Casey Edge
BRITISH COLUMBIA – Recently, the Victoria Residential Building Association (VRBA) participated in a consultation by the Capital Regional District on housing affordability. The CRD asked:
- What are the greatest challenges or barriers to improving housing affordability across the region?
- What specific actions could the CRD take to improve housing affordability?
The answer to these questions is in our economic study sent to the CRD regarding their proposed Development Cost Charges for a $2 billion Water Supply Plan. The CRD plans to add thousands of dollars to the cost of new housing without doing their own due diligence to determine the impact on supply and affordability. It’s a big elephant in the room.
Their plan will add DCCs of $9,044 per new single-family home, and $7,914 for each ‘missing-middle housing’ townhouse and duplex. For example, Saanich DCCs will increase from $14,399 to $23,443 for a single family home and a townhome would rise from $10,101 to $18,015.
The Victoria Residential Builders Association, Urban Development Institute and West Shore Developers Association commissioned the economic study by Mulholland Parker Land Economists.
Our report concludes four out of five housing types (including townhomes & apts) in the region “are not viable under current market conditions.” The CRD’s plan would reduce viability beyond existing market conditions and delay market recovery up to 25%. The DCC’s would have a big impact on our region already in a housing affordability crisis.
VRBA, UDI and WSDA did the economic analysis which should have been undertaken by the CRD before they proposed the DCCs.
In addition, a consulting engineer has revealed the Water Supply Plan requires more technical and financial due diligence. CRD taxpayers will want to avoid the North Shore Wastewater Treatment Plant fisaco which boosted project costs from $700 million to $3.86 billion.
Where is the logic in the CRD undertaking generic “housing affordability” consultations while ignoring due diligence on their own project boosting housing costs by thousands of dollars in one of the highest priced regions in Canada?
The province’s Local Government Act says, “In setting development cost charges, a local government must take into consideration, whether the charges will:
- deter development;
- discourage the construction of reasonably priced housing or the provision of reasonably priced serviced land.”
Our study shows the CRD’s proposed DCCs does both. The Ministry of Municipal Affairs may refuse approval of a DCC bylaw “if the DCCs are excessive, deter development or discourage construction of reasonably priced housing.”
The CRD still has an opportunity to launch a wide public consultation and revisit the DCCs and their impact on housing supply and affordability.
Otherwise, the BC government should decline approval of the proposed DCC increase based on their own legislation and DCC policies.
Casey Edge is the Executive Director of the Victoria Residential Builders Association
