Developers to be dinged ( KAMLOOPS)

By MARKUS ERMISCHStaff reporterJul 30 2006 http://www.kamloopsthisweek.com/
Kamloops homebuilders expect a “considerable hike” in development cost charges as city hall adjusts its estimates for what it costs to extend city infrastructure to new developments. And since development cost charges (DCCs) are usually passed on to homebuyers, it could herald even higher housing prices.Although homebuilders often oppose high development cost charges (DCCs), the fees, and the frequency at which they are reviewed, point toward a vibrant economy and a growing city. Last week, city officials met with representatives of the Kamloops chapter of the Canadian Home Builders’ Association to solicit input into the biannual DCC review. Patsy Bourassa, the organization’s executive officer, said that although the discussions are at the preliminary stage, she expects a “considerable hike” of DCCs this fall, which would take effect in early 2007. After the most recent review in 2004, DCCs for a single-family home increased to $6,758 from $4,658, and commercial DCCs increased to $43 per square metre from $33 per square metre. At the time, council opted to give a 10 per cent assist factor for road DCCs. An assist factor lessens an increase by subsidizing DCCs through another source of revenue. So far, the city has not mentioned an assist factor during this year’s review discussions, Bourassa said. David Trawin, who heads development services at the city, said the dollar amount of growth-related DCC projects — such as extending roads, sewers and water to new developments — has increased by 50 per cent, to $60 million from about $40 million. This means that DCCs must rise by a similar amount unless they are subsidized from another funding source. By law, the city is not allowed to run a deficit. Farther to the north, the City of Prince George is also reviewing its DCCs — for the first time in nine years. A stagnant economy, which has only picked up in the last two years, has made DCC adjustments redundant as little new development has been seen in the forestry town. In 1997, Prince George city council decided on a 50 per cent DCC assist factor. However, comparing DCCs between cities is futile, said Dave Dyer, chief engineer with the City of Prince George, because of different levels of taxation and land prices. In addition, Dyer added, some cities in British Columbia, such as Fort St. John, do not even charge DCCs, but have higher tax rates. Prince George is also different from Kamloops in that it divides the city into sectors. Different DCCs apply to different sectors.
Trawin said Kamloops opted against doing likwise because the cost to extend city infrastructure is approximately the same across the city.