DOWNTOWN VICTORIA COMMUNITY ALLIANCE
REPORT No. 4
MARCH, 2010
This fourth report (we’ve dropped ‘annual’ in favour of periodic) arrives at a very interesting time in downtown’s history:
- The draft Downtown Plan (also known as the Downtown Plan Review) will be released to council shortly and should be available for public consideration and response this spring.
- New development in downtown has abated because of economic conditions; fortunately, several residential buildings have completed (Juliet, Aria, Falls, etc.) and are at various stages of occupancy. Work continues on The Hudson, and a Juliet-style project is commencing at 834 Johnson. Across Johnson Street, the significant Atrium office/commercial building (new home of BC Ferries Corp.) is showing steady progress.
- Some major projects on Downtown’s Vic West shoulder have stalled (Bayview) or slowed (Dockside).
- The recent and continuing Blue Bridge imbroglio has tested both the city’s decision-making apparatus and the public’s mood both for change and for major spending.
- The emerging regional shopping/office/residential centre, Uptown, which is under development at the former Town and Country site in Saanich, likely will pose new challenges for the downtown economy and business viability. We think this further reinforces a cornerstone DVCA belief first established at the Downtown 2020 conferences: that residential and mixed use development in and around downtown and shoulder areas is crucial to the success of our businesses, services and cultural assets.
Downtown Plan
As noted on the city's official website, “the new Downtown Plan will provide a policy framework to guide and manage physical change in the downtown area.” We understand that the draft plan is likely to propose a larger footprint for downtown, especially in Rock Bay to the north, and may also propose certain relaxations regarding building height and density.
It should be noted, though, that this plan, like those that came before it, is principally a land use plan. It remains to be seen whether the plan incorporates and integrates an economic, social and cultural vision with the land use vision and whether the plan or some collateral exercise deals with the complexities of implementation. We think of Harris Green as an example of great city intention with little thought given to how the city might sustain its commitment to outcomes through long-term partnership and continued investment in infrastructure and amenities.
All of this is to say that DVCA will be studying, and encourages all of you in our network to study, the draft plan when it is released not just for its land use details, but also its overall coherence, intellectual rigour and implementability.
Economic and Development Climate
Obviously, the Canadian economy has come through the current economic downturn much less damaged than the American economy; and this extends to cities and central areas as well. There has been little or no real estate foreclosure; the banks are in reasonably good shape; unemployment has not skyrocketed.
Nonetheless, the Victoria economy and specifically downtown’s has not been untouched by wider economic conditions. Tourist numbers and spending are down significantly, and likely to remain so. Discretionary spending—a large part of the downtown retail and service economy (restaurants, specialty shops and services, etc.) depends on it—is down significantly. The funding of real estate development via bank financing has rarely if ever featured such onerous performance conditions.
It is our view that in spite of claims that the recession is over, or soon will be, the fundamentals (bank credit, consumer confidence, etc.) stand a good chance of remaining weak for several years to come. We are also reminded that there is an ‘echo’ effect long after such recessions may be technically over. For example the habits and patterns of thrift worked their way into personal consumer behaviour and remained long after the Great Depression had run its course. We anticipate something analogous in Victoria, and while we can’t predict specific impacts, we think it will be a climate of limited and very cautious investment, with very low appetite for risk, throughout downtown. In one way or another, this may affect new development, expenditure on building amenitization and upgrading, and public investment.
There is a professional consensus that Greater Victoria currently has an oversupply of new-built condominiums (notwithstanding optimistic real estate industry reports about inventory and prices of resales), and there is little certainty about how long it might take to absorb much of this surplus, thus clearing the way for new projects. This has short-term implications for future development in and around the downtown.
On the retail and office side, these excerpts from the last market reports prepared by Colliers Victoria are useful:
The Victoria retail market segment had a slight increase in vacancy from 2008 levels. The shopping centre vacancy rate increased from 1.1% to 2.1% in 2009 and Victoria’s downtown street front vacancy increased from 2.7% to 3.5%. This relatively muted change in vacancy is due, in part, to Victoria’s stable government employment base and the limited overall supply of retail options in the region.
