Development cost charges (DCC) are set to increase in Penticton, B.C.
Council requested a review of the DCCs early on in the term and council approved the increase during its last meeting on Tuesday.
“Because the review shows the costs of servicing the new licensed subdivisions are now covered by the DCCs and the taxpayers aren’t covering any of those costs.”
DCCs are mandatory levies placed on new construction to fund things like roads, sewers and parks needed to service a new home.
The rates went unchanged from 2007 to 2020 then increased by 25 per cent across the board last year while the review took place.
“The focus was to ensure that the DCCs covered the actual cost of servicing new licensed subdivisions and so that burden was not put onto the taxpayer,” said Bloomfield.
The rise means new homes will cost more to buy and the Penticton Chamber of Commerce says this isn’t the right time for an increase.
“Townhouses are going up almost $10,000 a unit, which is pretty significant. Especially when you look at a townhouse as being an entry-level residence for first-time homebuyers, so adding that extra $10,000 is an extra barrier,” said Penticton Chamber of Commerce executive director Michael Magnusson.
Jonathan McGraw, Penticton Chamber of Commerce president, says the decision could have a significant and long-term impact on the local economy.
He added that Penticton is struggling with housing availability and affordability.
“The shortage of housing and subsequent rising costs for either renting or purchasing a home in the last few years has had a significant impact on local businesses to hire and retain employees, and for business owners themselves to find housing that is affordable,” said McGraw in a press release.
“This negative impact has caused some local businesses to reduce hours and/or limit available services, and even caused some to close altogether.”
The Chamber says the process could have been done differently.
“We support DCCs but it’s just the timing,” said McGraw.
“Maybe could have been smaller increments, gradual increments that increase over time to go hand-in-hand with how development is proceeding.”
In response, Bloomfield said that the outgoing council is confident in the process and the decision that was made.
“It was a three-year process and there was a lot of public consultation and input from local stakeholders regarding this DCC review and if the chamber wants to review that any further then that’s great,” said Bloomfield.
The changes will place Penticton in the middle when it comes to comparable DCC rates in the Okanagan.