Metro Vancouver defies feds to boost DCC rates
November 9, 2023
British Columbia’s Metro Vancouver regional district has defied a warning from the federal housing minister by voting for dramatic increases on its development cost charges (DCCs) on new residential development.
Rates are set to soar by as much as 73 per cent from current levels in 2026 because of amendments passed October 27, 2023, to the current bylaw.
Townhouses will be hit hardest with rates increasing 73 per cent to $9,839 per unit in 2026. Detached homes will increase by 64 per cent to $10,952 a unit.
DCCs for apartment units will rise 59 per cent to $6,791 per unit, slightly more than the 56 per cent increase non-residential construction will face that will see office and industrial space charged $5.30 a square foot.
Within the space of five years, these increases will triple what developers pay Metro Vancouver to undertake construction, adding to uncertainties as builders pause projects while navigating higher financing costs.
Prior to the vote, the federal government warned Metro Vancouver against increasing its DCCs.
“I appreciate that cities need access to funding to build out the infrastructure that the growth we are trying to incentivize will rely on. I am not suggesting that development charges, generally speaking, are unacceptable,” Federal Housing, Infrastructure and Communities minister Sean Fraser wrote Metro Vancouver directors. “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.”
The fees technically fund the cost of infrastructure needed to support new housing, but the impact goes well beyond infrastructure costs.
Canada Mortgage and Housing Corporation reported that government charges in major metropolitan regions across Canada in 2022 contributed to less affordable housing.
While municipalities in Greater Toronto topped the fee charts nationally, with government levies adding up to more than $100,000 per new housing unit in many cases, the average fee per high-rise condo unit in Vancouver led B.C. at $92,656.