A Land Use Bylaw application to pilot a change of use that would not restrict the length of stay in visitor accommodation units will not result in large numbers of units becoming homes for full-time residents, according to a Canmore developer.
Doug Churhill, VP of planning and construction for Devonian Properties ,the managing general partner in Deep Powder, which made the LUB application, said there is no historical basis for a major shift to residential use.
More importantly, he told council at a recent public hearing the application is about far more than just selling units.
“This application is not just about the developer’s marketability of unsold visitor accommodation units, it is also about finding a land use with enough flexibility to make better use of our tourist accommodation properties,” he said. “If tourism is the long-term basis of Canmore’s future sustainability and tourist accommodation doesn’t adapt to the changing trends in travel, the outcome will be compromised.
“The greatest liability for the community comes from vacant hotel units.”
Churchill said reduced occupancies at hotels and lodges, reduced commercial tax revenues and missed opportunities through the whole hospitality sector are a result.
As for concerns the units would turn into permanent residences, he pointed to the fact they are taxed commercially as one disincentive to do so.
“This is still a commercial use and is assessed at the commercial tax rate which is approximately triple that of residential,” he said, adding there are no tax relief options available to owners.
Churchill said of tourist home units in the Lodges development, where full-time residential occupancy is permitted, only between 10 and 20 per cent have seen residential tenancies.
He said it is likely the extended-stay visitor accommodation use proposed for the Lodges would see fewer than that percentage used as residential units.
He said the area is less attractive as a full-time residential use because it does not have the same amenities as residential neighbourhoods in addition to the commercial tax rate.
There was some concern expressed by council at first reading that a loss of visitor accommodation units cannot be sustained.
Churchill pointed out there is substantial undeveloped and under developed land along Bow Valley Trail.
“Redevelopment will occur based on demand and property values,” he said.
Churchill also said a direct control bylaw for the one hotel project is necessary as it gives the municipality a chance to test out the new type of zoning and keeps council as the sole approving authority.
“The municipality is concerned about effects of the bylaw if enacted globally and a test period on a localized area is not unreasonable,” he said.
One aspect of the visitor accommodation extended stay zoning is that it requires units to be in a managed rental pool even though it does not restrict length of stay.
Currently, visitor accommodation units have no requirement to be part of a rental operation and may be kept for personal use by the owner.
The changes in the marketability of these units, added Churchill, have seen their market value drop over the last four years.
Gary Buxton, manager of planning, said from 2009 to 2011 condo hotel units have seen an average assessment reduction of 25 per cent. He added traditional hotels have also seen a decrease in assessed value of 33 per cent in that same time.
While the Town still collects the same amount of property taxes with the decreased assessment values by altering its mill rates, that may be difficult to sustain over time if values continue to drop.
“This is a long-term problem that will only be resolved with a normalized lending environment,” he said.
He said hotel condo developments such as the Lodges are hybrids that recognize a large part of the tourism market is looking for longer lengths of stay and full service properties. They are investments for owners that provide potential short-term rental income along with personal use.
“There is no community benefit to empty visitor accommodation units,” Churchill said, adding increased use is also an increase for the hospitality and service sector.