Office demand during 2009 softened resulting in negative absorption of 33,000 square feet across all market segments. The Downtown market experienced negative absorption totaling 58,773 square feet with the Suburban Class A being the only sector to show positive absorption of 25,758 square feet. Both the public and private sectors registered negative absorption, which were (11,336) and (21,679) square feet respectively.
While the Colliers reports show slightly negative trends whose numbers on their own terms are no great cause for alarm, we believe there needs to be much more expert understanding of economic tipping points and interactions between different market forces. We note, for example, that on the one hand the Colliers report cites the stability of the province as a consumer of downtown office square footage, and on the other that the province intends to reduce the provincial work force by one-sixth or greater over the next few years. (This will impact not only the province’s needs for office square footage, but also, potentially, the space requirements of a broad range of businesses providing service to government.)
In summary, we believe that especially because of conditions of great economic uncertainty, it is critical for the city to link policy and public investment planning decisions to expert strategic economic thinking and planning.
City of Victoria Official Community Plan
At the same time that a draft downtown plan will be coming forward to council and the public, the Official Community Plan is under review, and is currently in the hands of a citizen advisory committee. A thorough public engagement process is expected to kick off this spring and to take about a year. You may read about the city’s project charter and framework intentions here and review a detailed description of the public engagement strategy here. You can participate in the OCP engagement process here.
It is unclear at this time if the thinking around the new OCP is downtown-centric or in any way oriented to produce or favour particular strategic outcomes beneficial to downtown. We encourage you to become actively engaged in the OCP public engagement process, to carefully study the city’s thinking from a downtown perspective, and to be an active, articulate participant in the public conversation.
We will be looking for the presence of ideas and the quality of strategic thinking in the following areas:
- Mobility and Transportation
- Housing
- Public Amenities
- Public Art
- Institutional Investment
- Zoning and Land Use
- Business Recruitment
- Residential Recruitment
Housing and Housing Affordability
We won’t dwell here on the city’s homelessness strategy, which has had modest success, but on the continuing intractable problem of housing affordability which continues to work in favour of more affordable options in suburban areas. This impacts the large service worker population that cannot easily find accommodation close to employment, and other constituencies, and favours the likelihood that paycheques earned from employment in and near downtown are being spent in suburban settings.
This is to say that a housing affordability strategy is really a disguised economic development strategy.
A sub-group emerging from the Downtown 2020 conferences studied this subject, and determined that even without changes to existing zoning, there was potential for another 30,000 residents to live in new development within one mile (a 15-20-minute walk) of downtown. It was an explicit understanding at the time of this study that no other strategy for downtown economic and social health would produce comparable long-range benefits.
The challenge to all such strategies is getting the policy and zoning right; adapting and adjusting policy to inevitable market changes (that is, designing resilience and responsiveness into the policy); making sure the strategy has a number of moving parts (policy, mobility plans, public investment, etc.) working at a common purpose; and a framework that ensures a long-term city commitment for the life of the plan..
DVCA in 2010/2011
As you might surmise from the themes of this report, DVCA will be focusing on promoting public conversation and understanding about these concerns throughout the period of the downtown plan review and the year-long public engagement process for the OCP.
Particularly in response to the draft downtown plan, we will be creating opportunities for public discussion and evaluation. Our focus will be on the city’s execution strategy—that is, not just the land use concepts but also the presence (or absence) of an implementation blueprint—innovative programs and policies designed to ensure that the new downtown plan becomes an action playbook and not a theoretical framework.
We will organize public forums to present effective practices from other cities and to release innovative local thinking on this subject.
Municipal elections next take place toward the end of 2011, and DVCA anticipates that it can play a useful role, as the election period approaches, by ensuring that voters enter the polling booth mindful of and knowledgeable about downtown issues and opportunities.