The Victoria Residential Builders Association partnered with other industry associations including the Urban Development Institute and West Shore Developers Association to commission a review of the Capital Regional District’s (CRD) $2 billion Water Supply Plan.
The consulting engineer’s report determined the plan requires more technical and financial due diligence. In addition, the proposed Development Cost Charges (DCC) will add thousands of dollars to the cost of each new home in our region, where home prices are already among the highest in Canada.
To determine the impact on new housing supply, VRBA, UDI and WSDA commissioned another study by Mulholland Parker Land Economists.
Their recently completed report concludes four out of five housing forms (including townhomes & apts) in the region “are not viable under current market conditions.” The proposed water DCCs would reduce viability beyond existing market conditions and delay market recovery up to 25% (e.g., wood-frame strata from 4 to 5 years, concrete rental from 5 to 6 years).
The BC government’s Local Government Act says “In setting development cost charges, a local government must take the following into consideration, whether the charges will, in the municipality or regional district;
- deter development;
- discourage the construction of reasonably priced housing or the provision of reasonably priced serviced land.”
VRBA, UDI and WSDA sent the report to the CRD for reconsideration of the DCCs. Their existing proposal would increase charges on single family homes by 63% and townhomes by 78% in Saanich.
For example, Saanich DCCs would increase from $14,399 to $23,443 for a single family home and a townhome would rise from $10,101 to $18,015.
The BC government also has the authority to decline the DCC increase. Their DCC Best Practices Guide says the Ministry of Municipal Affairs may refuse approval of a DCC bylaw “if the DCCs are excessive, deter development or discourage construction of reasonably priced housing.”
On behalf of homebuyers and affordability, VRBA, UDI and WSDA have done the economic analysis which should have been undertaken before the DCCs were proposed by the CRD.
The study offers the CRD a new opportunity to launch a wide public consultation and revisit the DCCs and their impact on housing supply and affordability.
This column appears Wednesdays in the Times Colonist.
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