TOWNSHIP OF ESQUIMALT STAFF REPORT
MEETING DATE: April 20, 2026 Report No. DEV-26-013
TO: Committee of the Whole
FROM: James Davison, Manager of Development Services
SUBJECT: Small-Scale Multi-Family Housing (SSMFH) Impact Assessment Options Report
RECOMMENDATION:
Recommendation
That the Committee of Whole recommend that Council direct staff to bring forward amendments to Township bylaws related to Small-Scale Multi-Family Housing as described within Report No. DEV-26-013.
Body
EXECUTIVE SUMMARY:
On September 8, 2025, Council passed a motion to “…direct staff to bring forward a project impact assessment for a review of SSMFH zoning and procedures in order to streamline and adjust requirements, including consideration of the impacts on neighbours, future tree canopy, parking, and alignment with the Official Community Plan.”
The intent of this report is to describe options to achieve Council’s desire to explore further amendments to the SSMFH zoning and regulations. The impact with respect to cost, schedule and current commitments are also described.
BACKGROUND:
In November 2023, the Province of British Columbia adopted Bill 44 - Housing Statutes (Residential Development) Amendment Act, 2023, establishing new requirements intended to increase the supply of small-scale multi-unit housing (SSMFH/SSMUH) within areas traditionally zoned for single-family and duplex dwellings. The legislation requires local governments to permit between three and six dwelling units on most residential lots, depending on lot size and proximity to frequent transit bus stops.
In June 2024 the Township implemented the required SSMFH program by zoning overlays for restricted zones (single family and duplex development, excepting lots within the Tsunami Hazard Zones). This is attached as Appendix A. The RSM-1 and RSM-2 zones (attached as Appendix B and C, respectively) largely follow the Provincial recommendations for site standards, in part due to the anticipation of provincial and federal standardization templates being made widely available and adopted by homeowners and the development industry (Appendix D and E, respectively). The Township largely followed the provincial recommendations, with a few exceptions. The following table illustrates the provincially recommended site standards compared to the RSM-1 and RSM-2 zones.
Staff have made the following observations which are intended to support Council’s decision-making on revisiting the SSMFH regulations:
1. There has been no use of the Province’s Standardized Housing Designs Catalogue or the CMHC’s Housing Design Catalogue in the Township. The purpose of these catalogues is to provide landowners with free designs that meet the Building Code which increases efficiency by reducing costs and time to develop SSMFH. Staff would examine these catalogues as part of the review process to see if the current zoning is acting as an impediment to implementation of the standardized designs.
2. Now that some projects are being constructed, neighbour complaints around height, massing, shading, parking, overlook, setbacks, lack of consultation, and other related issues are being received by the Township.
3. Many of the more jarring contrasts in height and massing between existing housing stock and new SSMFH development are in neighbourhoods where adjacent single-family houses are one storey in height; single storey houses are quite prevalent in many neighbourhoods in Esquimalt even as the zoning permits 2.5 storeys (7.3m in height for principal buildings).
4. Other municipalities either have reviewed or are preparing for review of their regulations and policies as they are experiencing similar issues.
5. The Township will be required to accommodate SSMFH developments of up to six units with no permitted parking within 400 m of each bus stop along provincially recognized frequent transit routes. This would apply to routes 14 and 15 (along Craigflower Road and Esquimalt Road, respectively) as they met the frequent transit threshold on January 5, 2026. The provincial government has provided the following guidance about updating the Zoning Bylaw and Parking Bylaw to meet the requirements of Bill 44:
As more bus stops meet service levels that meet or exceed the transit frequency and timing, local governments could harmonize zoning updates in alignment with the legislated five-year proactive planning requirements (next update 2030). However, there may be unique circumstances which require local governments to make amendments outside of the proactive planning cycle. Local governments should seek their own legal advice as necessary.
Given that the frequent transit routes are currently in place, staff are proposing to incorporate the required zoning bylaw amendments related to frequent transit routes as part of the package of amendments presented to Council.
6. Staff note that some applicants desire to build full-featured higher-end ground-oriented townhouse units, some on properties which have difficulty supporting the proposed housing form. This includes one or more parking spaces per unit, multiple access points on one road frontage, private outdoor spaces with the expectation of privacy, no common usable outdoor space provided, and so forth. While this helps to increase housing supply and provides more housing options for residents, it does not directly increase housing affordability or livability.
7. On October 9, 2025, the Honorable Christine Boyle, Minister of Housing and Municipal Affairs, sent a letter to all mayors thanking them for their hard work to implement SSMFH legislation (Appendix I). In the letter, she stated:
I strongly encourage all local governments to align with the Provincial Policy Manual and Site Standards, which provides clear expectations for zoning amendments, site design, and development feasibility.
Staff interpret that this letter is a signal that the province intends to strengthen the regulations related to Bill 44 to ensure compliance with the intent of the legislation. Some municipalities have been acting outside of the intent of Bill 44 to use local government powers to set up barriers that make it difficult for landowners who wish to develop SSMUH on their property; staff expect that this will be more difficult to achieve in the near future.
8. The City of Burnaby is likely the most relevant example of a municipality that has recently amended their Zoning Bylaw in relation to SSMUH. The City of Burnaby created their SSMUH zones in 2024 and amended them in October 2025. The amendments included:
a. A reduction in height from 4-storeys to 3-storeys for the front building and a maximum height of 7.5 m / 2-storeys for the rear building.
b. A minor reduction in lot coverage.
c. A minor Increase in some setbacks.
d. A modest reduction in impervious surface.
