Earlier this week, Mr. Justice McEwan of the British Columbia Supreme Court released his decision in the case of Community Association of New Yaletown v. Vancouver (City), a case involving a rezoning application, a public hearing, and a land swap deal between the City of Vancouver and Brenhill Developments.
The result of the case is striking: two bylaws quashed, a development permit revoked, and new public hearings ordered. On the ground, there is an active construction site that no longer has a valid development permit, and as for the agreement between Brenhill and the City? That’s a separate (and probably even more complicated) topic for another day.
You can find the text of the full decision here.
Even though it has only been 3 days since the decision was released, there has already been a lot of discussion about this decision and the effect it will have on future deals that municipalities make with developers, and on the rezoning process generally.
The decision is lengthy, and there are a lot of factual details that are important to the outcome. I think the key to the decision can be found in paragraph 129:
…Rather, given Council’s undoubtedly extensive powers to pass by-laws, the public should be given an opportunity to make the fullest submissions possible.
There are variations of this idea throughout the judgment. It’s clear from the result that the court was very concerned about transparency and fairness in the City’s process. McEwan J. makes it clear that the City could have (and probably should have) given the public more (and better) information about the underlying land swap deal in advance of the public hearing on the rezoning application. It also seems clear that the City could have (and, again, probably should have) been more transparent about the amendment to s. 3.13 of the Downtown Official Development Plan and how it affected the development of the new Jubilee House at 1099 Richards Street.
McEwan J.’s point is plain: the residents of a municipality should not be forced to stand back and “observe” while the municipality redevelops the neighbourhoods in which they live – the residents are stakeholders in the process, and they are entitled to participate in the process in a meaningful way.
As a general statement, I’m in favour of people having more information about the workings of the municipality they live in, especially if it allows them to become more engaged in how the community around them develops and changes over time.
But as someone who has spent a lot of time working with both developers and municipalities on rezoning issues, land deals, and the public hearings associated with them, there are some things about the decision that concern me. McEwan J. seems to be suggesting that when the City convenes a public hearing to discuss a rezoning application, it is fair game for the public to review and scrutinize the underlying land transaction that preceded the rezoning application. At paragraph 118, McEwan J. says this:
…Residents of the City have a right to a voice in integrated projects of this kind, and a right to a fair opportunity to express themselves relative to the overall advantages and disadvantages of the proposal. They have the right to make submissions on whether, at the end of the day, the City simply gets what it has and Brenhill gets a tower, to the overall detriment of the neighbourhood, or whether, in fact, the arrangement is a good deal, enhancing the City’s social housing and low cost housing goals at minimal cost to those nearby. (my emphasis)
It is important to keep in mind the purpose of the public hearing in this case – to allow the public to obtain further information and make submissions in relation to whether (and how) they would be affected by the proposed rezoning.
I agree that as part of that process, the public is entitled to know and scrutinize the “Community Amenity Contributions”, or CACs, proposed by the developer as part of the rezoning application. CACs are intended to balance out the financial gain to the developer from a rezoning by securing things that the municipality considers to be a public benefit.
The City’s failure to provide clear and reliable information on the value of the CACs was clearly a significant issue for the court. In addition to the benefit of getting new rental housing stock at 508 Helmcken, the City said in its policy report that getting the new building at 1099 Richards at essentially no cost was a benefit worth $24 million dollars – based on the construction cost of the new building. The problem for the court was that it wasn’t clear at all where that number came from. At paragraph 122, McEwan J. says:
The process was also flawed in my view by presenting dollar values for the components of the land exchange that cannot be evaluated: it is impossible to tell whether the numbers have a real-world justification or are simply used to set up an offset that the proponents have chosen, to give the appearance of adequate consideration. In light of the scale of the zoning change and the trade-off of existing amenities for social housing, these things are more than just the City doing its “business.”
While the City may have good reasons to keep some of the transaction data confidential, the real impact of a rezoning can’t be evaluated if residents don’t know how much value is being given by the City to the developer (through the rezoning) and how much value is being recovered through CACs.
If McEwan J.’s comments at paragraphs 118 and 122 are limited to the question of valuing the CACs, then that is consistent with the purpose of a public hearing in relation to a rezoning application. With good information, residents can consider for themselves how the CAC value was calculated by the City, and then make submissions on whether, overall, they believe the rezoning benefits the neighbourhood or not.
But if the court is actually saying that a public hearing in relation to a rezoning application is an appropriate forum for residents to criticize the City’s underlying decision to do a land swap with a developer (or any other type of business deal that leads to a rezoning application), then the implication is that the City’s business judgment is now part of the analysis of how land use should be regulated.
If that is what emerges from this decision, then I think the court may have gone a step too far. It is one thing to suggest that the CACs offered by the developer don’t provide enough benefit to the City in exchange for the rezoning – in my mind, that is a valid land use planning issue, and something to be discussed and debated both at the public hearing and subsequently by council prior to voting on the rezoning bylaw. It is something else entirely to say that a a certain land use should not be allowed, or that a building should not be built to a certain height or size because the City ought not to have transferred the property to the developer in the first place.