New housing in Metro Vancouver face rising tide of steep fees

New housing projects in Metro Vancouver face rising tide of steep fees

Construction cranes for new towers in the Brentwood area of Burnaby. (EB Adventure Photography/Shutterstock)

In a new report, the Homebuilders Association of Vancouver (HAVAN) recommends that the municipal and regional governments of Metro Vancouver perform stakeholder consultations and carefully consider adopting new Development Cost Charges (DCCs) and Amenity Cost Charges (ACCs).

DCCs are a legislated tool for local governments to collect revenue from developers based on a set rate and the floor area size of their building development projects. This revenue stream supports the cost of improving water and sewer utilities, transportation infrastructure, parks, and facilities for police, fire rescue, and solid waste/recycling.

As for ACCs, they are a newly legislated tool by the provincial government to replace Community Amenity Contributions (CACs), which can be used to help cover the cost of facilities such as new community and recreation centres, childcare, and libraries.

However, DCCs cannot be used to fund projects that fall under DCCs. Additionally, as ACCs are based on set rates like DCCs, this new tool does not permit local governments to negotiate with developers, a scheme particularly practiced by the municipal governments of Vancouver and Burnaby.

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With a rate-based ACC system, which resolves the previous issue of the unpredictability and long negotiation process involved with CACs, this has led to the emerging challenge of higher overall building development costs, based on some of the new rates recently established by local governments.

“While increasing transparency and decreasing negotiation and processing times make life easier for developers, it is counterbalanced by increased development costs,” reads HAVAN’s report, outlining some of the tradeoffs of the “growth-pays-for-growth principle.”

The City of Burnaby has adopted ACCs, and they have set initial policy rates of $27,000 for a single-family house, $19,000 for a townhouse unit, and $13,500 for a condominium unit. Burnaby’s ACCs replace their Community Benefit Bonus, which is similar to CACs and previously enabled the City to negotiate on a case-to-case basis for more public benefits and/or cash payments from developers in exchange for approving more density.

Burnaby’s municipal government has particularly been vocal with their opposition to the provincial government’s new legislation, and its impacts to the City’s ability to fund community facilities without having to tap into general revenues. The City recently blamed ACCs for the challenges with covering the cost of building the $215 million Confederation Park Community Centre, as the tool is new and has yet to amass any pool of funding, with this project now facing some uncertainty with its scope and timeline.

On the other hand, developers assert that the combined increased DCCs and new ACCs are increasingly impacting the financial viability of new housing projects.

Currently, the average municipal DCC rates in Metro Vancouver are $39,199 for an average single-family house, $27,153 for an average townhouse unit, and $17,430 for an average condominium unit within a six-storey building. When the municipalities’ populations are considered, the weighted averages are $46,168 for a single-family house, $34,329 for a townhouse unit, and $23,780 for a condominium unit, with municipalities with a larger population generally charging higher fees.

Overall, the municipal DCCs across the region are highly inconsistent, with total municipal DCCs for a condominium unit reaching up to about $25,000 in Surrey and roughly one-fifth of that figure in jurisdictions such as New Westminster and North Vancouver.

The report also singled out Vancouver and Langley Township for drastically increasing their municipal DCCs since 2023. Vancouver’s DCCs have gone up by 20.5% for single-family houses, 20.4% for townhouse units, and 20.4% for condominium units, while Langley Township’s DCCs have been hiked by 81.2% for single-family houses, 79.2% for townhouse units, and 46.1% for condominium units.

Homebuilders Association of Vancouver

In addition to DCCs imposed by municipal governments, developers are facing drastic new DCCs from Metro Vancouver Regional District to fund the multi-billion dollar utilities projects for the region’s water supply and sewage treatment facilities. In recent weeks, numerous developers have come forward with their opposition to the regional district’s DCCs, and the negative impact it would have on the financial viability of projects and housing affordability by slowing down new supply, with the increased costs passed on to homeowners and renters.

In particular, within the Vancouver and North Shore sewerage areas, where the regional district is building the $10-billion Iona Wastewater Treatment Plant and the $3.9-billion North Shore Wastewater Treatment Plant, respectively, the liquid waste DCCs from the regional district will go up by 200% by 2027.

The regional district’s sewerage DCCs will reach $9,346 for a single-family house, $8,383 for a townhouse unit, and $5,780 for a condominium unit in 2025, rising to $11,125, $9,977, and $6,880, respectively, by 2027.

In 2025, their water DCCs will reach $10,952 for a single-family house, $9,839 for a townhouse unit, and $6,791 for a condominium unit. In 2027, these rates will roughly double to $19,704, $17,710, and $12,223, respectively.

Other regional DCCs are imposed by TransLink, but the public transit authority’s rates are substantially lower and only increase at the rate of inflation.

By 2027, when all DCCs are accounted for — from municipal governments, the regional district, and TransLink — the total DCCs will reach $73,222 for a single-family house, $57,492 for a townhouse unit, and $38,191 for a condominium unit. And this does not include the ACCs/CACs of municipal governments.

However, municipal governments and the regional district assert these fees are necessary to support the growing costs of maintaining, replacing, and expanding aging infrastructure and community facilities.

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