Intensification Annual Report & Initiatives Update

Design Regina: The Official Community Plan (OCP) directs “at least 30 per cent of new population to existing urban areas as the City’s intensification target.” This report provides annual intensification reporting for 2021 and recommendations to accelerate progress on the intensification[1] goals and targets from the OCP, priorities identified by the Recovery & Efficiency Task Force and City Centre Core Framework goals.

Financial Impact

Incentive Programs

The future incentive programs summarized in Appendix A will initially target the City Centre[2] only. The incentive programs are intended to offer eligible applicants the choice of a tax exemption or lump-sum grant incentive.

Grant funding for the future incentive programs will be requested through the 2023 budget cycle and, if approved, will be available to fund projects in 2023 and 2024. The funding requirements for grants are based on similar programs from other jurisdictions, as identified in the Intensification Incentive Discussion Paper presented to City Council in May 2021 (CR21-86) and jurisdictional research attached as Appendix B.

Per the Development Charges Policy, ‘tax lift’[3] from intensified development within established areas of the city is used to fund intensification-related projects. As such, tax exemptions provided under each future program will delay the collection and allocation of tax revenue from intensified development in the City Centre to fund intensification-related infrastructure projects, however, it is fully intended to be collected after the exemption period ends.

Staff resources for administering each incentive policy will be found within existing staff complements.

Waiver of Fees

Waiving zoning bylaw amendment and discretionary use applications fees for projects involving intensified development within the City Centre will have minimal impact on yearly planning application fee revenue. Zoning bylaw amendment application fees are set at $3,500 for minor applications and $5,400 for major applications. Discretionary use application fees are set at $2,500 and $5,000 for minor and major applications, respectively. This can be revisited at a later date and fees may be re-instated when incentives are no longer required.

Policy/Strategic Impacts

The report recommendations align with OCP intensification policy and certain Recovery & Efficiency Task Force priorities, such as: Priority 1 – A Liveable, Sustainable, and Vibrant Downtown, Priority 2 – Attracting Investment with a Focus on Service Delivery and Community Responsibility and Priority 3 – Sustainable and Resilient Growth.

In addition, the report recommendations complement City Centre Core Framework goals of prioritizing City Centre development for intensification and investing in infrastructure to support City Centre Core development.

The recommendations align with the policies, priorities and goals noted above as they are designed to support and facilitate economic growth and intensification opportunities within the City Centre by allowing development in the City Centre a more viable option from financial, regulatory and procedural perspectives.

Intensification is a key component of certain actions recommended in the Energy and Sustainability Framework (ESF) to reach Regina’s energy and emissions reduction goal by 2050. Action 8.5 (Spatial densification: Residential) and Action 8.6 (Spatial densification: Commercial) involve adapting the City’s growth plan to allocate 15 per cent of new population to City Centre, 50 per cent to intensification areas (i.e. specific zones along transit nodes) and 35 per cent to new neighbourhoods.

The recommendations may accelerate progress on current OCP intensification targets and assist with alignment with ESF targets. The recommendations also support and maximize the benefits of other key areas of the ESF, known as the “Seven Big Moves”, for actions necessary to achieve Regina’s energy and emissions reduction goals, specifically, Big Move Six, Action 6.1: Increase Active Transportation and Transit Use.

Environmental Impact

Intensification in established areas of cities is generally known to contribute to the reduction of energy consumption and associated greenhouse gas emissions in various ways, such as: reducing travel distances, encouraging active transportation and use of transit, creating a more compact city by building up existing areas and making more efficient use of land and infrastructure already developed and in place.

1.      Do not proceed with the recommendations and maintain the status quo. Under this option, intensification would still be supported through existing, ongoing and planned initiatives, programs and services (e.g., Underutilized Land Improvement Strategy), however, developers would not receive any additional financial relief for developing in the City Centre. This may continue the trend of developers prioritizing greenfield areas for new development over established areas, as developing in greenfield areas can provide more certainty (e.g., infrastructure capacity, zoning) and relatively fewer development barriers and costs.

