Vancouver has the dubious distinction of having the country’s highest development charges for high-rise buildings.
That’s according to a Wednesday report from The Conference Board of Canada, which found that development charges potentially add $125,600 to an 800-square-foot condominium in Vancouver, or $157 per square foot.
Compare that to St. John’s in Newfoundland and Labrador, where development charges are $1,600 per high-rise unit, or $2 per square foot.
Other cities in B.C. came in well under Vancouver’s levels. For example, Surrey came in at $48,800 per unit or $61 per square foot, and Burnaby came in at $19,200 or $24 per square foot.
Vancouver performed better regarding low-rise buildings. For a 2,000-square-foot low-rise dwelling, charges averaged $56,000 or $28 per square foot in Vancouver, $76,000 or $38 per square foot in Surrey, and $26,000 or $13 per square foot in Burnaby.
Development charges fund infrastructure ranging from water and sewer to roads and parks. They have come under intense scrutiny in B.C., where the Metro Vancouver regional body is significantly hiking its water and liquid waste development cost charges, or DCCs, over the next three years, in addition to introducing a new parkland acquisition DCC.
The Conference Board found in its report a positive correlation between home prices and development fees, suggesting that such charges reduce housing affordability.
The research institute said development charges have benefits including accommodating future growth and containing urban sprawl. The report said they are “politically attractive” because they shift development costs from the many (existing homeowners) to the few (new homebuyers). However, development charges can also create inequality between the two groups by imposing high taxes on a narrow tax base, it said.
The Conference Board recommended in its report barring “mission creep”—the diversion of funds to non-infrastructure expenses. Other recommendations included capping their share relative to home prices, and demarcating them in home purchase agreements.
“Ultimately, the best infrastructure financing solution should come from a mix of general municipal revenue and development charges, with their respective contributions regularly scrutinized in public,” said the report.