Burnaby’s current R1 SSMUH zone is attached as Appendix F, including redlined changes made in the amendments. Staff consider the Burnaby approach to be a good approach for possible amendments to Esquimalt’s SSMFUH zones.
ANALYSIS:
To address Council’s expressed areas of concern, the following issues need to be examined while continuing to maintain the viability of construction of SSMFH developments:
1. Consideration of the impacts on neighbours
Minimizing the impacts on neighbours means the possible reduction of height, site coverage, setbacks, tree removal, overlook, and street parking overflow. Staff could look at the viability of making the following changes to the zoning bylaw:
• possibly reducing the height of second, rear buildings to two storeys, or stepping down in the rear with one building.
• Increasing setbacks, likely external side yard setbacks.
• Reducing site coverage slightly.
• Increasing parking requirements.
• Lowering maximum building heights (from 11m to 10m).
• Adding a maximum FAR (currently there is none).
2. Future tree canopy
Maximizing tree canopy means potentially altering setbacks to protect on-site trees, reducing site coverage, increasing impervious surface minimums, and minimizing driveway crossings in the boulevard to protect boulevard (off-site) trees.
• Staff could look at these changes to setbacks, impervious surface requirements, and site coverage.
• Staff will recommend maintaining the maximum access of one per street frontage, noting that each additional site access removes a street parking spot.
3. Parking
The increase of on-site parking will reduce the impacts of increased street parking. Currently the minimum parking standard for SSMFH is 0.5 spaces per unit. Staff could look at increasing the parking requirement (as per Burnaby) to as much as 1 space per unit, noting that this will have potential impacts on affordability, site coverage, tree retention, viability of developments (parking is expensive and often the metric which determines a project’s viability, both financially and from a site design perspective).
4. Alignment with the Official Community Plan (OCP)
In their resolution, Council included a review of alignment with the Official Community Plan. Staff have noted that there are several parcels that have SSMFH zoning but are designated for higher densities on the Proposed Land Use Designation Map in the OCP. This creates a policy tension in that there are two opposing policy directions for a single parcel of land. As part of the alignment process, staff can look at options which meet provincial legislation and which better align the SSMFH zoning overlay to OCP Proposed Land Use Designations. Mapping with the Proposed Land Use Designation and the SSMFH zoning overlay is attached as Appendix G.
OPTIONS:
1. The option that appears to match Council’s intent best is to explore Burnaby-style amendments to the SSMUH zones. This would involve preparing draft amending bylaws and bringing them forward to Council for discussion. This work could be completed without additional budget, before August 2026 and within staff’s current work plan. Should Council wish to proceed with this option, the following resolution is recommended:
That the Committee of Whole recommend that Council direct staff to bring forward options for amendments to Township bylaws related to Small-Scale Multi-Family Housing that streamline and adjust requirements, as described within Report No. DEV-26-013.
2. Council could explore amendments that stretch the intent of the provincial guidelines, or set policy within any current gaps in the provincial guidelines, as some other municipalities have done. This approach would diverge from the direction expressed by Minister Boyle in her October 9, 2025, letter (Appendix I). This approach also diverges from Council’s initial intent, which was to undertake the work to “streamline and adjust requirements” rather explore more extensive policy changes. Following this approach would require in-depth Council discussion fleshing out desired policy changes, followed by further land use and legal analysis. Costs for such an approach are uncertain, but the schedule is expected to be 6 - 12 months of work and will likely impact other work in the Development Services work plan. Staff observe that this approach likely has little return on investment of time and effort, and is therefore not recommended. Should Council wish to proceed with this option, the following resolution is recommended:
That the Committee of the Whole recommend that Council direct staff to bring forward more extensive amendments to the SSMFH related bylaws.
Depending on the scale of the proposed changes, it could take staff between 6 and 12 months to complete the required work.
3. That the Committee of the Whole recommend to Council that Staff Report No. DEV-26-013 be received for information.
COUNCIL PRIORITY:
Housing
FINANCIAL IMPACT:
No financial impact.
COMMUNICATIONS/ENGAGEMENT:
Staff have, and will continue to, listen to the development community and their feedback on what makes projects viable in the marketplace. In turn, staff have and will continue to listen to the public and adjacent residents to determine what is impacting them the most and what changes would best mitigate those impacts.
TIMELINES & NEXT STEPS:
Depending on Council’s direction, staff will return to Council with proposed changes to SSMFH regulations (including recommendations for an anticipated requirement for frequent-transit adjacent, six-unit, zero-parking SSMFH developments required by Bill 44) before August 2026.
REPORT REVIEWED BY:
1. Bill Brown, Director of Development Services, Reviewed
2. Sarah Holloway, Manager of Corporate Services, Reviewed
3. Ian Irvine, Director of Finance, Reviewed
4. Dan Horan, Chief Administrative Officer, Concurrence
LIST OF ATTACHMENTS:
Appendix A SSMFH Zoning Overlay Map
Appendix B RSM-1 Zone
Appendix C RSM-2 Zone
Appendix D Provincial Templates
Appendix E Federal Templates
Appendix F Burnaby change to SSMFH zoning (redlined)
Appendix G SSMFH Zoning Overlay and OCP Proposed Land Use Designation
Appendix H Staff Presentation
Appendix I Letter From the Honorable Christine Boyle, Minister of Housing and Municipal Affairs, Dated October 9, 2025