Metro Vancouver staff said that six of 19 municipalities already have bylaws that waive or reduce development cost charges for affordable rental housing
Metro Vancouver is considering waiving fees that help cover the cost of connecting new developments to water and sewer infrastructure as a way to get developers to build more affordable rental housing.
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Anne McMullin, president of the Urban Development Institute, which represents the developers, said Monday the proposal to waive so-called development cost charges, or DCCs, for building more “inclusionary housing” is a positive step.
“Inclusionary units are below-market units that already cost the developer. They are charging DCCs on what is part of an amenity contribution so it makes sense to have a waiver,” she said.
In the city of Vancouver, McMullin said, affordable or inclusionary housing units make up 20 per cent of the total number of units in rental projects. The ratios in other Metro municipalities vary.
She said it would allow more developers to build below-market rentals.
In a report for a committee meeting this week, Metro Vancouver staff said that six of 19 municipalities already have bylaws that waive or reduce development cost charges for affordable rental housing. It is anticipated that as new provincial housing legislation enables all municipalities to increase zoning for affordable housing, there will be more projects that have a mix of market and below-market units, so Metro set out to review how the charges might hurt the viability of these projects.
Currently, development cost charges related to regional liquid waste and water are waived only for housing that is owned by a not-profit society, B.C. Housing, the Canada Mortgage and Housing Corporation or a registered charity. This has been in place since 2010.
Based on that, it’s projected that between 1,950 and 2,500 affordable units will receive a waiver each year, on average, between 2024 and 2033, representing an estimated 10-year loss in revenue to Metro Vancouver of about $38 million to $49 million a year.
If the waivers are expanded to below-market-rent projects built by private developers, the number of affordable units receiving a waiver is anticipated to increase by an average of 281 to 361 units a year between 2024 and 2033, representing an additional $5.4 million to $7 million per year loss in revenue.
However, Metro Vancouver’s development cost charges are slated to go up substantially over three years, with the first increase having happened on Jan. 1.
With files from Derrick Penner