Lake Country takes a risk in approving large hike in development cost charges

Photo: District of Lake Country

The District of Lake Country found itself between a rock and a hard place.

Approve a massive increase in development cost charges and risk a slowdown in new home construction during a time when new housing is critical to meet growing demand, or phase in the increases and risk falling further behind in creation of critical infrastructure needed to satisfy a growing community.

Council on Tuesday chose the former.

For the first time in a decade, the district raised DCC’s, the amount paid by developers to help pay for infrastructure such as roads, bike paths, sidewalks, parks, sewer and water.

Typically, municipalities review DCC’s every five years to soften the blow, however, development charges have not been reviewed in Lake Country since the last set of charges were adopted in 2016.

The new development fees would see developers pay $47,246 per lot for single detached homes, $35,187 for each unit within a multi-family building, $11,199 for an accessory dwelling unit and between $130 and $138 per square metre of gross floor area for commercial, industrial and institutional construction.

Depending on the type of development, increases are between 44 and 75 per cent. Single detached homes increase $16,583 while multi-family residential go up $10,780 per unit.

The increase would not take effect right away. The bylaw would include a one year protection period for those with applications in stream from the date of final adoption.

The Kelowna branch of the Urban Development Institute which represents the development industry suggested phasing in the increase over three years, 50 per cent in year one, 75 per cent in year two and 100 per cent in year three.

“It’s a fair and balanced solution to ensuring the district’s growth is well supplied while remaining manageable for developers,” said UDI spokesman Rich Threfall during a presentation to council.

“The phased approach better allows developers to absorb costs over time, encourages continued growth and reduces the risk of slowing development.”

Threfall says with more than 3,000 new units needed by 2031, these increases dramatically reduce the chances of achieving those goals. He says it will increase the cost of purchasing a new home and increase rental costs.

“This is a risk,” said Coun. at large Michael Lewis, the only councillor to agree with the phased-in approach.

“I can’t support it. I would go with a phased-in approach while we work these details out and get accurate numbers.”

However, Mayor Blair Ireland and the rest of council disagreed.

“We need to work together. We need houses. You build houses, we don’t build houses,” said Ireland.

“At the same time we are a community that is not big on infrastructure. We don’t have a lot.

“We have worked hard to provide tax incentives so a lot of the new development is not going to pay taxes for 10 years.”

He says the only monies the district will receive is through DCC’s.

Ireland also suggested the fee hikes wouldn’t be necessary if the district received the level of funding it needed from senior levels of government, an idea expanded on by Carrs Landing Coun. Cara Reed.

She said both UBCM and FCM are advocating for constant and guaranteed infrastructure funding, “so it doesn't become a bun fight between every municipality trying to grab a limited amount of grants for critical infrastructure.”