A proposed high-density development on the Victoria-Oak Bay border will either destroy the neighbourhood’s ambience—or help save the planet.

WHO COULD OBJECT TO A MULTI-DWELLING PROJECT that—according to the developer—encourages walking, helps solve the climate crisis and eases housing pressures?

“The project enables a high quality, densified, compact, walkable lifestyle which is critical to solving our climate and housing crisis [sic] all while creating more livable and healthier communities,” said Aryze Developments in a January 20, 2021 letter to the City of Victoria.

Some neighbours in the Foul Bay Road-Quamichan Street area don’t see it that way, believing that the 18-unit townhouse project on a small lot adds too many dwellings, means the removal of too many trees, and will damage the neighbourhood’s ambience. Some are also very unhappy with what they regard as an attempt to intimidate them into supporting the development.

The property

The lot at number 902 sits just where Foul Bay Road, heading south, departs Oak Bay and ventures into the Gonzales neighbourhood of Victoria, where it remains before ending at Gonzales Beach.

The property at 902 Foul Bay Road is a familiar one to those who follow heritage properties and to fans of large urban trees. The 1911, two-storey, cross-gabled house was reminiscent of a country estate, with an external granite chimney and a two-storey verandah nearly encircling the house, according to information from the Victoria Heritage Foundation. A heritage designation awarded in 2003 included the property’s rock wall and landscape. 

The heritage designated house that occupied the site until 2016

Large and Co. purchased the property in 2014 with hopes to develop some townhouses on the property, though also preserving the house. The company subsequently applied for a demolition permit and removal of the heritage designation, citing contamination from mould, feces and urine: the house had been unheated for two years and housed an estimated 100 cats. 

In 2015, the City of Victoria’s heritage panel recommended that the council reject the request to demolish. But in January 2016—before the City council had determined its fate—an unexplained fire badly damaged the house. 

One year later, Victoria police arrested Earl Large (who heads sales for Large and Co.), holding him in jail overnight. Large was released without charges the next day, because the Crown did not approve charges. Following the fire, the remains of the house were demolished.

The 0.503 acre lot is currently assessed at $2,566,000, and is now owned by Lions West Homes Ltd, with Aryze as the developer. It is currently zoned R1-G, which permits four single family houses. Each is allowed one accessory use, such as a secondary suite. For the proposed development to proceed, the property would need to be rezoned to permit multi-family dwellings, as well as be granted a development permit.

The project

Aryze is a Victoria developer, active in numerous area projects from infill housing to the Telus Ocean office building. The privately-held company proposes to build 16 three-bedroom and 2 one-bedroom townhouses at 902 Foul Bay, according to the latest version of the project posted on the City’s website, dated January 20, 2021. The average size of the units is 1,100 square feet. These would be contained in two three-storey structures.

An illustration of Aryze’s proposed townhouse project at the corner of Foul Bay and Quamichan

An aerial illustration of how the proposed development will occupy the 1/2-acre site

Aryze says it has applied to the BC Housing Affordable Home Ownership Program (AHOP), which would allow prices to be reduced by from 5 to 20 percent for eligible buyers, in part by providing interim construction financing at reduced rates.  To support what it calls “middle income” families, BC Housing would hold the second mortgage to cover its contribution. There are a number of hurdles to be passed before BC Housing approves a project under AHOP.

For instance, community support for the project should be “evident,” and projects should be “consistent with official community plans and strategies,” according to AHOP’s published principles. As well, the townhouses would not be available to the open market. Ineligible are any would-be purchasers who already own or part-own a dwelling anywhere in the world. To buy an AHOP dwelling, purchasers must currently be in rental or other non-tenureship housing, must be Canadian citizens or permanent residents, and must have lived in BC for the past 12 months. These rules apply to everyone on the title of a townhouse.

In addition, buyers are limited by household income, which cannot exceed the 75^th income percentile of BC families with children—currently $163,220—for those purchasing a three-bedroom unit. For one-bedroom units, their household income must not exceed the 75^th percentile of BC families without children—currently $116,330. As of March 13, 2021, 902 Foul Bay Road had not been approved for the AHOP program.

To give an example of the strength of these restrictions, somebody just arrived from Ontario, would not qualify, even if living in a tent. A family that part-owns a quarter-acre lot in Australia or earns $164,000 annually would also be ruled out. It remains to be seen how many prospective buyers there are who both meet the stringent qualifications and can afford to pay the mortgage.

