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Why Mount Pleasant Needs More Density

12/16/2016 07:46 EST | Updated 12/16/2016 07:48 EST
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Vancouver

Growing up, my grandmother would tell us stories about Southeast False Creek - about the dirty water and polluted air. Back then, the area was a heavy industrial hub on the outskirts of the city core. But in my lifetime the neighbourhood has changed dramatically, evolving from heavy to light industry to an industrial hub of a very different kind -- a destination for high tech companies and creative, sustainable industries.

This transformation has ramped up in the last three years and the area is now finding its identity as a hipster home to innovation in manufacturing, media, design and tech. Along with this transformation has come a new demand and pressure for office and manufacturing space. To accommodate that, both the City of Vancouver and developers need to work together to provide some suitable options and solutions. We need to think bigger than accommodating just the short-term demand from the tech sector.

This week, a policy report to City Council on proposed zoning changes in the area was approved and referred to a public hearing in January. The City has been seeking public input on these changes for the past couple months. The report recommended replacing outdated zoning and development by-law definitions to better reflect the current range of digital and technology business activities in the area, in addition to creating of two new industrial zones and the rezoning of four blocks east of Quebec Street to allow larger and taller buildings to support and grow the innovation economy.

This new plan is good, but it needs to be much bigger and more ambitious. The proposed increase in density won't provide enough supply needed for the growing number of high tech companies clamoring for office and production space in Vancouver.

According to statistics compiled by CBRE, 58% of new office space demand is coming from tech in Vancouver, up from 20% in 2013. And that's just the current demand. It's a high growth industry with an insatiable demand for more office and manufacturing space. The recently published 2016 B.C. Technology Report Card shows the tech sector grew by more than 14 per cent in the past two years, far outpacing growth rates in Ontario and Quebec and even the U.S. market.

The B.C. tech sector now accounts for $26 billion in revenue, $15 billion in GDP, 92,700 employees and $8 billion in wages. Yet, the B.C. tech sector is still small compared to other areas in the US. Oregon's tech sector alone, for example, was responsible for around 23% of the state's GDP, compared to just 6.5% in B.C.

Why? High tech companies needs buildings with large floor plates. The City says it has restricted the additional density to this small area in Mount Pleasant because they want to be able to add supply and density in other innovation economy nodes elsewhere like Yaletown and Gastown. But Yaletown and Gastown character buildings are simply too small and difficult to redevelop. Mount Pleasant and False Creek Flats are ideal areas to accommodate larger high tech company requirements.

Vancouver needs to be able to attract large job creators. With their proposed new rezoning, the City estimates a maximum potential of 500,000 SF of new digital and tech office space will become available and they are worried that any more would create a supply glut. That is unlikely to happen. It's not even enough to create the supply needed now. The current demand for office space from the tech sector is for approximately 859,000 SF and that's just a drop in the bucket of what's to come.

"The nature of industry is changing. Instead of hammers and saws used by workers in my grandmother's time, they are using computers and servers. Their new tools are keyboards and processors."

The most remarkable aspect of the B.C. tech story has been the growth in jobs and wages. Tech jobs earn wages that are 76-per-cent higher than the average B.C. wage. At an average of nearly $82,000 per year, tech jobs represent one of the few safeguards against rising affordability issues.

That's why business is booming in Mount Pleasant. We've been working in the neighborhood for decades and we have seen the changes. One of our buildings, formerly home to Mountain Equipment Co-op headquarters, was recently refurbished to house Double Negative, an award-winning, visual effects company with over 400 employees.

Their modern new space featured in this Huffington Post story, boasts a café, a movie theatre and beautiful, modern offices for their growing staff. Their office is west of Quebec is outside of the proposed area, highlighting the need for the whole area to be reviewed for upzoning. And there are an increasing number of film companies, medical research teams and digital businesses demanding space in the area daily.

"Everyone recognizes the attributes of the area," says Chris Newton, VP at Cushman & Wakefield. "Proximity to downtown, at the juncture of 3, soon to be 4, rapid transit lines and yet if you look around the world, to New York or San Francisco, their gentrified industrial areas need more density. And yet here, we have low or underutilized density with restrictive zoning."

According to Newton, the limited supply of industrial and office space has led to a dramatic rise in prices because high tech businesses "want to be here." For many start-ups, that means prices have become prohibitively expensive. "We talk about supporting high tech as a city," says Newton. "But we have a space problem. It doesn't mean opening the area to residential, but to a relaxation of business uses, not just light industrial."

The nature of industry is changing. Instead of hammers and saws used by workers in my grandmother's time, they are using computers and servers. Their new tools are keyboards and processors. It's time for our city to accommodate these new businesses in visual effects, production, architecture, engineering, design and creative industries.

Without an increase in density and supply of new industrial and office spaces, the growth in Mount Pleasant will be limited. The City needs to apply its new high-density policy beyond the small rectangle of land east of Quebec. The same needs exist for the whole neighborhood, not just one small strip.

While the City's current rezoning process is a welcome first step, in order to truly become a green city of technology innovation that is home to world leading companies, we need more space, and we need to be more ambitious in welcoming those jobs.

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