ADMINISTRATIVE REPORT

Supports Item No. 5 P&E Committee Agenda June 10, 2010

Report Date: May 25, 2010 Contact: Dennis Carr Contact No.: 604.873.7207 RTS No.: 08211 VanRIMS No.: 08-2000-20 Meeting Date: June 10, 2010 TO: Standing Committee of Council on Planning and Development

FROM: Managing Director of Social Development, in conjunction with the Director of Legal Services

SUBJECT: Housing Agreement for 5498 Fraser Street (Related to the Replacement of Rental Units at 798 East 29th Avenue)

RECOMMENDATION

A. That Council approve entering into a Housing Agreement with 709 Homes Ltd. (Ledingham McAllister), the owners of 5498 Fraser Street (PID 014-288-591; Lot 6 of Block 6, DL 667, Plan 1797), pursuant to the Rental Housing Stock Official Development Plan, to secure 48 rental units, for 60 years or the life of the building, whichever is greater, on the terms and conditions set out in this report and subject to the satisfaction of the Director of Legal Services and Managing Director of Social Development;

B. THAT the Director of Legal Services be instructed to bring forward a by-law to

enter into the Housing Agreement; and

C. THAT no legal rights or obligations will arise or be created from the approval of Recommendations A and B until the Housing Agreement as authorized by by-law is fully executed on terms and conditions to the satisfaction of the City’s Director of Legal Services.

GENERAL MANAGER'S COMMENTS

The General Manager of Community Services RECOMMENDS approval of A, B and C. COUNCIL POLICY

On May 15, 2007, Council adopted the Rental Housing Stock Official Development Plan (the “Rental Housing Stock ODP” or the “Rate of Change ODP”), which sets out revised policies and regulations pertaining to the protection of rental housing in existing apartment areas and areas of the city zoned CD-1. These regulations require that the owner of a property replace,

Housing Agreement for 5498 Fraser Street 2

on a one-for-one basis, existing rental housing, where a development of 6 or more dwelling units is proposed. Alternative approaches consistent with the Official Development Plan may be proposed. On October 28, 2008, Council approved recommendations related to the report entitled “Rental Housing Strategy: Process and Consultancies”. In March 2009, Council received a report from the Director of Planning regarding the demolition of 89 units at 4550 Fraser Street. Council passed a resolution instructing the Director of Planning to amend section 10.12 of the Zoning and Development By-law to extend to commercial zones the requirement that a development permit be issued and a building permit be issuable before issuance of a demolition permit for rental housing. On July 21, 2009, Council approved a revised form of development for the CD-1 zoned site known as 798 East 29th Avenue. SUMMARY

Ledingham McAllister has filed development applications for three interrelated sites, shown on the map on the following page: 4550 Fraser Street, zoned C-2 Commercial (Site A on map); 798 East 29th Avenue (formerly 4545 Prince Albert Street), zoned CD-1 Comprehensive

Development (Site B on map); 5498 Fraser Street, zoned C-2 Commercial (site C on map).

As the site at 798 East 29th Avenue is zoned CD-1, it is subject to the Rental Housing Stock ODP adopted by Council in 2007, which requires replacement of the existing rental housing. The applicant for the development permit for the 798 East 29th Avenue site proposes to locate the 48 replacement rental units off site on the 5498 Fraser Street site. The Managing Director of Social Development recommends approval of the proposal, as it meets the intent of the Rental Housing Stock ODP, subject to the owner of the 5498 Fraser Street site entering into the required Housing Agreement, to secure the 48 rental units for 60 years or the life of the building, whichever is greater. PURPOSE

The report seeks Council authority to enter into a Housing Agreement for 48 rental units at 5498 Fraser Street, which are replacement rental units for the 48 rental units which have been demolished at 798 East 29th Avenue.

Housing Agreement for 5498 Fraser Street 3

Sites at 798 East 29th Avenue (Site A) & 4550 Fraser Street (Site B)

500-600 E 29TH AVE 29TH AV

700 E 29TH AV700 E 29TH AV700 E 29TH AV700 E 29TH AV

500-600 E 30TH AVE 30TH AV700 E 30TH AV

800 E 30TH AV 800 E 30TH AV

700 E 30TH AV700 E 30TH AV

4600

FRA

SER

ST44

00 F

R AS E

R ST

4 400

FRA

S ER

S T4 5

00 F

RAS E

R S T

4 50 0

PR I

N CE

A LB E

R T S

T44

00 P

RINC

E AL

BERT

ST

4500

PR I

N CE

A LB E

RT S

T4 5

0 0 P

R IN C

E A L

B ER T

ST

4463

4504

4514

4596

4426

4435

710

735

728 750

4544

4554

4564

4647

4471

719

766

779

4520

4524

4586

4579

4460

738

744 788

749

4449

4462

4470

4488

4545

4552

4552

4572

4571

4605

4438

4459

4549

720

860

4585

4485

4513

727

736

745

758

765

772

791

757 765

4435

4477

4617

4447

4553

4561

735

750

757

691

707

741

808 844

4452

4493

4534

4

4620

4517

728 780

727 773

758 766 8344421

4508

4582

4629

4488

4525

687

771

719

736

A B

Site at 5498 Fraser Street (at 39th Avenue) (Site C)

