Vancouver city council has approved a policy to generate thousands of new hotel rooms.
On Tuesday, councillors heard from senior planners, who presented a report outlining an urgent need to create 10,000 hotel rooms by 2050.
The report, titled, ‘Hotel Development Policy Update,’ said that if the city reaches this goal, it could generate billions of dollars in economic impacts.
Matt Burke, a senior city planner, said there’s strong interest from both developers and operators in expanding the quantity and variety of hotel options in the city.
Despite that demand, he said, there are some challenges.
“In particular, securing financing for new projects is difficult in the current environment,” he said.
CAC amendment
ABC Coun. Sarah Kirby-Yung tabled an amendment she believes will resolve part of this issue.
Kirby-Yung’s amendment addresses CAC’s or Community Amenity Contributions.
CAC’s are in-kind or cash contributions provided by property developers when city council grants development rights through rezoning.
Under Kirby-Yung’s amendment, rezoning applications for hotels will see certain uses such as meeting rooms, conference facilities, guest recreational spaces and back of house space required for hotel operations, “excluded from floor space calculations for the purpose of determining community amenity contribution expectations from the hotel component of the development.”
Kirby-Yung said the purpose is to treat hotels similarly to how the city treats residential rental buildings, where it does not charge amenity charges on common areas.
“So on things like fitness centers or rooftop gardens, or things that are for public use, but they’re not sort of revenue generating,” she said.
‘Critical dollars’
The amendment received pushback from opposition councillors like Rebecca Bligh, who sits as an Independent.
Bligh said, a CAC is one of the few ways the city has to raise revenue to pay for amenities.
She said private hotels should be charged a CAC under the current policy.
“We’re basically negotiating the city out of critical dollars that we need in order to continue to build and grow our city,” she said.
Bligh raised the concern with planning staff at Tuesday’s meeting, asking them if it was a slippery slope and whether it could prompt similar requests in other types of developments.
Chris Robertson, the director of city-wide regional planning, responded, saying staff’s advice “is that there is some risk here.”
Asked about the pushback, Kirby-Yung said, she was well aware of the challenges given her experience in the hospitality industry.
“I understand that’s a lot for councillors to digest, but this is clearly something that we heard from the sector that would really help to deliver, particularly, things, like the full-service hotels and the larger conference hotels, that it’s really challenging to find enough real estate or financially to make them work.”
Millions in tax revenue
At Tuesday’s council meeting, Royce Chwin, the president of Destination Vancouver spoke in support of the report, saying new hotel supply could deliver more than 5,400 direct hospitality jobs, up to 8,000 indirect jobs and more than $200 million in annual tax revenue.
“Tourism is fundamentally about people.” he said. “Hotels provide long-term, stable employment.”
