Federal housing cash for Metro Vancouver in question over planned new development charges

The future of tens of millions of dollars in federal housing funding for two Metro Vancouver cities is in question after the federal minister responsible abruptly cancelled a planned announcement on Tuesday.

Housing Minister Sean Fraser had been scheduled to announce deals with Surrey and Burnaby under the $4-billion Housing Accelerator Fund, but posted to social media that he was hitting the brakes.

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“In light of a proposed development cost charge increase by Metro Van, I’ve postponed today’s announcement of Housing Accelerator Fund deals with 2 cities who are members of the Metro Van board,” Fraser wrote.

Fraser was referring to plans by the Metro Vancouver board to increase development cost charges (DCCs) on construction to help pay for upgrades to regional water, liquid waste and park infrastructure.

A third-party report commissioned on the change, dated Sept. 15, states those new charges could have a significant effect on the cost of new builds.

The cost of a new detached home could climb between $18,506 and $24,106, the cost of a new townhouse could increase by $16,952 to $22,182, and the cost of a new apartment could increase by $11,360 to $14,657 per unit when fully implemented by 2027, the report from Coriolis Consulting found.

The move is intended to reduce the property tax burden on homeowners, on the principle that “growth pays for growth,” according to the regional district.

“The region will grow by one million people over the next 30 years bringing the population to 3.8 million,” Delta Mayor and Metro Vancouver Board Chair George Harvie said in a statement.

“Approximately $7 billion in critical infrastructure needs to be built to accommodate these new people, and the key challenge is how best to fund it.”

The district said the proposed DCC rate increases were equivalent to interest rate increases over the last year, about one-third of the impact of increased construction costs and “significantly less” than changes in land value over the same period.

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British Columbia Housing Minister Ravi Kahlon said Tuesday that he understood Fraser’s concerns.

“I had an opportunity to talk to Metro Vancouver, and I expressed my concerns to them about the changes they were looking at, but I also understand infrastructure needs money,” he said.

“I think it’s an important conversation to have with Metro Vancouver but I think they are aware of the challenge and I hope that they’ll be reconsidering their path forward.”

Both Surrey Mayor Brenda Locke and Burnaby Mayor Mike Hurley received letters of approval on the Housing Accelerator cash from Fraser last week.

According to the Burnaby approval letter, its proposal for funds included a new Burnaby Housing Authority, updated zoning laws to encourage density, an expedited approval process and new technology to improve permitting.

Fraser said his ministry was studying the impacts of Metro Vancouver’s proposed charge increases, and that he hoped to have more to say on the matter soon.

You can learn more about the proposed DCC increases and submit feedback to Metro Vancouver on the proposal here.