Regulatory Tools for Managing Growth and Fostering Development

A number of financial and regulatory tools exist that local governments can use to support downtown revitalisation and influence the type and location of urban growth.  The general aim of each tool is to provide some kind of financial incentive for developers to invest in capital projects, which might be either new construction of residential or commercial buildings or capital improvements.  The benefits of these programs can include attracting new businesses, directing growth in specific locations, or improving the aesthetics of a downtown area, among other things.  In addition to the range of tools available, there exist a range of considerations to be made regarding how each tool is implemented.  These considerations include types of developments, amount and length of exemption, and geographic area, among other factors.

Zoning (property rights)

• Development Permit Areas are area-specific development regulations that may be used to achieve a variety of desirable objectives, including (but not limited to) aesthetic form and character, energy-efficient building codes, and buffering for ecologically-sensitive areas.
  [Designation of development permit areas LGA 14(7) s.488]
• Density bonussing may serve as a development incentive to support higher density and infill development where developers are permitted to exceed maximum residential densities outlined in the Zoning Bylaw in exchange for providing some valued amenity (e.g., greenspace).
  [Density benefits for amenities, affordable housing and special needs housing LGA 14(5) s.482

Approval process

• Streamlined Development Approvals allow current planning to prioritise development proposals that are located in the downtown core.
• Permissive zoning may allow for increased innovation, mixed-use development, and more flexibility for development applications.  Alternatively, restrictive zoning establishes a limited range of uses within a central business district.  Such limited uses may serve as a disincentive to developers who do not fit within the set of restricted uses and wish to avoid expensive and time-consuming variance or re-zoning applications.

Financial incentives and charges

• Revitalisation Tax Exemptions (RTEs) are designed to provide financial incentives to property owners by alleviating a component of the tax burden associated with redevelopment.  Property owners receive a tax exemption on the increase in total assessed value for redeveloped buildings on their property.  RTEs are usually associated with a minimum redevelopment cost where property owners are only exempt within a predetermined time frame.
  [Revitalization tax exemptions CC 7(7) s.226]
  • BC Government – Municipal revitalization tax exemptions

• Development Cost Charges (DCCs) all are a source of revenue for local governments.  When an application for building permit or subdivision is approved, DCCs must be paid to local governments for providing public services to the new developments.  DCCs are calculated based upon a city’s Capital Expenditure Program, which details infrastructure costs related to transportation, trails, water/sewerage, electricity, and parks. 
  [Development Costs Recovery LGA 14]
  • BC Government – Development cost charges
  • BC Government – Development Cost Charge Best Practices Guide (PDF)
• Community amenity contributions

As part of a rezoning process initiated by a developer, community amenity contributions (CACs) are negotiated between the developer and local government.  As the name infers, these contributions support public amenities, such as affordable housing, libraries, and fire halls, as well as financial contributions towards amenities.  The contribution is provided by the developer to the local government.  CACs are voluntary because, unlike DCCs, they are not enabled through provincial legislation; CACs are created by a local government’s discretionary power for zoning.

• • BC Government – Community Amenity Contributions: Balancing Community Planning, Public Benefits and Housing Affordability Guide (PDF)
• Tax Increment Financing (TIF) is a tool that allows a municipality to initiate revitalisation efforts in a blighted area in order to attract subsequent redevelopment.  Under TIF, a municipality may: (1) designate a TIF zone; and (2) calculate a loan based upon the estimated increase in property values (tax increment) occurring as a result of a public work.  TIFs have been used to finance brownfield remediation, road construction, and city beautification efforts.
  [not available in British Columbia; used in Alberta and Manitoba]

A combination of regulatory and financial tools are used as part of a broader strategies for downtown revitalisation, growth management, and economic development.  Regulatory and financial tools can be designed and applied in conjunction with statutory plans, zoning by-laws, and building codes to achieve different land use strategies, such as the following.

Nodes and Corridors Strategy

This growth management strategy combines two priority patterns of land use:

Nodes:  focussed, higher-density, and mixed-use centres, such as downtown areas, transit hubs, high-density housing, and high-use destinations.

Corridors:  linear connections among nodes based on transportation routes that support concentrated, and predominantly retail, development; can employ primary and secondary corridors.

Transit-Oriented Development

As the name implies, one land use strategy is to focus development in close proximity to a transit node (e.g., train or light rail station, high-use bus stop).  The form of development is dense within walking distance of the transit node.  Types of development can include commercial, office, residential, retail, and entertainment.  This combination of transit node and form and type of development promotes a symbiotic relationship among mixed uses that reduces reliance on private transport while increasing ridership of public transit.

Rural residential cluster

Clustering residential development is a land use strategy used in rural areas.  Two primary aims are complementary.  One aim is to minimise the overall footprint of a residential development in order to reduce alienation of agricultural land.  A second aim is to deliver residential services more efficiently by also clustering the infrastructure required for residential uses, such as energy and communications.

Additional BC Government resources

• Local Governments
• Regional districts in B.C.
• Local government governance and powers
• Local government planning
• Local government planning, land use and property
• Official community plans for local governments
• Local government land use regulation
• Zoning Bylaws
• Regional growth strategies for local governments
• Status of regional growth strategies
• Development permit areas
• Density bonusing and amenities
• Local government advisory planning commissions
• Local government finance
• Local government development financing
• Local government grants and transfers
• Local Government Infrastructure Grants
• Local government statistics