Metro Vancouver homebuyers will bear fee hike: developers

VANCOUVER — A development association is warning that a planned significant increase to a Metro Vancouver development fee will end up being passed on to home buyers.

Metro Vancouver is reviewing the liquid-waste-development cost charge levied on new developments in the region, with few exceptions. The fee funds 99 per cent of the cost of growth-related sewage projects in the region.

Metro Vancouver decided in 2014 to review the rates charged, which have not changed in 20 years. Across the region, rates are expected to rise between 75 and 229 per cent.

Anne McMullin, CEO of the Urban Development Institute, said fee increases don’t simply come out of a developer’s profit margin — homebuyers will feel the pinch.

“There’s only one taxpayer, and the money is going to get pushed somewhere,” she said. “It does get passed on into the new-home market, because money doesn’t just evaporate and get absorbed by the developer.”

McMullin said that if there are too many costs associated with building a home, it makes it difficult for a developer to get financing and keeps small and medium-sized developers from entering the market.

This reduces the number of developments and restricts supply, which keeps prices high, she said.

“It’s not that we’re opposed to [development cost charges] or the needs that we’re all facing as a region with much needed infrastructure improvements,” McMullin said. “We just need to work together to make sure that it doesn’t restrict the ability to create more homes so that things become more unaffordable, because that defeats the whole purpose.”

Metro Vancouver’s development charges are applied by sewer area — Vancouver, Lulu Island, North Shore and Fraser Valley — and are charged per unit for residential and per square foot for non-residential.

It’s proposed that rates in Vancouver would increase between 82 and 109 per cent. Rates on the North Shore would increase between 75 and 99 per cent, rates in the Lulu Island area would increase by between 103 and 109 per cent, and Fraser area rates would increase between 210 and 229 per cent. The Fraser region would take the biggest hit because it is large and growing quickly.

If the rates are not increased, taxpayers will bear the cost in their sewer bills.

There are provisions for the fees to be waived for affordablehousing projects.