ABC councillors approve new hotel development policy with changes to rezoning payments

What happened: City council approved a new policy for hotel development in Vancouver, with the goal of making it easier for the private sector to build more hotels and increase room supply in the city. 

• Part of the report passed unanimously, while significant amendments were also passed by the ABC majority with opposition from other councillors  

The problem: There’s an urgent need for more hotel rooms in Vancouver, as current occupancy and rental rates are very high, according to a report from city staff.

• The city currently has about 13,000 hotel rooms across 78 hotels. Only seven of those existing hotels are outside the downtown core. 

Room rates here are much higher than the Canadian average. For example, in August 2024, the average daily rate for a hotel room in downtown Vancouver was $422, which was double the national average. The same data set showed a room in downtown Toronto cost $345 per night, for comparison. 

• A small part of that cost is a temporary tax of 2.5 per cent on hotel and other short-term accommodation bookings, which is helping to fund the city’s FIFA World Cup budget.

To meet projected hotel room demand, the city needs approximately 10,000 new hotel rooms over the next 25 years, according to a study by tourism promoter Destination Vancouver that city staff reviewed and generally agreed with.

• ABC Coun. Sarah Kirby-Yung highlighted that the city has had about the same number of hotel rooms since 2002, according to comments from Destination Vancouver’s CEO at the hearing.  

Increasing hotel capacity has been a big focus for the ABC majority council this term, led by Kirby-Yung. That focus included the creation of a hotel development task force in 2023, which – made up of industry representatives – advised staff in creating the approved report. 

The details: The city’s main mechanism to encourage new hotels is by allowing additional density during the rezoning of specific projects. That includes changing the zoning policy in the central business district to provide a temporary three-year exemption around minimum site size requirements. 

They also moved forward with hotel-specific changes to the Broadway Plan, which allows for hotel proposals to be considered for smaller sites in employment and industrial parts of the plan area, such as West 2nd Avenue in Mount Pleasant.  

• Staff will also continue working on council’s motion from last year to allow for smaller “pod” hotels. 

The new policy will be rolled out with a city communications strategy to advertise prospects for hotel development, additional density, and office conversion to development and business groups. 

• Dive deeper: A group of hotel union members rallied at city hall on Monday in opposition to the staff recommendations. One union campaigner said the city shouldn’t be worried about hotel rooms when residents can’t afford to live in Vancouver, according to CityNews.

Last-minute amendments: Kirby-Yung brought forward a sweeping amendment to the report. Her amendment sought to change many aspects of the recommendations, with the most consequential being a proposed change to allow private space in hotels – like recreational facilities or back-of-house spaces – to qualify as part of the building’s community amenity contribution (CAC). 

• CACs are levied by the city as part of rezoning and usually takes the form of cash payments or a community space like a daycare, library, school, or arts space included in the new building, which is then given to the city for public use. 

Kirby-Yung said this policy idea is “coming directly from industry” and it’s needed to get development moving – pointing to a different city policy to exempt CACs for smaller market rental buildings. Kirby-Yung said her amendment would still require new hotels to pay CACs, but it would reduce their payments by letting some of the hotel’s private spaces qualify toward their CAC requirements. 

• Staff said that approach hadn’t been raised prior to this week, and the city had never been asked in any previous applications for private space to be considered as a community amenity. Staff agreed with Independent Coun. Rebecca Bligh that adopting this policy approach could create a “slippery slope,” opening space for a diminishment of the city’s community amenity contribution policy. 

“Generally speaking, I think these amendments are out of line.. in terms of negotiated public benefits. This doesn’t benefit the public in the spirit of a community amenity contribution. I cannot defend a decision to support this, when staff have said ‘yes there’s risk associated with this,” Bligh said. 

• Bligh pointed out that the city is already facing an approximate $500 million deficit in their capital plan – with developer’s cash contributions being used to pay for the renewal and building of new amenities. 

“After all of the work staff have done… for this to come in as a political amendment, I feel is inappropriate, “Bligh said.  

• As a result, new OneCity Coun. Lucy Maloney tried to refer the whole report to a future meeting – so new councillors could have time to review Kirby-Yung’s amendments – but that attempt failed along party lines, with ABC councillors voting in opposition and while Green Coun. Pete Fry and COPE’s Sean Orr voted in favour with Bligh and Maloney. 

Ultimately, Kirby-Yung’s amendment passed along the same 5-4 lines. 

Coun. Lenny Zhou also brought forward an amendment, which was approved unanimously, to allow limited exceptions to build hotels along the Granville Strip. The city is currently drafting their most recent plan to revitalize the beleaguered entertainment distric.  

Governance patterns: Fry took issue with Kirby-Yung’s amendments, saying their late introduction was contrary to the province’s open meeting principle.  

• Councillors Bligh, Fry, Orr, and Maloney hadn’t seen the proposed amendment until the day of the meeting. 

This is another example of an ongoing issue that Fry and others have with the ABC majority’s practice of introducing substantial amendments to staff reports, without making them public or circulating them to all councillors beforehand. 

“I don’t like how this comes out so well-formulated,” Fry said to Bligh during a short recess, gesturing to ABC’s declared practice of caucusing in private. The open meeting principle applies to gatherings where elected officials could be moving toward making decisions, which could be the case if and when a majority party meets in private to draft policy. 

• Coun. Lisa Dominato pushed back against Fry’s comment, saying the meeting did provide the opportunity for open discussion about the amendment. 

It’s a debate that’s come up before, with Vision Vancouver councillors also being accused of improper caucusing when they had a majority at city hall in the mid-aughts, according to the Vancouver Sun. 

What it means: The approved and amended report is an example of how – despite the changes to the makeup of city council – ABC still has full control to move their priorities forward as long as ABC councillors vote together. 

Councillors Orr and Maloney weren’t clear on some council procedures – understandably so, given it’s their first week on the job – and it will likely take more time and training for them to become comfortable in their new roles. Maloney took quite a bit of initiative in attempting to defer the whole report based on Kirby-Yung amendments, while Orr had a more tentative approach on the day’s first report. 

• Bligh, Maloney, and Orr could be seen huddled together in chambers during a short recess, right after Kirby-Yung introduced her amendments. For the outside observer, it appears the four non-ABC councillors are already developing relationships and alliances. 

However, if they wish to successfully oppose ABC’s agenda or their way of conducting civic business – like the party’s practice of introducing significant day-of amendments to staff reports – they’ll need to peel off at least one ABC councillor to vote with them, which will likely only be possible on certain contested issues.