Aryze principal Luke Mari has said the three-bedroom townhouses would sell for $725,000 each, assuming that the project is approved under AHOP for the maximum 20 percent of the project’s market value. This means that the market value is 5/4 x $725,000 = $906,250. If, on the other hand, AHOP covers just 5 percent, the selling price would be $860,937—or approximately $136,000 more than the $725,000 figure quoted by Aryze. In an email, Mari responded, “Even though the BC Housing AHOP program allows the discount to be anywhere from 5-20 percent, we have committed to the City and BC Housing to use an income test methodology instead. This would cap the sale values of the one-beds at $375,000 and the three-beds at $725,000. This will be secured by a tri-party agreement should we move past committee of the whole.”

Neighbours have expressed concerns about added traffic resulting from the addition of 18 new housing units, as well as parking issues. 

To judge by the latest version of the proposal, Aryze appears to be bending over backwards to support cycling over driving. The proposal includes a bike repair station and 36 bike stalls, but just 16 places to park a car. As well, it is promising 18 memberships in the Modo car-sharing service. Aryze claims there are no fewer than 841 street parking stalls within a five-minute walk. The proposal does not state how many of those stalls are already occupied much of the day.

Signs like this abound throughout the neighbourhood

Aryze proposes to plant 39 trees, of which 21 would be native, including 4 Garry Oaks. At the same time, it will remove 7 existing Garry Oaks, and two much-admired mature Copper Beech trees, among others. This has led to some of the most vociferous complaints, with signs throughout the neighbourhood proclaiming “Save the Trees at 902 Foul Bay.”

Responding to criticism of the proposed tree-cutting, in an August 20, 2020 letter to neighbours, Mari said: “We take no pleasure from cutting down trees.” However, he added, “to retain all trees on the property, only a small single building can be built.” Mari also commented on the beech trees. “The two large beech trees, while beautiful, are in declining health and are non-native species,” he said in the letter, which did not mention the fact that nearly half of the promised new trees would also be non-native.

Heritage concerns

Though the house is now gone, the property’s landscape heritage designation means that any development project must still pass muster at the City of Victoria’s Heritage Advisory Panel. At the panel’s November 10, 2020 meeting, chair Pam Madoff—a longstanding heritage advocate—asked about the proposed removal of the beech trees. 

In response, architect Erica Sangster told the panel that the trees grow in a “challenging part of the site,” according to minutes of the meeting. “We tried to keep one of the copper beeches, but it was not in the best health,” added Sangster. “We had to choose which had to be removed. Ultimately both would need to be removed.”

In the end, the development sailed through, with five voting in favour, and just Madoff opposed.

In a later interview, Madoff told Focus that it’s rare for a property owner to designate the landscape, and she wants to honour that decision. “We are the stewards of that intention,” she says.

The treed property at 902 Foul Bay Road, with two large copper beeches

The loss of the two beech trees was a particular concern. “I just felt that there was not enough attention paid to the mature trees on the site,” Madoff says. Though not native, the beeches are a significant feature of the site, storing significant quantities of carbon that new trees would not.

Monique Genton is a neighbour of the proposed project who would also like the older trees to remain. “There’s value in mature trees, even if they’re not native,” says Genton, a member of UVic’s Native Plant Study Group, and who is registered as a native-plant salvager in Saanich. She adds that the beech trees are very much loved by the neighbours. “The best tree is the one you’ve got.”

A $2 million neighbourhood?

In arguing that the 16 three-bedroom town homes will sell for $725,000 each, Mari said they would be far cheaper than the $2.1 million he says is the average price for a three-bedroom house in the neighbourhood. To some, that $2.1 million figure is on the high side.

Madoff, for one, questions Mari’s claim regarding local house prices. “I thought that was very misleading,” she says, adding that the average price is likely much lower. A check of assessed values in the immediate area lends support to the view that the Aryze claim is far too high. 

BC Assessment lists nine properties as “neighbouring” 902 Foul Bay. Of these nine, just three are three-bedroom; one has two bedrooms. The average assessed value of these four properties is $971,624.

Only four properties adjoin 902 Foul Bay, all on the north side. The 910 Foul Bay Road address consists of two properties, one of which has a 2,236-square-foot house; the other is vacant. The two properties are currently assessed at a total of $1,249,500. On Hawes Road, a small cul-de-sac that runs off Redfern Street, sit 1940 and 1946 Hawes. They are assessed at $846,000 and $910,000 respectively. 

The property at 910 Foul Bay that adjoins 902 makes for an interesting comparison with the Aryze proposal. The single house on the two properties at 910 occupies 0.47 acres, just less than 902’s half-acre. Put another way, this means that the Aryze proposal would result in 18 times more dwellings on roughly the same size lot as its only immediate, single-family, Foul Bay Road neighbour. One concern for neighbours is that if the Aryze proposal is approved by the City, it might set a precedent for subsequent redevelopment of nearby properties.

