Fees associated with building new residential and non-residential buildings across Metro Vancouver will go up significantly over a three-year period between 2025 and 2027. In a public meeting today, Metro Vancouver Regional District’s board of directors approved the recommendations and framework by regional district staff to exponentially increase the development cost charges (DCCs) associated with new building developments.
Depending on location, the combined total DCCs rate increases for residential projects are $18,506 to $24,106 per single-family lot, $16,952 to $22,182 per townhouse unit, and $11,360 to $14,657 per apartment unit. While builders and developers will cover the cost of these fees, it is assumed that the resulting added costs to construction will be passed on to residents through a higher sale price or rental rate. These fee hikes will help fund a significant portion of the regional district’s $35 billion plan over the next 30 years to expand and improve the regional network of water supply and sources, sewerage capacity, and regional parks to meet the needs of the region’s growing population and economy and renew aging infrastructure. The single most expensive project is the new Iona Island Sewage Treatment Plant facility near Vancouver International Airport which will cost over $10 billion.
The highly controversial “growth pays for growth” strategy has been met with much criticism from the development industry, some municipal officials, and even the federal government, which first indicated its opposition in September by delaying the federal Housing Accelerator Fund to Burnaby and Surrey. In an open letter earlier this week ahead of today’s decision, Federal Minister of Housing Sean Fraser reiterated the federal government’s position against the added costs to building development and the impact that it would have on addressing housing affordability and supply. “Given the spirit of the Housing Accelerator Fund and the work that the federal government is doing to change the financial equation for builders, large increases in development charges are at odds with these goals,” wrote Fraser.
The minister challenged the “growth pays for growth” strategy, as “we will all pay for stagnation as a result of a lower pace of construction. A ‘growth pays for growth’ approach ignores the value that new development, new property tax bases, new businesses, and new neighbours bring to our communities. I am concerned that at this particular moment in time, a drastic increase in development charges will inhibit our ability to seize the opportunity to incentivize a rapid increase in construction.” Fraser requested the regional district’s board of directors — comprised of the elected municipal officials of Metro Vancouver’s municipal governments — to delay the start date of the new DCCs and implement exceptions for secured purpose-built rental housing.