Industrial land and housing development in Delta was the centrepiece of this year’s mayor’s economic breakfast.
The annual event brings together local and regional business and community leaders for a series of presentations about Delta’s economic relationship with the region, the province and Canada.
Welcoming dozens of Delta’s business and community leaders, including MP Carla Qualtrough, Mayor George Harvie said his priority continues to be a quick and “effective solution” to the replacement of the George Massey Tunnel, adding he has been conferring with the mayors of Surrey, Richmond and White Rock, as well as the City of Vancouver and the chiefs of the Tsawwassen and Musqueam First Nations.
“We’re all trying to agree on parameters on a solution that would serve the needs of the region until at least 2100,” Harvie told the crowd. “And I am an agnostic to whatever solutions come up, [so long as] all the crossing options are considered — including a deep-bore tunnel — provided that the solution responds to the concerns of all stakeholders and meets the consensus parameters, which includes the capacity for transit and cycling, and pedestrians.”
The mayor said he received a “positive response” from the federal government about the project during his recent trip to Ottawa, and that a new projected completion date of 2030 as a result of additional impact reviews for the new project is not acceptable.
“Prior to construction beginning, many items would have to be addressed after the business case is complete [in fall of 2020], including the identification of a budget and funding source, an environmental assessment, a reference concept, and a bidding and selection process,” the mayor told the Reporter in an emailed statement, explaining why it may take up to a decade to complete the project.
The mayor also touched on housing during the economic breakfast, saying the city is working on reducing timelines to process and complete development projects in order to keep families and seniors in the city. He highlighted the renewal of the city’s secondary suite program which is intended to make it easier for Deltans to find “safe rental options.”
“I am pleased with our work so far, but we have a lot more to do to achieve the results the community needs,” Harvie said. “I encourage everyone here — you are decision makers in the community — to look for ways to support these programs.”
Wesgroup executive vice president for development, Beau Jarvis, got everyone’s attention with his energetic presentation about where commercial and residential land development in the Metro Vancouver area is potentially going.
Jarvis told the audience in the ball room of the Tsawwassen Springs golf clubhouse that as B.C.’s economy is projected to stay in good shape, the industrial land vacancy rate in the region is nearing the residential rate and “nobody gives a s--t.”
He used 2015 Metro Vancouver data to argue that occupancy rates for commercial spaces are in the high 9os and that developers, such as Wesgroup, are essentially running out of land because they have been steadily developing both residential and commercial land since the data came out.
The numbers suggest that Vancouver’s industrial land reserve was 97 per cent built out, while the North Shore was 93 per cent developed, and in Burnaby, the number was 95 per cent. Delta, by contrast, was much lower with only 80 per cent of the city’s industrial land developed.
“The one major crisis that barely shows up on the radar of the media, policy makers and politicians is the industrial land crisis,” Jarvis said, adding that lease rates for commercials spaces are also going up as supply is not able to keep up with demand.
“As for lease rates, we’re in the double digits. So it’s also worth discussing the rise of strata development of industrial land. Several developers are buying land for the purposes of building strata industrial and this has put increased pressure on land values.”
He said regional businesses should be concerned about higher lease rates because the firms that can afford the current rates are multinational companies. Jarvis suggested because there is virtually no land in Metro Vancouver to build new industrial areas, regional governments, developers and the province “need to have a healthy conversation about the [Agricultural Land Reserve],” admitting that it was a touchy subject.
“There is land in that community that I grew up in that should not be in the ALR,” Jarvis said. “It will never be farmed for various reasons, including ecology and economics. I am in no way saying rip up all the farms and build warehouses. I am saying let’s talk about it.”
He also said that Delta is on the map as a destination for industry — hosting the likes of Amazon, which has a warehouse on Annacis Island, as well as the B.C. Liquor Distribution Branch and BMW — thanks to the port and the South Fraser Perimeter Road.
”Delta has proven to be a good place to do business,” he said.
In terms of residential costs and the high rents throughout the region, Jarvis argued that policy decisions aimed to keep costs for renters and homebuyers low do not take all factors in to account. He also said that there are divisive politics in the provincial government resulting in “not enough collaboration between industry and government,” singling out the recent NDP policy to cap annual rent increases at the rate of inflation. He wondered how it made sense that taxes on some properties have gone up “five times the amount of the [Rental Tenancy Act] increase,” asking how business can function with capped revenues but increasing expenses.
“As a result of the headlines, pressure is being placed on politicians to interfere with the natural market forces. There is a crisis and politicians must act, there’s no question,” Jarvis said.
“More recently, there have been several soundbites in the news about $2,000 rents for one-bedroom [apartments] in Vancouver in the context of [the city’s] rental incentive program. Everyone was freaking out about the suggestion that $2,000 a month for a one-bedroom and how that’s part of the housing affordability continuum.
“However, nobody is talking about the cost of land of that development, nobody is talking about the hard costs, the soft costs, the financing, or the fact the city wants to build frickin’ Passive House and they want 182 bicycle parking stalls with a dedicated elevator.”
(Editor’s note: according to the City of Vancouver’s website, Passive House is a certification that a project “meets all of the requirements of the Passive House standard” and “confirms that the building has been designed to achieve high levels of occupant comfort and energy performance.” It is based on standards set our by the Passive House Institute in Germany.)
In last October’s municipal elections, Jarvis said, some candidates ran and won on “anti-developer” stances in their platform, which is concerning to companies like Wesgroup.
“These councillors are acting in a way that is diminishing certainty and, in some cases, completely shattering the confidence of developers, builders and landowners,” he said.
Jarvis told the Reporter there is a multitude of factors that influence the ultimate rental or sales price of an apartment, but that municipal, provincial and federal taxes and costs associated with development can make up to 30 per cent of the final price of a home in some cases. He agreed that prices are expensive, but cited market forces as the reason for them.
“In the city of Vancouver, not including land costs, it’s still — from hard cost and soft cost perspective on average for a 1,000-square-foot unit — it costs $750,000 to build,” Jarvis said.
“That is, if the land is free and I, as the developer, was not even taking any profit. That’s not affordable, really. Whether it’s fair or not is not really the question. [Instead], how do we get those costs down? How do we build quicker? How do we make it more efficient to make the ultimate price of rent or ownership [lower]?”
sasha.lakic@northdeltareporter.com
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