Howard is based in Burnaby and covers real estate, housing policy, and the development industry. Signal: HowardChai.24
A group of developers, led by Wesgroup, recently launched a campaign against the upcoming increases to Metro Vancouver's DCCs.Last week, a group of British Columbia's most prominent developers kicked off a letter-writing campaign against the Metro Vancouver Regional District and increases to its development cost charges that are set to materialize in the new year.
The pushback against Metro Vancouver's DCC increases started last week with a letter by Beau Jarvis, President & CEO of, emailed to Metro Vancouver's Board of Directors . In, Jarvis discusses economic conditions and how adding substantial DCC increases on top of them would further limit the supply of new housing and make the available supply of housing even less affordable.
Metro alone used to be $1,082 — and to be fair to Metro, I'm pretty sure their DCC was $1,082 from the time my career started until four years ago — and then they started escalating. So it went to, I think, $3,500, but now it's going to $22,000. So the last few years have seen a staggering increase. What we want to illustrate is all of these charges get taxed again. There's a tax-on-tax component of this where when you pay GST, PST, HST on these purchase pricesyou pay property transfer tax, it's on the total purchase amount, which includes a bunch of embedded taxes in it.
The bigger point too, and we've tried to get this across prior to Metro voting on this fee increase, is all of the fees and charges are really coming out of the same place: they're getting charged to new housing development. So, when you reach the point where it's no longer viable to pay those fees, you don't get anything.
What we've been trying to talk to some municipalities about — and currently the Province needs to give municipalities the authority to do this in the— is to consider taking the payment at the end when the impact actually comes. They could have a mortgage on title or a charge on title that secures the payment and they get paid out at completion of the project. The actual cost of paying the fee upfront is astronomically more expensive than deferring it to the end.
There's a great study out of Ontario that looked at taxation on new housing, and I believe what they found was the feds take the most money out of new housing and return the least. I think they only return about 7% of what they collect, and I think that's the infrastructure problem in our country. I think the feds need to respond to the demands that are being placed on urban markets.
It ended up being convenient that it was — it wasn't strategic. I wish I could say we were smart enough to, but we just thought the timing was appropriate where it was time to do a check-in with Metro and say "It's been almost a year, here's the impacts we're seeing, we are struggling to move projects ahead, we're seeing the land market stall because a shopping mall is worth more as a shopping mall than it is as a transit-oriented redevelopment.
So we thought it would be more impactful to have each group kind of speak for themselves, but a few of us met and kind of debated what we are asking for. And that's why a lot of groups have followed that four-point request that we made: pause, reconsider, do more financial analysis, and let's work together earnestly to figure out how we can address this in a way that doesn't cripple housing starts.
And then, let's have an honest conversation about upfront payment of these massive fees, which really impacts projects. Let's take a bit more time on this. We understand the infrastructure demands, but if this goes ahead and housing starts slow down because of it, that's a bad outcome. And if housing starts slow down, no one's paying their fee either, so they're collecting 100% of nothing.There's interest from board members in hearing the delegation.
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