If it's not viable, who will be liable?

To Oak Bay Planning Dept., Mayor and Council Copy Acting Chief Administrative Office

13 March 2019

Re: OBUC project ZON00034, DP000022

No Viability, just Liability

The dictionary defines viability, in the commercial sense, as the ability of a business product or service to make a profit.  This is certainly the definition intended when used by this  developer as the principal purpose of their project is to make enough money/profit  to keep the church going for the next hundred years. This amount has never been disclosed.  

The first time ‘viability’ appears is March 2017 when the church’s website describes meeting with BC Housing with ‘a financial model to estimate potential viability and risk to satisfy the church board and shown to BC Housing to secure a project planning loan’.  Our Freedom of information reports had the dollar amount to ensure viability redacted.    Viability (or amount of profit the developer needs to make) initially required a building  of 269 affordable units in a 6-storey L shaped tower, for BC Housing’s application for funding.  OK, said BC Housing.  The District of Oak Bay Planning staff  also were apparently “supportive of this project and the proposed development met the objectives of the local Planning Department” – again from a Freedom of information report obtained by neighbours .

From the beginning the terms ‘viability’ and ‘affordable housing’ went hand-in-hand, but with ever-changing definitions.  By March 2018 the 269 units of affordable housing morphed into 123 units of affordable housing and 14 market units.  By May 2018, there were 50 units of affordable housing and 46 market and long-term lease units.   Between March and May 2018, the name of the development changed from “Affordable Housing Project” to Neighbourhood Housing Initiative – with the word affordable no longer part of the description.

In an October 2018 submission to a Request for Proposals by the  BC Community Housing Fund, the developer applied for a grant based on using revenues from market units to subsidize the affordable units. The developer stated in this submission (available through FOI request 30-11318). “if grant support is not obtained or planning costs rise more units may have to be switched into being market units to safeguard breakeven.”  Also that “certain terms of the RFP conflict with the high cost of development in Oak Bay such that the level of grants and rental stipulations would prevent achieving breakeven”

In conclusion, the developer states “Due to the high cost of building in Oak Bay we unfortunately cannot meet the rental level requirements of the RFP since they would render the project unviable”.

Before proceeding further with the developer’s Rezoning Application, might I suggest that the Planning Department, Councillors and Mayor request confirmation of what the affordable rents for this project will be.  Based on the apparently new information that there is a “high cost of building in Oak Bay” and that “more units may have to be switched into being market units to safeguard breakeven” it seems that this could turn out to be a non-affordable development.

Photo from Pexel - photographer Juhasz Imre

Photo from Pexel - photographer Juhasz Imre

Thank you.  

B. Judson