Wednesday, 6 June 2012


Should Cities be able to sell zoning?  I am not speaking of fees charged by Cities to pay for the cost of the application or development cost charges paid for the burdens created by developments.  I refer to a deal whereby politicians on Council decide to change zoning in consideration of a payment to City Hall either that they have demanded from a land owner,  or that has been voluntarily paid to them by one owner for the right to violate the existing zoning bylaw.

The Courts have held that unless the Provincial Government expressly empowers them to do so Cities cannot sell zoning. 

The reason gets down to simple morality.  Zoning bylaws are the rules by which a community agrees to live. They are a neighborhood pact.  Zoning seeks to minimize the adverse impacts of various land uses on each other.  The zoning paradigm may shift from time to time.  The public may decide that environmental rather than aesthetic considerations are paramount.  Whatever the rules,  people are to be treated equally within a zone. 

Payment for zoning is morally corrupt not because politicians are pocketing any money,  but because it treats people who are in the same zone unequally based on their ability to buy their way out.  It places burdens on those who relied on the zoning in exchange for money paid to the City. 

The City of Vancouver is hooked on selling zoning.  It does it all the time.  As a  condition of the rezoning, it demands cash or amenity contributions.  The cash  can be used off site.  It is explained on Vancouver’s Web page:

It is allowed under the Vancouver Charter. It is also perverse.

Consider the West End for example.  The City spot zones land first.  That is it exempts the developer from the rules upon which the other existing renters or condo purchasers in the area have relied.  The City knows that there will be an increase in the value of the land if the density increases or if special uses are allowed.  Therefore, it keeps for itself  the value of most of the lift as an amenity contribution.  The Developer keeps the rest.

The City does the accounting and it is not easy to find where the money really goes.  Let’s  assume for now  that it puts all of the money in a new West End theatre.  The people who are really paying for it are the ones who are adversely affected by the change of zoning. They are the ones whose values drop as a result of their blocked views or increased traffic or shortage of parking spaces.

Low density areas face exactly the same problem.  Most neighborhood  plans and zoning call for development on arterials.  That is where it should be for planning reasons.  The Catch 22 is that if the arterials are already zoned for commercial or high density use the City cannot extract more money for the charges.  

It is in the interest of developers and the city to accumulate land in the low density areas.  (Who pays retail when you can buy wholesale?) They can do this by the familiar method of block busting.  They  acquire options at an option price that makes the owner want to leave the neighborhood.  Instead of paying retail for the already zoned higher density land, they pay a little over the lower single family value.  Then, when the land is accumulated, they can ask for a spot zoning of increased density.  The City gets most of the lift in value and the developer gets the rest. 

As to the neighbours, the familiar maxim applies:  If you want fairness go to a whorehouse, if you want to get fucked go to City Hall.

So where does this leave us?  Residents of the West End can be expected to go to City Hall and beg them to respect the existing Official Community Plan and Zoning bylaw.  Isn’t that glorious!   If past is prologue, the land will be rezoned no matter what they say.

A modest proposal that respects Equality Rights

So what to do?    Residents could of course occupy City Hall. All the world hates a whiner though so I have a more practical solution that doesn’t involve trespass.  The West End Enders should hold a series of bake sales, concerts and other fund raising events.  They should raise enough money to at least get an auction going with the developers to buy off the Council.  They would figure out how much the lift in value for the spot zoning will be, determine how much of that will go to the City,  and then offer the City money to simply leave them alone. The City would get paid either way.  Now, the City might say that they already get higher taxes from the rezoning,  so they should get even more money from the residents.  The beauty part is that under my proposal everything goes.

There are still moral objections to this approach but, happily, neither City Hall nor the developers are in any position to raise them.

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