Around this time last year, it was announced that the Metro Vancouver Regional District was planning to more than double — even triple, in some cases — its Water DCC and Liquid Waste DCC rates, in addition to introducing a new Parkland Acquisition DCC. The proposed changes drew national attention after Minister of Housing, Infrastructure, and Communities Sean Fraser suspended Housing Accelerator Fund announcements for Burnaby and Surrey over their introduction.
With some of those announced increases coming up to be implemented as of January 1, 2025, our industry is pushing back with facts. Qualico, Wesgroup, Polygon, Anthem, Strand, Edgar, Beedie, Intracorp, Bucci and Zenterra (ten organizations as of this morning) have submitted correspondence to Metro Vancouver Regional District’s Board of Directors asking to appear as a delegation and requesting that the Board take demonstrative action immediately:
- A 2-year delay of the implementation of the DCC fee increase to allow in-stream projects already facing viability challenges to move ahead;
- Implement a revised implementation plan for DCCs where the charges are paid at the end of the project;
- Conduct further financial analysis to truly understand the impact of this increase on land value, development viability on all types of projects, and the impact on CAC findings to member municipalities. Following that analysis, establish an appropriate assist factor to allocate these costs fairly between new development and the existing tax base.
- Engage in meaningful conversations with the industry to implement proper in-stream protection – from the time of the Rezoning Application to the end of the project, including a 5- 10-year phase-in duration.
While the letters are similar in theme, it is important to hear what they are collectively saying to Metro Vancouver decision-makers around the impacts of their significant DCC increases.
In our members’ letters, there is referencing “In the financial analysis commissioned by Metro Vancouver, Coriolis noted that if the additional DCC cost is large and it has a significant impact on land values, then this can change the highest and best use of a property from a redevelopment site into a holding site. Additionally, Coriolis predicted a reduction in land value as a result of this increase between 3.2% and 23.6%. In 2024, the market has seen a decline in all transactions, including in development land. Overall across Metro Vancouver asset classes the volume of transactions is down 48% year over year.” (Wesgroup)
Further the Coriolis report “forecasted a reduction in profit margins for developers by 1.3% to 2.7%. However, this was an understatement; the actual decline in profit margins is between 8% and 18%. This discrepancy puts current projects in a particularly vulnerable position.” (Strand)
Developers have advised that “the housing supply crisis in Metro Vancouver is no longer the primary issue. In the City of Surrey alone, there are 34,000 approved but unbuilt units. There is a cost of delivery crisis. Developments are hindered by excessive government bureaucracy, stringent environmental regulations, ever-expanding building code requirements, and rising costs of construction materials and labour.” (Zenterra)
“Things have not improved since the first wave of DCCs increased; things have become worse. Housing starts have dropped 20% year over year in the first half of 2024 according to CMHC. There are 14,600 units in the City of Vancouver that are approved but have not started construction. In Surrey there are 34,000 homes that are approved but are not under construction. Projects in foreclosure/receivership are facing a court-ordered sale. These projects also represent homes that are not coming to market because the projects are not viable. This is a result of increasing costs and the market having hit its ceiling of affordability.” (Anthem)
“The slowdown in the housing market is already making it much more difficult for “growth to pay for growth.” We have seen several municipalities recently announced the deferral of badly needed community amenity projects as a result of concerns over building costs and the lack of funding from new housing development. This before new Metro Vancouver fees come into effect.” (Polygon)
In closing, “While the principle of “growth pays for growth” has long been used to justify these charges, we believe it is outdated and no longer reflects a sustainable solution. Expecting new homebuyers to bear the bulk of infrastructure costs while existing residents benefit, creates a disproportionate burden on those seeking to enter the housing market. We believe there is a more balanced way to fund critical infrastructure projects, including increased collaboration with senior levels of government and exploring alternative funding models, such as municipal bonds or public-private partnerships.” (Beedie)
HAVAN wants to take our hat off and applaud the courage of our members to boldly challenge the status quo of allowing local government elected officials to continue to dig into the pockets of those who are building the much-needed housing supply in Metro Vancouver.
What happens next? This group of prominent industry professionals is requesting to appear as a delegation before the Board of Directors Meeting on September 27th, along with a subsequent referral to the Finance Committee. You can watch the meeting live-streamed here starting at 9:00am.
