The Homebuilders Association of Vancouver (HAVAN) recently raised alarm bells about the escalating costs of building new housing when it comes to Development Cost Charges (DCCs).
The association says it has collected information related to the implementation of DCCs across Metro Vancouver over the past year and looks to understand the implementation of Bill 46: Development Financing, and the impacts of the current and pending changes to the delivery of homes.
DCCs are fees collected from land developers to help fund the cost of the new infrastructure and things like parks needed to service new development.
The report notes there is already a disparity across the region in DCCs, with larger population centres tending to charge higher fees, while the addition of fire, police and solid waste facilities to chargeable DCCs will allow municipalities to charge more to developers.
TransLink and the Metro Vancouver Regional District also charge DCCs.
Meanwhile, Bill 46 made changes to the Local Government Act, allowing new tools for local governments to recover costs from development, including the introduction of Amenity Cost Charges (ACCs) to fund amenities such as community and recreation centres, daycares and libraries following the “growth-pays-for-growth” principle. That will further increase the cost of development, according to the association.
“The new legislation will also incentivize municipalities to holistically review their DCCs, leading to increases across the board for those municipalities who have not increased their fees in some time, creating potential for greater disparity in fee increases as growth pays for growth,” the report warns.
According to the City of Delta, “DCCs help ensure developers pay their fair share of the costs required to develop new infrastructure and park improvements.”
Council this year gave final approval for increased Delta’s DCCs after a lengthy review, which began in 2023, to reflect new growth projections, development-driven infrastructure projects and current-day construction costs. The last update was approved in 2017.
The DCC rates will be phased in over two years over using a Municipal Assist Factor (MAF), with a 20 per cent MAF used in the first year after the adoption of the bylaw amendment, and a one per cent MAF used in year two and beyond.
The charge for a new lot to accommodate a single-detached dwelling, which is in a low-density category, was $11,942. In the first year of the new rate, that will increase to $14,225. In the following year, once the MAF is lowered, the DCC will be $19,342.
The DCC rate for a new condo or townhouse per dwelling unit increases from the $6,079 and $8,252 respectively to $9,672 and $13,181 respectively, once the MAF is at one per cent.
In addition to retaining a consultant, Delta’s DCC Program update was also guided by the province's Development Cost Charges Best Practices Guide, which provides local governments with a list of best practices to consider when developing a DCC bylaw or conducting a minor or major revision to an existing DCC bylaw.
A staff report noted Delta's proposed DCC Program rates rank among the lowest in Metro Vancouver.
For low-density single-family residential lots, Delta’s $19,342 charge will still be lower than neighbouring or comparable cities including Coquitlam ($60,422), Richmond ($61,138), Surrey ($53,154), New Westminster ($22,542), as well as Langley Township ($48,355) and Maple Ridge ($22,471) which were going through their own DCC reviews.
The report also notes the city will continue to review new development projections and DCC infrastructure needs in light of federal and provincial housing announcements, such as the Small-Scale Multi-Unit Housing Initiative, and market pressures. Such reviews may result in the need for land use plan updates, capital plan updates and /or future DCC amendments, the report adds.