2.      Expand the target area for these recommendations (i.e., City Centre) to other core area neighbourhoods, such as Heritage and North-Central. Expanding the target area for the recommendations may diminish the momentum and cumulative benefits of increased intensification and revitalization that can be present when targeting more specific and concentrated areas alone, such as the City Centre. In addition, there would be a degree of risk associated with expanding the target area without first having appropriate consultation with impacted areas related to sites and land uses appropriate for intensification at the neighbourhood-scale. Administration does anticipate bringing forward future plans for incentivizing development in surrounding neighbourhoods, see next steps sections of this report for more details.

Stakeholders and other interested parties have received a copy of the report and notification of the meeting to appear as a delegation and will receive written notification of City Council’s decisions. Stakeholders were consulted on intensification incentives, the density target for new neighbourhoods and three intensification-related discussion points from CR21-86.

Regina housing consumers were engaged as a part of the statistical market analysis through a housing survey conducted via telephone and online related to housing type and locational preferences. This approach ensured that residents from each Ward completed the survey.

This report contains a 2021 update on the implementation of the Underutilized Land Improvement Strategy. More detailed results from the implementation of the strategy in 2021 will be posted on the ‘growth & intensification’ webpage on Regina.ca.

Public notice of the public hearing required when Council considers the proposed bylaw amendment to The Development Application Fee Bylaw, 2008 to waive certain planning fees for intensified development will be given in accordance with The Public Notice Bylaw, 2020.

Planned, strategic growth of a city can result in positive impacts, such as job creation, increased income, additional tax revenue and higher property values. Specifically, revitalization efforts and intensification growth can generate additional community investment and increase the efficiency of City services (e.g. transit), infrastructure (e.g. water, sewer) and amenities (e.g. parks and recreation facilities) supporting well-being and quality of life for residents.

Intensification Annual Reporting

The OCP manages the city’s growth to a population of 300,000 and provides a Growth Plan (Appendix C) for achieving a population of 300,000 through development and population growth in greenfield and established areas of the city. The Growth Plan is partially influenced by two intensification-related targets from the OCP which the City has been reporting on since the implementation of the OCP in 2014:

1.      Intensification Target – 30 per cent of all new population growth is to occur through intensification in established areas; and

2.      City Centre Population Target – 10,000 in population growth is to occur within the boundaries of the City Centre.

Progress on the current OCP intensification target is estimated annually based on building permit data and is calculated by measuring the proportion of growth in greenfield areas against growth in established areas. The most recent annual estimate of residential intensification indicates that the intensification rate in 2021 was -5.2 per cent. Although greenfield growth dropped from 2020 to 2021 (Appendix D), the intensification rate decreased during this period due to demolition permits in established areas outpacing permits for new intensified residential development. This brings the cumulative residential intensification rate since the implementation of the OCP in 2014 to 11.2 per cent, as shown in Table 1 below.

Cumulative City Centre population growth between 2014 to 2021 is estimated to be 81. This data is an estimate based on building permit activity and average household sizes. Detailed data from the 2021 Census will be used to verify and update progress on these targets when it is released in late-2022 or early-2023.

Underutilized Land Improvement Strategy Reporting

The Underutilized Land Improvement Strategy (ULIS) was approved by City Council in July 2019 (CR19-72) and finalized in December 2019. The content was informed by the findings of the 2018 Underutilized Land Study (CR18-126). The ULIS addresses barriers to the redevelopment of underutilized lands. Implementation of the ULIS is reported annually over the strategy’s 10-year lifespan (2020-2030).

The ULIS contains several goals, each with strategic actions to be initiated over four timeframes:

·         Immediate (2019);

·         Short-term (2020 to 2021);

·         Medium-term (2022 to 2024); and

·         Long-term (2025 to 2030).

