Metro Vancouver developers are bracing for the impact of another development cost charge (DCC) increase grenade rolled under their chairs from the Metro Vancouver Regional District. The increase approved late last year for the Greater Vancouver Sewerage and Drainage District’s (GVSDD) four sewerage areas is needed, according to Metro, to fund expanded infrastructure for what is projected to be a 43% rise in Metro Vancouver’s population over the next 30 years. The need to invest more in regional sewer and water infrastructure to service that population growth is not at issue for local developers. What is, however, is the size and timing of another DCC that will be added to the long list of charges developers already face in a region where housing is out of reach for much of the population. Depending on which GVSDD area the development is in and whether it is residential or non-residential, the per-unit or per-square-foot increases range from 75% up to 229% and are scheduled to come into effect on May 1. So, while the GVSDD points out that current DCC rates, originally set in 1997, won’t cover financing requirements, the large and relatively abrupt bump up in those rates will squeeze developers and, ultimately, their customers.
As Urban Development Institute president and CEO Anne McMullin noted in a press release raising concerns over the looming DCC bombshell, the development industry “is prepared to pay its fair share of the infrastructure and amenity costs associated with development growth, but these higher fees will impact building cost and affordability.”
She noted that the original Metro staff report proposed a three-year phase-in for the increase, “which would have provided a fixed cost timeline that allows developers to plan accordingly.”
That would have helped moderate the marketplace pain for local developers and consumers.
Metro’s timeline skews an already dysfunctional real estate and development marketplace and does more harm to the region’s economic and business potential.