Developers in the District of Clearwater could see a $10,000 jump in development cost charges (DCCs) for single-family homes if an update to its DCC bylaw is approved.
Chris Crowell, of TRUE Consulting, presented the draft bylaw update to District of Clearwater mayor and council Tuesday, Jan. 17. He noted the last update to Clearwater’s DCC bylaw in 2014 saw a rate of $7,210 for builders. The proposed update to the bylaw would see almost $10,000 per home added to that amount. Over half of the proposed increase is due to water projects.
In comparison, Kamloops’ rate is $11,245, Osoyoos charges $9,270 and Kelowna’s is just under $25,000, according to the city’s website.
Municipalities collect DCCs from new development projects to help pay for the cost of infrastructure services directly or indirectly affected by community growth. The idea is that DCCs reduce the tax burden on existing taxpayers to help pay for upgrades to roads, sewer, drinking water, drainage and parkland improvements and acquisitions.
They are not used to pay for local roads or utilities, operation and maintenance of infrastructure or parks, upgrades for the existing population or for new municipal buildings, such as libraries, fire halls and police stations or parks.
DCC rates are based on population growth, which is calculated to be about 262 people in DOC over the next two years, or one per cent of the population per year. In calculating the DCC, project costs are separated into district-funded and DCC recoverable over 10 years, minus any reserves.
From there, an amount is found per capita for each project. The cost-per-capital amount is added together to find the DCC for various new developments, including single-family homes, multi-family homes and commercial.
Crowell noted there are options to lower the proposed amount, including increasing the municipal assist factor (costs paid by the district) from the current one per cent to 40 per cent, which would lower the DCC for single-family homes to $9,489. Considering the expense of the water projects, the municipal assist factor could be raised to 75 per cent for just those projects, further lowering the DCC.
Another option is to remove the biggest expense from the list of water projects - the Sunshine Valley reservoir - which would lower the DCC by about $7,000.
Coun. Lucy Taylor asked whether property values should be taken into account when discussing DCCs, noting the value of a single-family lot varies depending on location, adding the goal may be to balance Clearwater’s attractiveness to develop with obtaining funding for bigger projects.
Though more information was needed, Crowell agreed it was important to consider.
Coun. Bill Haring was concerned about the high DCC amount, which could potentially be added to tens of thousands of dollars in BC Step Code dollars, making the cost to build a home substantially higher, not including building costs. He wondered why the district has DCCs in the first place.
Mayor Merlin Blackwell stressed to council that the DCC bylaw as presented is only a draft version and there will be time at a later date for further discussion of it and the draft infrastructure master plan.
Council voted to refer the draft DCC bylaw to the Community and Economic Development and Infrastructure Standing Committee for review.