The ULIS goals capture strategic actions related to regulations, process improvements, financial considerations, promotional aspects of intensification and overall monitoring to determine impact over time. The ULIS contains a total of 48 strategic actions, with 26 to be initiated within the first three years (2019 to 2021) of implementation. Table 2 below, provides progress on the immediate, short-term, and medium-term strategic actions.

2021 implementation highlights include:

·         The Development Levy Bylaw was amended in December 2021 (CR21-73) to repeal the Intensification Levy and instead fund intensification-related infrastructure through ‘tax lift’ from any intensified development within established areas.

·         A customer interface portal called ‘eBuild’ was developed allowing applicants to submit and track building permits online.

·         The methodology for maintaining the Underutilized Land Inventory was refined to provide for more accurate management and reporting on the inventory going forward. As a result, the 752 underutilized sites identified in the initial 2018 inventory have been updated to 755. The updated inventory is summarized in Table 3 below.

Ongoing initiatives underway supporting the ULIS include:

·         Advancement of the Neighbourhood Land-Use Planning Program;

·         Dewdney Avenue Corridor Rehabilitation;

·         Implementation of City Centre Core Framework;

·         Implementation of The Yards Neighbourhood Plan; and

·         A report exploring the regulation of temporary uses is targeted for Q4, 2022. This report will consider findings from stakeholder consultation to inform potential zoning bylaw amendments to allow and regulate a range of temporary uses in certain areas of the city.

Consultation on Intensification Incentive & Discussion Points and Market Analysis

During the deliberation on the Intensification Incentive Discussion Paper (CR21-86), City Council authorized Administration to consult stakeholders on an intensification incentive and three related discussion points:

·         Discussion Point #1 – Incentivizing temporary and public usage of vacant sites;

·         Discussion Point #2 – Restrictions and/or disincentives on where certain housing types can be built (e.g. higher-density development) in an effort to compel particular development in the neighbourhoods or other newer or existing subdivisions assigned in this report; and

·         Discussion Point #3 – Expanding the City’s land development strategy to include the recruitment of certain development and development types in the assigned neighbourhoods.

In addition, an independent market analysis and housing survey were undertaken to understand consumer housing and locational preferences in the city.

Consultation on the density target for new neighbourhoods was directed by City Council on August 11, 2021 (MN21-8) and was added to the scope of this consultation due to the interrelated nature of the topics. Reporting on the density target will come in a separate report.

Stakeholder Consultation

Stakeholder consultation on an intensification incentive, the density target for new neighbourhoods and the three related discussion points from CR21-86 were completed through several touchpoints, which are detailed below.

Session with Land, Social and Economic Development Stakeholders

A virtual information session and workshop were held on December 14, 2021. Approximately 120 stakeholders from Regina’s land, social and economic development communities were invited to the session. Before the session, stakeholders were provided with a discussion paper package that included background information and research. 29 stakeholders attended the session.

After the session, a virtual questionnaire on the consultation topics was provided to all stakeholders invited, regardless of whether they attended or not. The City received 22 responses to the questionnaire with representation from each stakeholder community. Feedback from the session with the various stakeholder communities and the associated questionnaire include: (see Appendix E for full results):

·         Identification of a preferred intensification incentive program that includes a grant covering costs unique to intensification projects (e.g. demolition of derelict buildings, site remediation).

·         Temporary uses can be incentivized by allowing and regulating them through clear and easy-to-understand policy.

·         Opposition to potential policies intended to restrict new greenfield development to compel new development to core areas instead.

·         Any type of development should be recruited to core areas. However, improvements to infrastructure, streetscapes, additional commercial amenities and revitalization of core area neighbourhoods are needed before new development will occur.

·         When looking to redevelop within existing vacant buildings, there can be costly challenges associated with upgrading the building to meet building and fire code standards to support a new development or land use change.

