During Covid Times it’s interesting to walk through neighbourhood streets. Add in a bit of rain and you are guaranteed to have the sidewalk to yourself. Here, at the site of the old gas station on the north east corner of 41st Avenue and Larch there’s a long hoarding covering a chain link fence, suggesting there’s flowers and a field behind it.
But no. Here’s the sign indicating it’s represented by someone who can help you with commercial business financing.
And on the entry from Larch Street, a surprise. There’s a so-called “temporary park” on the site of the former gas station. Inside that space, there’s really no formal planting or any indication of what kind of activities are expected on top of a former gas station site.
This is not any “normal” park. This is part of a tax loophole available to developers to temporarily pay lower property taxes on land that is used for offices and retail by reclassifying it for park or community garden use. The land owner pays substantially less taxes while they work out the best deal for the land. It is an opportunity for potential temporary park or garden users, but Andy Yan, Director of the City Program at Simon Fraser University calls it something else: “We are rewarding land hoarding and subsidizing it through these community gardens. We are losing tax money to subsidize this thing that looks good—and all we’re getting in return are really expensive taxpayer-subsidized tomatoes. ”
There’s no community garden in this barren space but there is a token park bench of sorts, and it is not screwed down or affixed in any way. This is the end game of the previous gas station use where soils have to be remediated on site. There’s no internet presence for the park, no recognition of it on the business association internet site.
The change of gas station activity is documented in this thesis completed at the University of British Columbia by Alexandre Man-Bourdon on “Old Gas Stations~New Fuel for Environmental Awareness”. Man-Bourdon documents the “LUST” cleaning process~that stands for “Leaking Underground Storage Tanks”~and proposes public art and safe park space usage during remediation. One of the concepts proposed is illustrated below: a prepared park site on top of a remediated gas station site, with markers indicating the locations of other gas station sites also being repurposed.
In 2017, the City of Vancouver has fifteen commercial properties that converted from Property Tax Class 6 (office and retail) to Class 8 (temporary park or community gardens). With an assessed value of $1919.7 million, those commercial property owners paid 1.5 million dollars less by using the loophole. Last year another four properties assessed at 95.3 million dollars did the same thing, paying $300,000 less in taxes while holding the land.
Developers will argue they are doing something remarkably altruistic by allowing their land to be temporarily used for garden plots and these temporary parks. The truth is that these land holders are reaping the advantage of lower tax rates while taxpayers make up for that difference. In the interim, come and use the park bench at 41st Avenue and Larch Street.
Andy’s point taken. However, some have been truly useful. The NW corner of Burrard and Davie has been a community garden for more than a decade, and heavily used by Westenders. Then there is the embarrassment at the corner of Cardero and Georgia, where the block is slated for at least two luxury towers. The gift to the neighbourhood is a chain link fence surrounding what is now a field of three inches of gravel. It’s signed as… wait for it… a dog park! I’ll accept it may get some use, but I was there weekly, before lockdown, and never saw a dog there.
Is Vancouver getting good value for this type of zoning? Are the parks/gardens worth the loss of tax revenue? I suggest based on this article, it is not at all a good use of lost taxpayer revenues. It does suggest that the persons responsible for devising these types of initiatives do not have an appreciation of how market forces operate and is an example of how progressives completely mismanage/waste taxpayer revenues. What is missed is that the value of a commercial property is based to a large degree on potential development opportunities, if that requires different zoning (more density) then the market value discounts for the probability of success in rezoning and the time it takes to complete the process. This program simply becomes part of the property value calculation. If the cost of carrying (property taxes etc) the property is mitigated by this tax avoidance program, that becomes a value to the vendor/purchaser, increasing the selling price the purchaser is willing to pay as the carrying costs are less while holding the property. The city loses value which accrues to the vendor with a loss to the taxpayers. Discuss.
I think the intent – to make the land useful to citizens while it sits unused – is a good one. Perhaps there needs to be a more rigorous definition of what needs to be done to receive the temporary zoning – if we can have such a byzantine labyrinth of building standards codes then surely something could be worked out for this kind of land use?
There isn’t actually any temporary zoning – or even a change of zoning. Park and recreational use is included in most zones, including commercial zones where most decommissioned gas stations are located. Theoretically the City could require a permit, as the temporary use is often a conditional use in the zone, but a previous Council decided that the number of sites didn’t justify that additional step. The site would sit anyway, with no public access, behind a fence, which isn’t a particularly attractive alternative. Most sites don’t sit for very long before they get developed, although there are a few exceptions.
The benefit to the owner comes because if a park is provided the respective lots are reclassified by the BC Assessment Authority from Class 6 (Business, other) to Class 8 (Recreation), and the associated tax rate applied to the land value is reduced by about 60%. The City has no say in determining the property classification. That’s done by BC Assessment in accordance with the BC Assessment Act. Council asked for a report back on the situation just under a year ago, but it doesn’t look as if anything has come back to them yet, or at least, not in a Council meeting.
Important to remember, as I understand it, that this change of use doesn’t reduce the city’s share of taxes.
I believe it reallocates it across the commercial sector, increasing other commercial rents so the “commercial” share of the city’s tax revenues stays constant.
I think there is a much more effective solution: if a developer leaves a space empty for an extended period of time (and, yes, even for remediation of contaminated sites), double the tax rate they pay unless they allow it to be used for a community garden or other related purpose. Developers raison d’etre is to make money…and as much of it as possible. It is their nature so can’t really attack them for it. They will game the system every time if a complacent electorate allows it.