MPS: MORE ON DEVELOPERS' ECONOMIC INTERESTS

[This is a post sent to me by Keith Irving. Mr. Irving served as a City Councilor in Iqaluit for a number of years and was chairperson of its Planning Committee.]

I am glad you have raised this. It is an important issue which can significantly undermine a good Land Use Bylaw. I’m not sure of the specifics of the projects that you have used as examples but I think you are implying that variances were granted to allow projects to move forward based on a developer’s argument of “economic feasibility”. I have seen what happens in a community when the granting of variances becomes an expectation by developers and you might as well throw away the bylaws at that point.

In my experience as a City Councillor in Iqaluit, it was a common strategy by developers to justify their requests for variances (increased building height or densities for example) by claiming projects would be “uneconomic” and not go forward without the permission of Council to exceed the bylaws. The economic case was claimed, but never was evidence provided. Not that I would ever expect a developer to open their books to show the difference in profit margins between a project with or without the variance; but you can be sure, that the hard numbers were never presented by a developer. It is amazing now that I think about it, how often these claims were made and considered to have merit by municipal staff and Council with absolutely not one number presented.

It was only after we as a council early in our term, called one developer’s bluff, that it became clear to all that these are usually empty threats. It is easy for developers to make this claim knowing that municipal staff and politicians fear being seen as “anti-development” or killing “progress”, or negatively affecting local jobs. It was common for developers to add a little more pressure by pointing out the increased tax revenue (which always is an easy argument for staff to get behind, especially if they are wrestling with their departmental budgets) or that there is a “desperate need for housing”. Most of the time, by the time Councillors see the development proposal with the variance request, staff have already bought into these arguments and become a supporter of the developer’s request adding more pressure to the Council to accept the variance.

The final card that we also saw played by the developer, if needed, was to throw in the mention of a lawyer and then many Councillors would cave in a second.

Let’s be clear, any developer who considers purchasing a piece of land has determined what he can build on that land within the bylaws. He/she has worked out all the economics before purchasing the land. It is important to recognize that the value of land reflects what is permitted under the bylaws and not what a developer can possibly squeeze out of a municipality in variances.

If a developer has experience with a municipality which includes knowledge that variances have been easily granted in the past, and he can get an early indication from staff that they would support the variance, then the developer can risk investing in the costs of planning the expanded project before the variance is granted. Then, in their request to Council for the variance, they can claim that they have invested in architectural and engineering fees for the project and turning down the variance and making him/her redesign will be another hardship for the developer.

Unfortunately, I don’t know of anyway to write into the bylaws a way to prevent a Council from caving to this pressure. There are good reasons to allow variances but more times than not, variances are misused. It takes both an understanding and commitment to the planning laws, and a political strength developed through experience, for a Council to understand what is happening and to set a standard early in their term.

It also takes a public that understands the by-laws to hold the Council and their staff accountable.

One section we added to the Iqaluit bylaws was a list of tests to which a variance request must measured against. These tests really served the purpose to remind staff and Council what a variance is and why a variance should or should not be considered. It is a common mis-understanding among elected officials (especially less experienced Councillors) on why there is a provision for variances and how they should be used. Variances are not a method to get around bad design nor are they to make a project economic.

I will try and find the wording we used in the bylaws in Iqaluit and forward them on.

Keith Irving March 14, 2008