Be Heard Regina

Additionally, engagement was offered through Be Heard Regina targeted to community associations, neighbourhood school stakeholders and those signed up for the City’s Design Regina interested parties list, which has more than 500 individuals registered to receive email updates. The Be Heard Regina engagement included an overview of the project, access to a discussion paper package providing background on consultation topics and a non-statistical survey. The survey was open from January 6 to January 16, 2022 and was completed by 213 respondents.

Findings from the Be Heard survey include (see Appendix E for full results):

·         There is overall interest in the City regulating a wide range of temporary land-use types with specific development standards and an indifference as to whether temporary uses are regulated through the Zoning Bylaw or a separate policy.

·         Respondents generally oppose potential policies intended to restrict new greenfield development to compel new development to core areas instead.

·         The City needs to make improvements to streetscapes, beautification, clean-up and overall revitalization in core areas before areas will intensify with more people and development.

Market Analysis

The market analysis (Appendix F) consisted of two phases: statistical data-driven analysis and a housing survey.

Phase One: Statistical Analysis

A statistical market analysis was completed by consultant, Intelligence House, at the end of November 2021. It reviewed supply and demand dynamics of housing products using current market data to identify current market drivers that influence consumer preference toward certain housing types and locations.

Data from the analysis is segmented by city areas/zones (Appendix G) to provide a detailed account of consumer demographics and to understand preferences and conditions across different areas of the city. The analysis included a focus on the core/central area, specifically some of the factors that may be contributing to a lack of intensification.

Findings from the statistical analysis include:

·         Some neighbourhoods within the central area of the city are hindered by a lack of attractive housing supply and need commercial amenity and neighbourhood improvements to support intensification and development. As a result, there currently is little demand for consumers to relocate to the central area of the city. To address the lack of demand, the market analysis hypothesizes that incentives may be needed to kick-start the development of higher quality housing in the area in concert with targeted enhancement of neighbourhood amenities and spaces.

·         There is a mismatch between new housing products supplied to the market (e.g. multi-family dwelling) in greenfield areas and current consumer preference which shows a preference for single-family dwellings.

·         The analysis indicates that if single-family dwellings are not available within greenfield areas, consumers are willing to pursue already-built single-family homes in certain mature neighbourhoods which may inflate the prices of these types of homes.

·         The market analysis suggests certain core neighbourhoods have conditions that are conducive towards intensification opportunities, based on various demographic and locational factors.

Phase Two: Survey

A housing survey (Appendix H) was undertaken to supplement the statistical analysis by testing the findings of the analysis and identifying other gaps in the housing market where preference-oriented demand is currently unmet. Survey questions were designed based on the findings of the market analysis and included a focus on the intensification of established areas of the city.

The survey began in late November and concluded in mid-December. Survey respondents were provided with an option to provide telephone or web-based responses based on their preferences. The sampling strategy targeted all 10 wards of the City, with top-ups in target neighbourhoods. A total of 528 residents completed the survey.

Findings from the housing survey include:

·         Respondents ranked lot size (23 per cent), adequate square footage/space (22 per cent) and preferred style of garage (21 per cent) as the top three most important property features for a household.

·         Respondents ranked proximity to shopping/amenities (46 per cent), parks and playgrounds (33 per cent) and neighbourhood safety (19 per cent) as the top three most important community features for a household.

·         41 per cent of respondents (or a friend or family member) are planning to move or buy a home in the next five years.

·         53 per cent of respondents who identified as ‘movers’ indicated they would prefer to move within the City of Regina, while 32 per cent of these respondents indicated they would prefer to move outside of Regina. Of those who indicated they would prefer to move outside of Regina, 50 per cent specified they are most likely to pursue other communities in Saskatchewan.

·         Respondents who identified as ‘movers’ or ‘recent movers’ were asked what factors would have to be offered in central neighbourhoods for them to live there. The top three responses were:

o        Reduced criminal activity/safer environment (28 per cent);

o        Nothing – respondent would not consider moving here (19 per cent); and

o        Proximity to amenities, stores and services (18 per cent).

Recommendations:

Based on annual intensification reporting, intensification consultation and market analysis, several actions are recommended to advance progress on the City’s intensification and City Centre growth targets.