The covenant: A hindrance or irrelevant?

There is a longstanding covenant executed against the title of 902 Foul Bay Road, and approximately 100 neighbouring properties. Registered October 24, 1924, the covenant reads as follows: “No building is to be erected upon any lot other than a private dwelling house with suitable outbuildings; and no dwelling house to be erected upon any lot adjoining or fronting on Foul Bay Road shall cost less in erection thereof than Four Thousand Dollars ($4,000.00) and on other lots not less than Two thousand dollars ($2,000.00).” (The minimum prices for houses seems positively laughable in today’s runaway real estate prices; they reflect typical prices of nearly a century ago.)

Such restrictive covenants remain in effect when the property passes on to successive owners. This feature of covenants is often referred to as “running with the land.” 

If enforced, this restrictive covenant may well rule out 18 townhouses on the lot. Or does it?  Mari claims that some other properties covered by the covenant already violate it, since they have basement suites.

Answering a question from Focus, Mari says the effect of the covenant is “unclear” regarding townhouses. “The covenant restricts the property to ‘private dwellings,’ but does that exclude townhouses?” Mari says in the emailed response. He adds, “The Strata Property Act did not exist at the time of drafting. Under property law, a strata townhouse is a form of private dwelling.” 

With regard to the trees, Mari notes, “the private covenant does not save the trees as the existing zoning rights allow potentially even broader tree removal in order to build out the four single-family dwellings under existing zoning.”

In general, the practical impact of restrictive covenants is questionable. Many are found in older neighbourhoods, even predating zoning bylaws. Sometimes, they are placed by developers as a selling point, in an attempt to control the neighbourhood. They are technically separate and apart from anything the city does. Municipal governments are not obligated to abide by them, though some cities do take note of them in deciding on a proposal. In the case of Victoria, a City official told Focus the City ignores restrictive covenants in determining the fate of a proposed development. The only exception is when the City is a party to the covenant; in the case of 902 Foul Bay Road, it is not.

Are restrictive covenants immutably attached to the properties they govern? The short answer: No. Under BC’s Property Law Act, a court may discharge a restrictive covenant. Section 35 of the Act lays down a number of conditions under which a restrictive covenant can be set aside. How difficult is that? According to an in-depth 2012 report on restrictive covenants for the British Columbia Law Institute, the threshold for modifying or cancelling a restrictive covenant under section 35 is “quite high.”

Said the report: “The courts will not exercise the powers given by section 35 lightly, recognizing that a restrictive covenant is a valuable property right.” The report notes that restrictive covenants have been seen as “a useful means of protecting valuable interests connected with the use and enjoyment of land at a localized and private level that public planning does not reach.”

On January 22, 2020, 902 Foul Bay Road property owner Lions West Homes Ltd filed a petition asking the BC Supreme Court to discharge the covenant. In support, Lions West lawyer Lindsay LeBlanc cited changes in the nature of the neighbourhood, as well as the covenant’s “impediment of practical use.” The petition claims that since the covenant was signed, “the neighbourhood has experienced significant densification with the restrictive covenant not being followed or enforced.” 

Noting that 31 of the approximately 100 lots to which the covenant applies have more than one dwelling, Lions West said in the petition that the restrictive covenant is now “obsolete,” and “is unreasonably impeding the petitioner’s plans to build on the property.” 

Representing a number of area residents, lawyer Kyle Hamilton filed a response to the Lions West petition on June 24, 2020. In the response, the neighbours said that the covenant provides them with a such practical benefits as natural beauty, the park-like feel of backyards due to the collective view of all yards together, peaceful setting of their homes, established green space, uniform visual appearances, low turnover rate of owners, and a sense of neighbourhood.

In the court filing, the neighbours said that removing the covenant would lead to loss of privacy, increased residential noise and traffic, loss of the neighbourhood’s current character, removal and destruction of green space, and their uniform park-like view replaced with three storey, multi-family units.

To the surprise of neighbours, on August 13, 2020—less than two months after the response was filed—Lions West asked the court to adjourn hearing the petition. Asked in March 2021 for the reason, Mari provided a single sentence in an email to Focus: “It was adjourned to gather additional material as requested by the respondents.” 

A threat? Or helpful advice?

A letter from Aryze, headed “Common Questions and Answers” was distributed to residents served with petition materials in February 2020. It said that Aryze was pursuing removal of the covenant because there is a “potential grey area” between the proposed development and the covenant. “As such, we are pursuing the removal of this covenant for clarity moving forward,” said the letter.

