METRO VANCOUVER (NEWS 1130) – With Metro Vancouver’s board set to vote on whether or not to increase development fees tomorrow, home builders are warning the cost will be passed on to you.
But much of the concern about the new costs centre around the timeline.
Metro Vancouver is increasing fees for sewer services substantially after leaving them essentially untouched since 1997. The board wants to bring fees in line with modern costs.
It’s not the hike itself that’s troubling Bob de Wit, chief executive of the Greater Vancouver Home Builder Association, it’s the fact if this move is made fees will go up as much as 200 per cent in some cases — and it will happen all at once in May of next year.
“We don’t condemn development charges,” says de Wit. “Development charges are necessary to open up new areas for construction, but in this one case, the impact would be about $4,000 per door for a single family or townhouse and it would be close to $2,000 for a condominium.”
He wants a phased introduction of these new fees.
“What they’re using the money for is important,” says de Wit. “The wastewater delivery system has to be improved in Metro Vancouver. There’s no doubt. We’re just saying that it needs to be phased in over a longer period of time. Phase in a set amount this year, next year and so on throughout the years so that the industry can respond to it and also adapt to some of these other changes that are happening in the environment so that this one extra hit doesn’t disproportionately push too many new buyers or buying up buyers out of the marketplace.”
The Urban Development Institute is equally bothered, with president Anne McMullin saying these fees will affect building cost and affordability.
“Because of the way the market is right now, 100 per cent of this will be passed on to the buyer,” says de Wit. “That’s because the market is so hot. When governments impose costs like this, they like to think that the developer or the landowner will absorb the cost by reducing their expectations when they sell their piece of the value chain.
“But what really happens is, the landowners don’t adjust their expectations so land prices don’t go down by that amount and then developers are forced to pay what they were to pay anyways for the land, and they just pass the cost straight through to the end buyer.”