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B.C. mayors raised concerns that the provincial government’s plan to boost multi-unit housing contains a significant oversight that could force municipalities to forfeit tens of millions of dollars from developers
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The B.C. NDP say legislation announced Tuesday will address mayors’ concerns that the government’s plan to boost “missing-middle” housing contains an oversight that could force municipalities to forfeit tens of millions in community amenity contributions.
Last week, the province introduced Bill 44, which would force municipalities to do away with rezoning and automatically approve up to six units on a single-family lot in areas close to transit.
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Several mayors told Postmedia News last week that the proposal could cost them tens of millions of dollars in fees from developers used to pay for parks, recreation centres and services to support population growth. That’s because the fees are agreed to during the rezoning process for a large development project.
But Housing Minister Ravi Kahlon said followup legislation introduced Tuesday will create a more transparent development finance tool called an amenity cost charge. Instead of being negotiated at the rezoning stage, the tool will allow municipalities and developers to agree on amenity charges upfront, which Kahlon said will give builders and municipalities a clearer understanding of the costs associated with a housing project from the start.
Pro-density advocate Robert Berry of Victoria-based Homes for Living said the legislation does away with an antiquated system for negotiating amenities contributions — in-kind or cash voluntarily paid by property developers to municipalities — which amounted to “backroom negotiated extortions.”
It’s an opaque case-by-case process that Berry said is based on a quid pro quo understanding that municipalities will reject the project at public hearing if developers don’t hand over enough money. This amounts to “a tax on new housing in the middle of a housing shortage,” he said.
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Kahlon said the latest housing bill supports the government’s efforts to increase the supply of multi-family homes by addressing concerns from homebuilders and municipal politicians fed up with the “long-drawn- out negotiations” for community amenities contributions that can slow down construction and add unexpected costs in the middle of a project. Those costs are passed onto the prospective homebuyer or renter, he said, making housing more expensive.
Kahlon gave an example of a provincial affordable housing project for seniors that saw a local government suddenly say, “Let’s negotiate increased (development fees), let’s negotiate increased parking fees.”
Municipalities will not be forced to use the new development finance tool.
“We’re leaving it up to local governments to decide what they believe is best for them,” Kahlon said.
Trish Mandewo, Union of B.C. Municipalities president and a Coquitlam city councillor, said in a statement that while the province’s new funding tool “provides more certainty in collecting needed funds for some essential amenities like daycares, recreational facilities and libraries,” there remains a “gap” in the legislation that doesn’t address ways to fund affordable housing through amenities fees.
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The government’s news release included positive reaction from New Westminster Mayor Patrick Johnstone, Langley Mayor Nathan Pachal and Victoria Mayor Marianne Alto.
Pachal said in a statement that the “current system of collecting these fees is limited, complex and ad hoc, slowing down housing construction.”
Asked why the province didn’t create a set formula for collecting development fees, which could address the recent federal government’s concerns over Metro Vancouver’s tripling of development cost charges (DCCs), Kahlon said a one-size-fits-all model doesn’t make sense for municipalities that have different infrastructure needs.
Burnaby Mayor Mike Hurley said he needs to see the province’s funding mechanism before he endorses the legislation but said it’s a good “first step” that recognizes that municipalities need a way to fund infrastructure to support new housing.
Hurley said he hopes the new fee structure will not become a “political football,” which happened when Ottawa intervened in advance of the Metro board’s decision to nearly triple the fees (DCCs) paid by developers on new construction. Metro directors voted in favour of the hiked fees despite a letter from federal Housing Minister Sean Fraser asking them to reconsider, citing fears the higher fees could make housing more expensive.
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DCCs collected by municipalities — which are separate from amenities contributions — pay for new or expanded infrastructure such as sewer, water, drainage, parks and roads. The proposed legislation will also allow municipalities to use those fees to pay for fire, police, waste and recycling projects.
Fraser said the planned development fee hikes could jeopardize badly needed housing supply. He also threatened to withhold federal housing funding through the housing accelerator fund that Port Coquitlam Mayor Brad West said was “akin to a hostage-taking.”
Fraser postponed the housing accelerator announcements for Burnaby and Surrey in September. Both Hurley and Surrey Mayor Brenda Locke said they’ve had no updates on when the funding will be announced, but both said they’re confident the federal government will keep its word in doling out the housing cash.
Fraser wasn’t available for an interview Tuesday and wouldn’t say when the federal government will reschedule the housing funding for Surrey and Burnaby.
However, a spokesman for his office, Micaal Ahmed, said that “city-by-city we are reaching deals across Canada to cut red tape and build homes faster. We need everyone at the table with us to solve the housing crisis, including the provinces and territories.”
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kderosa@postmedia.com
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