1.      Intensification and Revitalization Incentive Programs

The establishment of future intensification and revitalization incentive programs initially targeted to the City Centre is recommended to encourage both intensification and revitalization of core areas. An overview of the programs is attached as Appendix A for reference.

Prior to stakeholder consultation on incentives, there had been a focus on developing a program to incentivize intensification on underutilized sites. However, findings from stakeholder consultation, market analysis and the housing survey indicate a shared sentiment that revitalization of core areas is also needed to encourage new development, businesses and amenities. A revitalization incentive program providing financial compensation to building owners and businesses may assist in catalyzing the revitalization of existing buildings within core areas, which in turn may attract intensified development opportunities.

Both incentive programs offer eligible applicants the choice of a lump-sum grant or tax exemption incentive calculated based on defined eligible costs incurred during an intensification or revitalization project.

2.      Expanding the Scope of the Neighbourhood Land Use Planning Program

The Neighbourhood Land Use Planning Program entails updating 12 neighbourhood plans in existing areas and creating plans for 19 neighbourhoods that currently do not have a neighbourhood plan. Prioritization of this work is defined in the Neighbourhood and Corridor Sequencing Plan (PPC19-2).

Neighbourhood plans are secondary plans providing detailed land use, urban design and infrastructure policies at a neighbourhood scale. Most recently, the Al Ritchie Neighbourhood Land Use Plan was completed and approved by City Council (CR22-29). Work on the Hillsdale Neighbourhood Land Use Plan is currently in-progress.

Experience from the neighbourhood planning process and findings from the consultation, market analysis and housing survey described in this report suggest there may be a need to re-focus neighbourhood plans to consider additional factors related to intensification. For instance, infrastructure capacities play a role in determining whether intensification is viable in an area. Additionally, the overall quality of streetscapes, natural amenities and the public realm in area can impact private sector investment in the area. As such, it is recommended that Administration report back to City Council regarding re-focusing the scope of the neighbourhood plan to address additional factors related to intensification and revitalization:

A.     Focusing on the revitalization of strategic areas and corridors, rather than defined neighbourhood boundaries;

B.     Considering improvements to streetscapes and the public realm;

C.    Analyzing infrastructure capacities related to possible intensified development opportunities within a defined area; and

D.    Identifying key sites within a specific area for potential zoning bylaw amendments to accommodate higher intensity land uses.

The review will also examine whether the City Centre and other core areas should be further prioritized for this work, as they collectively have the highest concentrations of underutilized sites in the city.

3.      Waiver of Fees

To help support intensification opportunities and reduce regulatory barriers, Administration recommends City Council waive zoning bylaw amendment application fees for applications that involve rezoning a site to a zoning district that accommodates a higher intensity of land use to support a specific intensified development proposal. An example of this could be a developer who needs to rezone a site zoned for single-family development to a zoning district that accommodates a proposed multi-family development.

Additionally, intensified development applications can require discretionary use approval depending on the nature of development and current zoning for the site. As such, it is recommended that discretionary use application fees are also waived for intensified development.

It is recommended that the waiver of these fees be targeted to the City Centre initially. Prioritizing the City Centre is recommended to facilitate the development of the high number of underutilized sites in the area and to bring the City closer to the OCP City Centre population target of 10,000 new residents.

Next Steps:

The recommendations initially target the City Centre only. Surrounding core neighbourhoods also have high concentrations of underutilized sites and market potential for intensification, as identified in the market analysis (e.g. Heritage). However, since these surrounding neighbourhoods are predominantly comprised of residential land uses, consultation with residents is recommended to understand community needs and what sites, areas and land uses should be targeted for intensification and renewal through incentives, plans and related policy. For instance, there are current plans for analysis of housing data and consultation with communities on built form and land use. Data and consultation of this nature can be used to help tailor future incentive programs and policies to ensure they meet community needs.

