Metro Vancouver considers incentives to bring more rental housing development

Metro Vancouver staff said that six of 19 municipalities already have bylaws that waive or reduce development cost charges for affordable rental housing

Published Jan 07, 2025  •  Last updated 0 minutes ago  •  3 minute read

Workers at a building under construction in Vancouver. Photo by Jason Payne /PNG

Metro Vancouver is considering waiving fees that help cover the cost of connecting new developments to water and sewer infrastructure as a way to get developers to build more affordable rental housing.

Anne McMullin, president of the Urban Development Institute, which represents the developers, said Monday the proposal to waive so-called development cost charges, or DCCs, for building more “inclusionary housing” is a positive step.

Article content

“Inclusionary units are below-market units that already cost the developer. They are charging DCCs on what is part of an amenity contribution so it makes sense to have a waiver,” she said.

In the city of Vancouver, McMullin said, affordable or inclusionary housing units make up 20 per cent of the total number of units in rental projects. The ratios in other Metro municipalities vary.

She said it would allow more developers to build below-market rentals.

In a report for a committee meeting this week, Metro Vancouver staff said that six of 19 municipalities already have bylaws that waive or reduce development cost charges for affordable rental housing. It is anticipated that as new provincial housing legislation enables all municipalities to increase zoning for affordable housing, there will be more projects that have a mix of market and below-market units, so Metro set out to review how the charges might hurt the viability of these projects.

Currently, development cost charges related to regional liquid waste and water are waived only for housing that is owned by a not-profit society, B.C. Housing, the Canada Mortgage and Housing Corporation or a registered charity. This has been in place since 2010.

Article content

Article content

More affordable rental housing is needed, says Metro Vancouver Photo by Arlen Redekop /PNG

Based on that, it’s projected that between 1,950 and 2,500 affordable units will receive a waiver each year, on average, between 2024 and 2033, representing an estimated 10-year loss in revenue to Metro Vancouver of about $38 million to $49 million a year.

If the waivers are expanded to below-market-rent projects built by private developers, the number of affordable units receiving a waiver is anticipated to increase by an average of 281 to 361 units a year between 2024 and 2033, representing an additional $5.4 million to $7 million per year loss in revenue.

It was recently announced that Metro Vancouver will get $250 million in federal support for designing its $10 billion Iona wastewater treatment plant upgrade. The commitment by Ottawa will come from the $6 billion Canada Housing Infrastructure Fund created in April 2024 by then-federal housing minister Sean Fraser and announced in the government’s fall economic update. It matches a $250 million provincial contribution for designing the major project.

The federal contribution is still subject to a deal being reached between the provincial and federal governments, and it’s not clear if it will include one particular requirement. According to the program’s website, requirements include that applicants allow four units of housing per lot in low-density neighbourhoods and that they freeze, for three years, increases in development fees above the rates in effect as of April 2, 2024.

Article content

In the fall, a number of developers sent letters asking Metro to at least delay the increases for two years to ensure projects already underway were finished under the existing rates. They also wanted Metro to allow developers to pay the fees after project completion instead of before construction started.

However, Metro Vancouver’s development cost charges are slated to go up substantially over three years, with the first increase having happened on Jan. 1.

With files from Derrick Penner 

[email protected]

Recommended from Editorial

1. 

   Construction firms, builders join developers in tussle over fee hikes for new homes

2. 

   Federal government commits $250 million to design of Metro Vancouver's Iona sewage plant replacement

Article content