5500

- 560

0 C H

E ST E

R ST

700 E 38TH AV 700 E 38TH AV

700 E 39TH AV 700 E 39TH AV 700 E 39TH AV 700 E 39TH AV

5400

FR A

S ER

S T55

00-5

6 00

F RA S

E R S

T53

00 F

R AS E

R S T

727

790

5390

5454

5454

5454

5454

5498

5498

5498

5498

728

743 757

758 780

5538

785

728

765 771

5508

5518

55245550

5550

720

765 779757

772

779

736

743

744

775

749

735

719

736 744 766

787

5541

5506

5506

719 727 749

716

735

750

C

Housing Agreement for 5498 Fraser Street 4

BACKGROUND

Properties at 4550 Fraser Street and 798 East 29th Avenue have been under the same ownership for many years. In March 2009, Council received a report on the demolition of 89 rental units at 4550 Fraser Street (which is zoned C-2 Commercial), to be replaced with 213 strata title units. Council heard from 21 delegations, however, staff advised that the City had no authority to withhold the demolition permit because the site was zoned C-2 Commercial. In 2007, Council had decided that “C” commercial zoning districts of the city would not be included in the Rate of Change policy. In March 2009, the applicant had indicated an intent to replace the 48 rental units at 798 E. 29th Avenue (4 studio apartments, 28 1-bedroom units and 16 2-bedroom units) on the adjoining site at 4550 Fraser Street. Since that time, buildings on both the site at 4550 Fraser Street and the adjoining property at 798 East 29th Avenue have been cleared. Council approved the form of development for 798 East 29th Avenue in July 2009, noting that the issuance of the subject development permit would be conditional on satisfactory resolution of replacement of the rental housing, which is the subject of this report. In the July 2009 report, Council was advised that the buildings at 798 East 29th Avenue were vacant as tenants had voluntarily left through agreement with the owners, and demolition would occur shortly under order of the Chief Building Official because of the vacant state of the property. All buildings were demolished in the fall of 2009. The development permit for 798 East 29th Avenue has been approved, subject to a number of conditions, including that 48 units be replaced and designated as rental units, with arrangements to be made to the satisfaction of the Director of Planning, the Director of Legal Services and the Managing Director of Social Development. For the better part of 2009, it was the applicant’s intent to locate the replacement rental units on the adjoining site at 4550 Fraser Street. Part way through 2009, the applicant indicated at interest in locating the replacement rental units on an alternate site at 5498 Fraser Street, at 39th Avenue. DISCUSSION

Alternate Location for Replacement Units: The regulations for Rate of Change contained in standard zoning district schedules, such as RM-4, state that:

(where development requires the demolition of one or more rental housing units) …the registered owner agrees with the city to…include in the new development on the site that number of rental housing units which equals or exceeds the number of rental housing units requiring demolition…or …provide rental housing units, or to contribute to the provision of rental housing units, in another manner or at another location or to provide another form of affordable housing and to give the city security for the continued operation of such replacement rental housing units…including a section 219 covenant for registration against title to the subject real property, which housing agreement and security must be on terms and conditions satisfactory to Council.

The respective CD-1 by-laws have not been amended to include these respective regulatory clauses; however, City Council did include CD-1s in the Rate of Change policy instituted in May 2007. Staff believe that CD-1s sites should be governed in the same manner as RM apartment-

Housing Agreement for 5498 Fraser Street 5

zoned sites, where the above wording contemplates the provision of replacement housing at another location. Staff have no reason to oppose the present proposal. Rate of Change Considerations: One of the main questions at issue with the applicant related to the term or length of the Housing Agreement. The applicant believes that the 60 years or the life of the building is onerous. The present wording for the Rate of Change ODP and the companion zoning regulations is silent regarding the length of term for Housing Agreements. In crafting the ODP and the zoning regulations, the intent was always that permanent rental units be replaced with the same - rental units secured for the “life of the building”, and not rental units with an underlay of strata ownership on a shorter term than the life of the building. Any other interpretation would, in the opinion of the Managing Director of Social Development, seriously undermine the ROC policy and its intent. In May 2007 when ROC was implemented, hundreds of rental housing units were in the process of being demolished. ROC was, and is intended, to reduce the loss of rental housing while the major rental study was undertaken, now contemplated for completion in mid-2010. A number of applications involving Rate of Change have proceeded accepting that the replacement units are to be secured for the life of the building, although these applications have involved one or two replacement units (one case involving 6 units). The “life of building” term for housing agreements has been set as the standard for all applications being processed through the STIR program (Short Term Incentives for Rental). Terms of the Housing Agreement: Section 565.2 of the Vancouver Charter provides that Council may, by by-law, enter into a Housing Agreement that will provide for the use of these units as rental accommodation. The terms of this Housing Agreement are to be as follows: 48 units at 5498 Fraser Street are to be restricted to rental for 60 years or the life of the

building, whichever is greater; and the applicant may stratify the building, however, the following possible structures will

apply:

• each strata lot will be made up of 8 rental units; or • units will be linked by a no separate sales covenant in blocks of 8 units; or • the applicant may subdivide by air space plan provided that the 48 rental units must

be in one air space parcel and may not be further subdivided. This application will proceed with the City’s housing interest, secured by a Housing Agreement, including a Section 219 Covenant registered on title to the property. FINANCIAL IMPLICATIONS

There are no financial implications.

Housing Agreement for 5498 Fraser Street 6

CONCLUSION

The proposed Housing Agreement presents the opportunity to secure 48 rental units for the greater of 60 years or the life of the building. This is consistent with Council’s objective under the Rate of Change ODP to provide for the replacement of existing rental, while the rental study is underway. It is recommended that Council approve the Housing Agreement in accordance with the terms outlined in this report, and instruct the Director of Legal Services to bring forward a by-law to enter into the Housing Agreement.

* * * * *