As each recommendation is implemented, Administration will track performance measures, such as number of applications, the construction costs, property assessment growth, etc., related to the overall impact the programs are having on proliferating intensification and revitalization within the City Centre. After evaluating performance and completing further consultation with core area neighbourhoods, Administration will report back to City Council with recommendations related to the continuation or alteration of incentive programs and policies. This report will also consider whether the target area should be expanded to other core areas to better target intensification and community renewal.

The administration of the proposed incentive programs, as well as the existing housing and heritage incentive programs, will be coordinated and resourced to ensure customers are provided upfront and continued support throughout their projects. The incentive programs will be stackable and both tax exemptions and grants may be accessed from different programs, if projects are eligible. This approach will be more efficient than having multiple business areas administer similar incentive programs separately and will allow staff to work with applicants to identify opportunities to maximize the benefits offered in all programs.

Design Regina: The Official Community Plan (OCP) was adopted by City Council in December 2013 (CR13-173) and received Ministerial Approval from the Province in March 2014.

In 2016, City Council passed motion MN16-9 – Neighbourhood Plans, directing the City to prioritize the completion of new ‘neighbourhood plans’, which form a part of the OCP (Part B) and outline growth policy for specific neighbourhoods. In 2019, the Planning & Priorities Committee was presented with a Neighbourhood & Corridor Sequencing Plan for completing these new neighbourhood plans (PPC19-2), which included direction for:

·         The area of the city that would be subject to new neighbourhood plans (Intensification Area);

·         When a particular neighbourhood receives a new neighbourhood plan (Neighbourhood Corridor & Sequencing Plan);

·         Establishing neighbourhood plans boundaries that align with Community Association boundaries; and

·         Defining the scope and intent of neighbourhood plans.

On December 17, 2018, City Council endorsed the Underutilized Land Study and directed Administration to develop an Underutilized Land Improvement Strategy (CR18-126). The Underutilized Land Improvement Strategy was developed and approved by City Council on July 29, 2019, with the following amendments:

·         That neighbourhood clean-up campaigns be included in the strategy;

·         That tax legislation changes be included in the strategy; and

·         That investment in innovative transit be included in the strategy (CR19-72).

On April 14, 2021, City Council approved the City Centre Core Framework (CR21-48) which provides a collective vision between the City of Regina, Regina Downtown Business Improvement District, Regina Warehouse Business Improvement District and Regina Exhibition Association Limited for coordinated processes, complementary land uses and the infrastructure required to support and connect development in the land areas comprising the ‘City Centre Core’.

An Intensification Incentive Discussion Paper (Discussion Paper) was presented to City Council on May 12, 2021 (CR21-86), where Administration was authorized to consult stakeholders on incentive options from the Discussion Paper with three incentive options serving as a starting point for consultation:

1.      Development Charge [Intensification Levy] Rebate;

2.      Choice of Tax Increment Equivalent Grant or Tax Exemption; and

3.      Annual Tax Increment Equivalent Grants Covering Eligible Project Costs.

During their deliberation on the Discussion Paper, City Council added the undertaking of a market analysis to the project and consultation on three related discussion points:

1.      Incentivizing temporary, public usage (community gardens and public spaces);

2.      Restrictions and/or disincentives on where certain housing types can be built in an effort to compel particular developments in the neighbourhoods or other newer or existing subdivisions assigned in this report; and

3.      Expanding the City’s land development strategy to include the recruitment of certain developments and development types in the assigned neighbourhoods (CR21-86).

The repeal of the Intensification Levy in November 2021 and the introduction of a policy that would fund intensification-related infrastructure through tax lift from intensified development changed the nature of some of the incentive options outlined in the Discussion Paper. As such, Council removed the Development Charge Rebate option from the scope of this consultation through their approval of the recommendation to repeal the Intensification Levy (CR21-161).

Respectfully Submitted,              Respectfully Submitted,

{Signature}

Prepared by: Luke Grazier, Coordinator, Integration & Stakeholder Relations