Mayor's Council Proposal for Funding TransitThe following article appeared in the December issue of Business in Vancouver newspaper
Those who benefit from transit funding should pay for it.
In a recent BIV article “Province’s civic tax grab is a threat to local land use authority” (November 1-7, 2016 Pg 18), the author appeared to suggest that if there was increased density along the transit lines in the City of Vancouver, with resulting Development Cost Charges (DCC) used to pay for Transit, the Province was taking money that rightfully belonged to the City. Is it not reasonable that those who benefit from Transit pay for it?
In March 2015, the Mayor’s Council produced a document entitled “Regional Transportation Investments, a vision for Metro Vancouver”, which offered a solution for the region moving forward. The report discussed several proposed schemes including a Broadway transit line and funding options.
In October 2016, the Council produced a document entitled “New regional development fee backgrounder”, which outlined the Council’s proposal to introduce a new regional fee on urban development in Metro Vancouver by 2020 to help offset the capital costs of regional transportation infrastructure.
Potential revenues will depend heavily on where the charge is levied, which types of development would pay, and the rate. There are various options: a low region-wide rate; a higher rate around more intensive transit investments; or, a hybrid of the two. Specific rates will be determined in consultation with stakeholders.
In fact the concept of municipalities funding infrastructure through up-zoning has been in place for many years. The current funding suggestion comes from the Mayor’s Council, not the Province.
In Richmond, BC Transit worked with the City to fund the Capstan station on #3 Road, Richmond, by allowing increased density (additional units) for a fee, which paid for the station. Initially if the density was 2 FSR, the developer could obtain 0.5 extra density if he paid a fee of $7,800 for each unit in the development.
The City of Vancouver has a process in place for sharing in the value increase when a site is up-zoned. 70-80% of the value increase goes to the City. In some areas such as South East False Creek or Cambie Corridor, an amount is set in advance and applied to the GBA of the development. This is referred to as CAC (Community Amenity Charges). This goes to fund civic facilities such as daycares, libraries, and infrastructure.
Transit is infrastructure. Any funds raised will benefit the City and its population.
Up-zoning of the Broadway transit corridor will provide those funds. With increasing office development Downtown and on West Broadway, proximity to work is preferred by many with ease of accessibility. A panel of office leasing experts at the recent “Real Estate Leasing Forum” unanimously stated that companies need to be Downtown and few flee to the suburbs. Their employees need housing at an affordable level, close to work. Hours of productivity and leisure are lost by the need to commute.
The fee for up-zoning would normally go to the City for community projects. Indirectly it still would as Transit is infrastructure. Fees from increased development at Transit stations is no loss to the City as it was not necessarily planned. The fees will benefit Vancouver citizens and ease congestion on Vancouver streets. Local businesses will see growth to offset increasing property taxes. The City will benefit from significant extra revenue in property taxes.
It is a win – win situation for all. It seems totally logical that funds from increased density should go to fund the Transit which benefits the City in many ways. The proposed DCC levy has been put forward by the Mayors’ Council as the best available method of financing. The Mayor of Vancouver sits on that council. There is no civic grab by the Province. The transit will be paid for from fees received by the municipality that benefits, not from taxpayers in general.
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