City may hike development cost charges

Developers could be facing steeper development cost charges (DCCs) if city council approves a proposal to raise the charge on residential projects, and that’s not sitting well with Coun. Doug Graham.

Developers could be facing steeper development cost charges (DCCs) if city council approves a proposal to raise the charge on residential projects, and that’s not sitting well with Coun. Doug Graham.

“Is it really necessary at this time?” he asked at Monday evening’s city council meeting when planning manager Mike Gau brought the proposal forward.

The charges, Graham argued, act as a disincentive to local developers. They also end up adding to the cost of a home, making it even more difficult to find affordable housing in the city, he added.

Jacking up the fees, Graham said, is not something he sees helping the city at all.

The charges on new developments are in place to help deal with the increased infrastructure needs that come with growth, such as roads, water and sewer projects and parks.

“DCCs are a tool to finance growth-related infrastructure that otherwise would need to be paid for using tax revenue,” notes Gau’s report to council.

“The concept behind DCCs is that growth creates new demand for municipal infrastructure and services, and that growth itself should assist with funding of growth-related services.”

The proposal would see DCCs go up to:

• $3,500 per dwelling in single-detached (including manufactured homes) and on country residential lots with city services from $2,500 and to $2,000 per living suite from $1,500;

• $1,750 per dwelling from $1,250 on country residential lots not serviced by municipal services and to $1,000 per living suite from $750 per living suite;

• $5,500 per two duplex units on duplex lots from $4,000;

• $2,500 per dwelling from $2,000 for row housing and multiple-detached dwellings; and

• $2,000 from $1,500 per dwelling for apartments.

While the bylaw governing DCCs was last amended in 2005, most of the fees haven’t changed since they were originally created in 1995. It’s generally recommended that cities across Canada update their DCC bylaws every five years, Gau told council.

Along with the fee increases, city staff are proposing to change the definition of living suites to include those in detached structures and to delete the fees from the bylaw so that, like other fees, they will only be referred to in the fees and charges bylaw.

Prior to Graham’s comments, in his report, Gau pointed to studies by the Canada Mortgage and Housing Corp. that have found such fees are directly linked to the cost of housing and affordability.

“They also found that DCC’s are the largest cost component of government-imposed costs,” the report states.

“When updating the DCC rate, the city must balance the risk of deterring development with the risk of not being able to adequately finance the expansion of growth-related infrastructure.”

The current rates, Gau noted, don’t reflect inflation, higher construction costs and the growing population.

The suggested fee hikes follow increases the Consumer Price Index has seen over the years.

Before making his point that elevated DCCs lead to jumps in the cost of the homes, Graham took issue with the report’s note that the fees should rise because costs are going up.

It’s a mistaken idea, he said. He argued the city has never before had so much support from senior levels of government for infrastructure programs through initiatives like the federal gasoline tax-sharing program.

Coun. Dave Stockdale, however, argued that not all city infrastructure is funded fully by those types of programs. It’s important the city off-set a lot of the costs of infrastructure development, he said.

“I think it’s an appropriate time to do it,” he added.

Coun. Florence Roberts commented that though the city needs to do something about DCCs, there should also be something in place as an incentive to encourage developers to build to a greener standard.

Coun. Ranj Pillai suggested the city must be able to at least offer some explanation for what it’s doing with the charges to people who are trying to buy a home.

“Right now, it’s almost impossible to buy a home,” Pillai said.

Council is set to vote on the proposed changes Monday.