The chairman of Metro Vancouver’s board of directors has responded to this week’s co-ordinated campaign by private developers against planned increases to development cost charges (DCC) in the region.
In a statement provided to Glacier Media, Burnaby Mayor Mike Hurley said the DCC increases set to take effect on Jan. 1, 2025, are necessary to support affordability for residents and avoid significantly higher utility bills.
“Unfortunately, senior government funding for infrastructure hasn’t been nearly enough to support affordability for residents,” said Hurley, who also serves as Metro Vancouver’s chairman. “Without increasing DCCs, households would need to pay for the vast majority of the cost of new infrastructure through their utility bills.”
Hurley’s statement comes after letters were sent to the Metro Vancouver Regional District Board by several developers this week requesting that planned increases to DCCs be reconsidered, claiming the higher fees will significantly impact housing delivery and affordability.
DCCs are scheduled to be hiked in three phases on Jan. 1 of each year for the next three years. There is also a new parkland acquisition DCC being introduced to “fund the acquisition of land to become regional parks, which will help ensure that the growing region can remain livable for the next generation,” says Metro Vancouver’s website.
In his statement, Hurley said it’s fair that the costs of water and sewer infrastructure be accounted for in developers’ plans.
“We understand the need for this to be gradual and it has been: we’ve been engaging with developers since the board gave clear direction on increasing DCCs in 2017, and we’re phasing it in over another three years,” he said.
“We are very mindful of any impact on housing costs in this region, and as part of our process we committed to regular assessments of DCCs and how they might impact the economic health of the region.”
In Monday’s letter addressed to Hurley, Wesgroup Properties LP president Beau Jarvis said the forthcoming fee increases will affect the viability of housing projects, resulting in less housing supply, higher unit prices and fewer community amenities. His letter was followed by largely identical letters from executives at Edgar Development Corp., Polygon Homes Ltd., Anthem Properties Group Ltd. and Strand Development Group Ltd., according to media reports.
“It is imperative to recognize that additional costs on new housing will only exacerbate the affordability crisis,” Jarvis wrote in his letter. “Simply increasing development fees to the point that new housing can’t move forward will not solve regional infrastructure and amenity delivery concerns.”
Currently, there are two types of DCCs: water DCCs and liquid waste DCCs. These are levied on developers for residential and other projects to fund new liquid waste and water infrastructure to service the region’s growing population.
In his letter, Jarvis asked the Metro Vancouver board to implement a two-year delay. He also requested that DCCs be charged at the end of projects rather than earlier. He urged the board to conduct further financial analysis to understand the impact of the fees on land value, project viability and community amenity contribution funding.
Finally, Jarvis requested “meaningful conversations with the industry to implement proper in-stream protection from the time of rezoning application to the end of the project, including a five-to-10-year phase-in duration.”
Water charges have been in place since April 2023 and currently fund 50 per cent of the cost of new water infrastructure. Liquid waste charges have been in place since 1997 and currently fund 82.5 per cent of the cost of new sewage infrastructure. The remaining infrastructure costs are defrayed by the general public, says Metro Vancouver’s website.
In addition to the new parkland acquisition charge, existing DCCs will be increased starting on Jan. 1, 2025. The fees vary by unit type. Total DCCs for apartment dwelling units, for example, will go from $6,249 currently to $13,392 next year; $17,873 in 2026; and $20,906 in 2027 – a total increase of about 235 per cent.
In his letter, which was copied to federal and provincial housing officials as well as several news media outlets, Jarvis asked that Wesgroup be permitted to address the next board meeting, which is scheduled for Friday, Sept. 27.
