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Newly built homes in Kelowna could cost more

Concerns are growing that new home prices in Kelowna may be going up thanks to a new tax that may be imposed on developers.

A plan by the City of Kelowna to build park infrastructure in existing and newly acquired greenspaces may result in new homes costing more.

The city is planning on increasing park development cost charges (DCC) and using the additional fees towards parks development, including playground infrastructure and sports fields.

“We heard, particularly loudly and clearly from the sports community, we have a huge shortfall in terms of our playing fields,” said city parks and building manager Robert Parlane.

“Virtually every single sports organization talked about their frustration at having to turn people away, having to cancel leagues, just because they can’t get league time.”

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To make up the shortfall, the city plans to double the park DCC.

It wants developers to pay an additional $7,180 for every condo, townhouse or single family home they build.

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That’s on top of the more than $7,000 per unit they already pay that goes to the city’s parkland acquisition fund.

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“The city has been acquiring parkland over the years but we’ve struggled to actually find funding to develop those parks,” said Parlane.

The proposed new tax almost certainly will be passed on to the consumer.

“Any costs that a developer incurs becomes a flow-through cost to the end-user,” said Andrew Gaucher, past president of the Urban Development Institute.

That has developers and the Chamber of Commerce raising concerns about an already expensive housing market.

“We just don’t think that this added cost will help with affordability and housing affordability,” said Nikki Csek, chamber president.

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The chamber held a news conference on Tuesday morning, voicing its concerns and saying new home buyers shouldn’t be the only ones to carry the burden.

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“The concern that the chamber has is really just the funding strategy itself,” Csek said. “Some of those suggestions we made would be to look at increasing the taxes from the current tax base. It’s not a popular approach, but … we all use our parks.”

The development community is adamant it supports parks development, but believes there has to be a fairer way to do it.

“There’s a risk that new home buyers are paying for the development that, of course, the whole community gets to enjoy,” Gaucher said. “So our perspective was primarily that perhaps there could be a more balanced approach to achieve the same objective, being that part of it is property tax funded, part of it is DCC funded.”

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The city argues the charge is not unusual, adding park DCCs are very common in other municipalities.

“If we don’t pay for it through housing, we gotta pay it through taxation, so that’s still an unaffordability issue but the other side of affordability is livability,” Parlane said. “If we have new families coming into multi-family residences and, as the city densifies, we really need to make sure the city is a livable city that people actually want to come to.”

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The city plans on spending $107 million over the next 10 years to develop current and future parkland. A bulk of it, 75 per cent, will be paid through the DCCs.

The program will allow the city to make improvements to nine existing parks and create nearly two dozen new ones across the city.