Developer David Chard stands on the future site of his latest residential project in the 800-block of Broughton St. Chard appeared before a City of Victoria committee last week to ensure the project moves forward as planned.

Cash-for-height development deal ramps up at City of Victoria

Density bonus fees controversial but commonplace in many North American municipalities

A 10-storey residential building slated for downtown Victoria is set to be the first test of a controversial city policy that developers say increases the sale price of condos.

The city’s bonus density program was created in 2011 to allow developers to build more floors than prescribed in downtown zoning, in exchange for cash.

That money is used for public realm improvements and seismic upgrading of heritage buildings, a model adopted by many modern North American cities.

But the policy doesn’t sit right with developer David Chard, who is bringing forward a proposal for a residential building in the 800-block of Broughton St., across from the downtown YMCA/YWCA.

“As a developer, we basically flow through all of our costs to the end user,” he said. “The more these costs, whether they are payments such as bonus density or permit charges, those fees are added to the cost of a unit.”

Chard has built more than 300 residential units in and around the downtown core since 2006 including the Corazon and Juliet buildings, and The Sovereign on Broughton.

Chard’s latest application is the first the city has processed since the density bonus came into full effect Jan. 1. As part of the policy, an independent economic analysis is done to calculate the contribution to city coffers as a percentage of the value of added density.

“We have no idea if we’ll stand to benefit one dollar or a million dollars,” said Coun. Pam Madoff. “I think the numbers will be extremely modest once we get the analysis back.”

Casey Edge, executive director of the Victoria Homebuilders Association, said developers have been adamantly opposed to bonus density since it was first proposed.

“All bonus density schemes do is apply a significant tax on development without the municipality taking the risk,” said Edge, whose association advocates on behalf of about 100 developers in the Capital Region.

“The City of Victoria, aside from bonus density, has the worst reputation in the region for development processes. It’s also the most costly place to do business,” he said.

Madoff acknowledged city hall has been slow to demonstrate “surety” in its dealings with developers in the past. But she said bonus density provides “a quantifiable, predictable” fee for new developments, instead of on-the-fly amenity dealings at the council table.

“Overarching this all is the importance for council to let these applications go through and see what the costs will be,” she said. “The policy was adopted for very good reasons.”

Chard’s development application for Broughton Street will be sent for public consultation later this year. In the meantime, he’ll wait to see how much he owes for the extra storeys on his residential plans.

“There is so much discussion in the city on housing affordability. And this (bonus density policy), in my opinion, goes counter to that,” he said.


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