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New homes in Kelowna expected to cost more

New homes in Kelowna expected to cost more due to new development cost charges

Buying a new home in Kelowna will likely cost more because of a new Devleopment Cost Charge (DCC) recently approved by city council.

“It’s always funneled to the end user,” said Cassidy deVeer, president of the Central Okanagan Home Builders’ Association.

Developers already pay a roughly $7,000 DCC for park acquisition, so they can obtain land for park space.

READ MORE: Newly built homes in Kelowna could cost more

Now the DCC will double to $14,000 for park development to create proper green spaces, playgrounds and sports fields across the city.

“It’s definitely frustrating because it is not just the fact it’s $7,000, it’s $7,000 on top of the $7,000 that is already there,” deVeer said. “And by the time you combine those into the home, the end user ends up paying GST on it as well, so you’re looking at almost 20 grand for somebody when they are buying a new place.”

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The $14,000 DCC will be applied to every new home built, whether that be a condo unit, townhome or a single family house.

“With the way this DCC is structured, it’s per door so whether you are building one large mega mansion or if you’re trying to build a triplex or duplex or fourplex , you’re being charged per door so someone that’s essentially getting a tiny condo is paying the same price as somebody that’s getting a full big house,” deVeer said. “We would have liked to see a more fair approach to this.”

DeVeer said the DCC increase will make housing affordability an even bigger problem.

“We are in a housing crisis, there is no other way to word it, it’s a housing crisis and so projects will either [be] cancelled or they will just cost more,” she told Global News.

But councillor Mohini Singh says as Kelowna’s population grows so too does the need for more green space.

“We are thinking outside the box to see how can we build those parks,” Singh said.

Singh said DCCs are just one part of park funding. The rest of the money comes from park fees and general taxation.

She added that council does care about affordability but has to balance a number of priorities at once.

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“We are looking at the affordability factor too and we have a lot of units coming on stream but there are more people moving to Kelowna, so we are trying to keep up with demand for housing, with the demand for housing comes the demand for parks,” Singh said. “This is a very fine balance.”

But deVeers said the significant increase is unfair to both developers and buyers, calling the hike another revenue stream for government.

“When we have problems with affordability and we wonder why it costs so much now to build a home, why is land, why is it all so expensive? Government has a huge part to play in it when they keep drawing revenues from it,” she said.