Over to you, Metro Vancouver Board of Directors!
The BC Provincial Election Writ Has Been Dropped…
This weekend saw the “dropping of the writ,” an action that kicks off the 43rd Provincial General Election, culminating on election day, Saturday, October 19th, with the election of 93 Members of the Legislature and the Premier.
The election countdown started this past Saturday with a 28-day campaign period for candidates to post signs, knock on doors, participate in debates and work with their volunteer teams to sell themselves to the general public.
While the main parties – BC New Democratic Party (NDP), BC Green Party (BCGP) and the Conservative Party of BC (CPBC) – have not all completely identified their candidates in the 93 ridings across the Province, they are getting close. As of this morning, the Conservatives have identified a candidate in all ridings, the NDP have three ridings left to fill (all in northern BC), the Greens have over half their candidates identified, with a record-breaking 49 Independents putting their names forward.
It is a campaign like no other seen with the BC United Party imploding and leaving its candidates hanging. Reports of financial non-viability of the Party to pay back candidates have seen many of those candidates dropping out, moving over the CPBC, or choosing to run as Independents.
While twenty-eight days seem like such a short period of time, it is early days for the Parties to roll out their party platforms on a broad scope of issues. From media reports, it appears that Housing and Affordability, Mental Health and Addictions/Public Safety, and access to Health Services including Hospital Emergency Rooms are top in the public’s view.
As we look to the up-and-rising CPBC party, leader John Rustad announced at UBCM this past week that if elected, he would unequivocally repeal Bill 44 related to Small-Scale, Multi-Unit Housing (SSMUH). Additionally, his party pledged $1 billion per year, over a decade, to local governments to fund needed infrastructure to support population growth. Their stated policy is lean and we look forward to hearing from the Conservatives in a detailed plan to build more homes in an efficient and affordable manner.
The Greens have not released their Platform Book but a review of their existing catalogue of policies refers to the development of a comprehensive housing strategy, including measures to curb speculation in BC real estate market, to provide affordable energy efficient housing for all British Columbians. Yes vague, but we look forward to hearing from leader Sonia Fursteneau on a full platform on housing.
Premier David Eby, leader of the current governing party, has not stated what his housing pledges would be if elected to a new term but is currently highlighting their actions to date including vacancy and speculation taxes, a flipping tax, restrictions on short-term rentals, and the implementation of Bills 44, 46 and 47 to kickstart the construction of hundreds of thousands of homes. Hoping to see a detailed plan of what’s next for the housing-focused party.
Know the Rules….if you are planning to contribute financially to a local candidate or to a party itself, please know that your company cannot donate, contributions must come from an individual and are capped at $1,450.82 to each political party and an additional $1,450.82 to each individual candidate.
Over to you Voters!
HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together to address the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.
Looking to stay up-to-date on Metro Vancouver’s residential housing industry? Sign up for Wendy’s weekly Monday Morning Briefing and other HAVAN emails here.
QUICK BITES …
A report from McGill University professor David Wachsmuth has found that rents in Vancouver have dropped by an average of $147 per month compared to a year prior after enactment of provincial legislation restricting short-term rentals. In all 52 communities studied across the province, the decrease was an average of $110.
CMHC data from August shows that housing starts across the country are down 22% from July. Starts in Vancouver are down 20% compared to August last year, though CMHC notes that 2023 was a record-high year.
The HAVAN Connection Awards are open until the end of day, today. Celebrating members doing business with members, the Connection Awards highlight one of the core benefits of being a member of HAVAN – the power of a trusted, local, network. The online link makes it easy to apply. Enter here! Winners of the Connection Awards, Rooftopper Awards (most referrals), Milestones, and Leadership Awards will be announced at the in-person Annual Election Meeting, scheduled on October 9th.
And speaking of building connections, Construction Social is on this Wednesday at Persona’s Restaurant meeting room in Burnaby. A casual get-together, everyone pays for their own food and beverages to keep things simple. This event typically draws 30-40 people, and includes speed networking too! A great way to meet people in the industry, check out the details here.
A few spaces are still available. Thank you to Event and Beverage sponsor Oray Fireplaces, Appetizer sponsors, Emerson Cole Flooring and Electric Asses, and Gift Basket Sponsor Green & Green Gifts with Flair.
