRA) Application was introduced on December 11, 2017, at the Council Committee of the Whole, Oak Bay Watch would have provided Council with the above “correct” Local Government Act Park Land Acquisition Payment information. Also, we would have explained that Oak Bay already provides a substantial development subsidy by not collecting Development Cost Charges to defray the cost of infrastructure adaptation. This is standard in other Communities. It is not clear now whether the District can still apply this charge, as Council has not given final approval for this project.
Oak Bay with its predominately well-kept single-family homes, many with interesting architectural features, is presently desirable. Therefore a premium exists and property values are higher than in other municipalities. This means that sub-dividing a single-family lot in Oak Bay and adding a number of new homes increases the value significantly and is, therefore very lucrative. It also means, however, that there will be much more pressure on our old, neglected, under-funded infrastructure, as well as having neighbour and community impacts. Unfortunately, Council is loading the costs associated with subdivision development onto existing residents.
Oak Bay Watch made a presentation to Council early in this term requesting Oak Bay to introduce and implement a Development Cost Charge (DCC) bylaw and policy. Clearly not a priority, addressing this DCC issue has been delayed until we are nearly at the end of this Council’s term of office. Developers stand to make millions of dollars from the various types of subdivisions: residents should not have to foot the bill for all of the Community’s financial impacts.
It’s no wonder then when a resident at the Council meeting asked:
“In reference to Agenda Item #8, Municipal Reserve Funds Report -"For the Park Land Acquisition Reserve Fund (up to the 5% payment), if the Approving Officer's report for a strata subdivision indicates a contribution to Land Acquisition how/when is the information reported or presented in public records."
She received no answer.
In some instances, public requests for subdivision reports and information are not being provided. There have been situations when a freedom of information request must be submitted to the District to obtain this information. As this can take considerable time, the subdivision development application may have already been presented to Council, Council Commissions and Committees, and recommendations approved. How can this be called transparency?
Many other communities, besides charging subdivision Development Cost Charges, have developed Heritage Revitalization Agreement policy and bylaws that have included input from:
- The Heritage Commission
- The Advisory Planning Commission
- Resident Groups and Community Associations
- Interested members of the Community.
Dividing up large properties is one matter. However, assembling smaller lots into one large lot for subdivision is another. Assembling lots can provide much broader subdivision opportunity. Neighbourhood disruption and character change can lead to the disaffection of neighbours, their desire to relocate and the buying up of their properties by developers at depressed prices. This undesirable sequence is known as gentrification or “blockbusting”. Regulation is required to control or restrict “blockbusting” and Oak Bay has no existing policy in place to do this. This practice of assembling lots for a subdivision has already occurred recently in Oak Bay and may have set a precedent.
Oak Bay Watch will publish Part 2 of the January 22, 2018 Council Report: The "Reserve Fund Veil of Secrecy" on, Wednesday, February 7, 2018
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When 5% parkland dedication is required, the value of the lands being acquired by the municipality should represent, in approximate terms, 5% of the value of the entire subdivision.
3.5 Determining the Cash-in-Lieu Value
The Local Government Act permits cash-in-lieu amounts to be determined based on the average market value of all the land in the proposed subdivision. The Act specifies that the calculation of the market value should assume that the land is zoned to permit the proposed use, but that any works and services necessary to develop the subdivision have not been installed. Market values are typically established through appraisals.
Given that assessed values do not typically take into account the impact of the proposed rezoning, it may be more appropriate for the municipality to commission an appraisal by a qualified professional. In some municipalities, appraisals may be done in-house using appraisers on staff. In other communities, independent appraisers may need to be contracted.
Attachment #2
3.5 Determining the Cash-in-Lieu Value
The Local Government Act permits cash-in-lieu amounts to be determined based on the average market value of all the land in the proposed subdivision. The Act specifies that the calculation of the market value should assume that the land is zoned to permit the proposed use, but that any works and services necessary to develop the subdivision have not been installed. Market values are typically established through appraisals.
Given that assessed values do not typically take into account the impact of the proposed rezoning, it may be more appropriate for the municipality to commission an appraisal by a qualified professional. In some municipalities, appraisals may be done in-house using appraisers on staff. In other communities, independent appraisers may need to be contracted.
Attachment #2