The Aryze letter also contained what some recipients regard as a threat. Said the letter: “While not ideal, we should note that if property owners decide to pursue legal action to oppose this discharge, and we are successful in the removal through the courts, we will be seeking legal compensation from those opposing property owners due to the added costs of additional court processes.”

In their response filed with the court, the neighbours said the letter had two purposes. Quoting from the court filing, these are:  

“(a) To downplay the significance of the petition and what Aryze was seeking to do with the covenant and

(b) threaten the respondents with possible financial repercussions should they oppose the removal of the covenant and lose.”

Heritage advocate Madoff is not happy with Aryze’s statement that it will ask the court to order that opponents pay costs. “A letter like that would be very unsettling,” Madoff says. “The threat of an award of costs would be terrifying.”

Asked for a response to residents’ concerns about that section of the letter distributed to the respondents, Mari said the following:

“I can say with absolute sincerity, this portion of the letter was to give residents a clear understanding of what they were getting into,” Mari said in an email. “If they didn’t oppose, it’s a 3-4 week process to discharge the agreement, $5,000 in fees kind of thing. If they chose to oppose, it takes months and months and tens of thousands of dollars in legal fees. We take no joy in these situations and even conveyed that in a follow up letter that we welcomed their right to oppose but the added time, complexity, and costs then afforded us via the Courts to recoup some of those costs.”

A neighbourhood website has been seeking donations to help cover legal costs.

How many is too many?

Despite their court-filed objections to the project, some neighbours regard an increase in density as acceptable. Neighbour Peter Nadler says that while some want no more than what current zoning allows on the site—four single-family houses—others would accept some densification, as long as most of the trees are preserved. “We have to accept increased density,” says Nadler, speaking for the second group. “What we’re after is balance.”

Focus asked Mari if he would consider fewer townhouses on the property. He replied: “Yes, we could provide less homes on the property, but it would mean that we would be unable to provide 100 percent of the project under the BC Housing Affordable Home Ownership Program, which offers homes at more than 20 percent below market rates,” he said in an email. 

He also stated: “Regarding neighbour feedback, we have found some inconsistencies. On one hand some claim to express support for added density on the property but then are also seeking to enforce a restrictive covenant that limits the project to no added density, as the covenant supports the existing zoning to build four single family homes which will certainly be priced at well over $2m each. So we are left wondering which is it?” 

What’s next?

The development proposal is expected to soon head to the City of Victoria’s committee of the whole to decide whether it merits proceeding to a public hearing. 

Aryze is well known to council members from numerous development proposals as well as its recent spearheading of a project to re-purpose shipping containers as tiny homes for 30 homeless citizens.

As with other developers, Aryze officials were generous in their support for some candidates during Victoria’s 2018 municipal election. Mari donated $500 to the campaigns of successful council candidate Marianne Alto and Mayor Lisa Helps, according to Elections BC records. A $500 donation to Councillor Jeremy Loveday was declined by Loveday. Mari also gave to unsuccessful candidates Anna King ($500), and Grace Lore ($485.20). In addition, Aryze staffer Ryan Goodman donated $500 to Helps, and $485.20 to Lore. Donations to Victoria candidates from both Mari and Goodman in the 2018 campaign totalled $3,470.40.

These donations fall well below the permitted limit. Elections BC rules set maximum individual donations to a single local election candidate at $1,200 for 2018. (Only individuals may contribute to candidates for municipal councils; companies, unions and other and organizations are now banned from reimbursing individuals who make campaign contributions.)

While some claim donations from developers put council members in a conflict of interest, a recent ruling from the BC Supreme Court confirmed donations to local election candidates do not in themselves restrict successful candidates from voting on donors’ projects. Two lawyers with Vancouver-based law firm Young Anderson, Kathleen Higgins & Sarah Strukoff analyzed the court ruling in a January 12, 2021, report. “In summary, this case, along with others, suggests that a campaign contribution made by a developer, assuming it has been accepted in accordance with other applicable legislation such as the Local Elections Campaign Financing Act and even if made while the developer has an ‘in-stream’ application before council, is not a ground in and of itself for a disqualification of a council member on the basis of the conflict of interest provisions in the Community Charter.”

Asked when he expects to see shovels in the ground, Mari replies: “In an optimistic world, Fall 2021.”

As an intense wave of high-density development sweeps through Victoria, Madoff is troubled by what she sees as a common attitude about new projects, the mistaken view that there is no such thing as bad development. Says Madoff: “I really care about what’s happening to this city.”

Russ Francis admits to liking both houses and trees—not necessarily in that order.