Metro Vancouver, which includes the City of Vancouver and 20 other municipalities, is proposing to increase its development cost charges (DCC):
Metro Vancouver is proposing to increase DCCs by roughly $23,000 per new single-family home; $21,000 per new townhome; and $14,000 per new apartment. For example, fees for a townhouse in Vancouver will rise from $10,027 today to $30,861 by 2027.
In response to this, federal housing minister, Sean Fraser, has just pulled $138 million in funding that was intended to accelerate housing permits and new affordable housing projects in Surrey and Burnaby.
This makes some sense. Because it is pretty weird to say, "Hey, we need more affordable housing. Give us some money for this and, while you do that, we're also going increase the cost of building new housing."
Of course, this is the whole growth-should-pay-for-growth mantra. And supposedly, there's growth-related infrastructure that needs to be built.
To be fair, Metro Vancouver is also proposing to increase its property taxes: 12% in the first year, 11% for the next two years, and then 5% for the next three years. So this is not all going onto new supply.
I don't know enough about the finances of Metro Vancouver to comment on these numbers specifically, but I do think it's important that policy makers understand what the current market environment means for new housing.
It is difficult, and in many cases impossible, to underwrite new housing projects today. Which means that even if all fees and charges were to remain unchanged, we are going to see a decrease in new housing supply.
