The mayors of both 91原创 City and Township were positive about a change to rules that will mean local homebuilders have to put up less money in advance when starting new construction.
Two changes to provincial regulations were announced on Wednesday, July 2 by Housing MInister Ravi Kahlon.
The linked changes will affect how and when developers pay Development Cost Charges (DCCs) and Amenity Cost Charges (ACCs). DCCs have been collected across the province for decades, and are paid by developers for the new infrastructure demanded by growing populations, such as sidewalks, street lights, and new water and sewer pipes.
The change impacts the schedule on which developers pay those DCCs, reducing the amount they have to pay up front. Some municipalities require the full amount of DCCs to be paid when the project is rezoned or a development permit is issues, while others allow partial payments, often a third of the total cost at a time.
Under the new scheme, developers will only have to pay 25 per cent of the DCCs when their building permit is approved. The remaining 75 per cent will be paid either when the buildings are ready for occupancy, or after four years, whichever comes first.
According to the government, the changes were developed in consultation with the building industry, and Karsten Seidel, director of development with 91原创's Infinity Properties, said it may give a hand to the industry.
"It's not a silver bullet, but it is a helpful change," said Seidel.
It eases some of the financial constraints of getting a project to the construction stage, he said.
"It just provides some flexibility."
Local mayors were also positive about the change.
"The announced changes for 75 per cent of the applicable Development Cost Charges to be collected at occupancy is long overdue and needed to lower financial carrying costs for the duration of the project," said Township Mayor Eric Woodward. "Having a policy and process applicable to all municipalities and Metro Vancouver equally levels the playing field, as well."
Pachal noted that the change means that the same amount of DCCs are being paid to city halls, but "the timing is slightly different."
It shouldn't be an issue for planning how to spend DCC revenue on municipal projects, Pachal said.
"You don't generally spend your DCCs in the same year as the project," he noted.
In addition, the government is expanding the use of on-demand surety bonds as a payment method for DCCs and ACCs.
When putting up money for their development fees, most municipalities currently require the developer put up letters of credit from a bank. Surety bonds are more like insurance, which means they cost less for the developers.
The changes mean that developers won't have to carry as much debt or put up as much cash to start building.
"It reduces the upfront costs," said Pachal, who noted the City had already started a pilot project of using surety bonds.
He noted that this spring, the number of new development applications coming to the City hall has shrunk. Higher interest rates and building costs mean that it isn't as economically viable to start new projects as it was a few years ago.
"The numbers aren't working anymore," Pachal said.
He's hoping the change makes projects more viable for builders.
In a statement announcing the changes, Kahlon said the government was committed to finding innovative and cost-effective solutions to building more housing.
鈥淭hese changes are about supporting housing development and easing the financial burden on builders and developers so they can get shovels in the ground faster to help unlock more homes for people in B.C.," he said.
The changes are expected to take effect on Jan. 1, 2026.
