Carrriage home builders in Kelowna, B.C., will now face an astronomically bigger bill.
City council approved a hike to carriage home development cost charges (DCC) that will see the fees rise to around $23,000 from $2,500 for most areas of Kelowna. In other areas, it could be higher.
Carriage homes are standalone houses, usually built in the backyard of another house.
“Back in 2008, council agreed to charge a flat fee DCC of $2,500 for these developments, which would normally be charged a much higher DCC, equivalent to a condominium,” Joel Shaw, the city’s acting divisional director of financial services, said.
Development cost charges are fees collected by the city from builders to offset the economic impact of population growth, with the money going toward such things as new roads, parks, and water lines.
“The revenue difference borne by taxation and utility revenue for this flat fee is still in place today, and it’s not changed since 2008.”
In addition to not reflecting current infrastructure demands of these homes, the idea of the flat and reduced fee was flagged by the province as an area that needed to be amended because it provided “a specific land use tax assist, which is not permitted, as any tax assist must be applied evenly across all land uses.”
The province wasn’t alone in taking issue with how the DCCs were applied. Shaw said the Urban Development Institute (UDI), a lobby group for developers, was also asking the city to adhere to the benefit-for-pay principle and said that the infrastructure costs should be paid by those who will use and benefit from the installation of such systems.
In recent years, the city has pushed the development of carriage homes in hopes of densifying the downtown.
Now, however, council was told many downtown homeowners are leaning in another direction and building more dense residential projects on their properties, like four-plexes.
City manager Doug Gilchrist said carriage homes account for only one per cent of the city’s housing supply.
The city only approves around 20 to 25 carriage houses a year and that number has been declining over the last six years.
“It’s declined steadily even without a DCC that’s higher and in part that is a good thing,” Gilchrist said.
“It’s being replaced with higher forms of density that arguably are more beneficial to our community for infill and (will) use the infrastructure that’s in place in a more efficient way.”
Mohini Singh and Loyal Wooldridge did not support the fee hike, noting that it was too much too fast and carriage homes in the city are still a valuable form of
Mayor Colin Basran said that not supporting the fee hike was not an endorsement of more affordable housing because the costs exist regardless of who pays them. The shift, he said, means that less cost goes to the average tax payer.
In addition to carriage home DCCs, other DCCs will rise by an average of 14 per cent, with the city saying the increase is necessary because of inflation and in particular the rising cost of construction.