Developers could possibly be hit by higher fees in Vernon. City staff are currently doing an update on development cost charges, and Coun. Pat Cochrane hopes they will increase based on the current strong pace of construction. “The longer we wait to review DCCs, the deeper hole we’re digging for ourselves,” he said at council Tuesday. DCCs are charged by the city for each unit developed, and the money is to go to community infrastructure such as roads. But Cochrane believes the existing DCC rate is not keeping up with the value of construction. “Every month that goes by, we are losing out. How many more millions will we have potentially lost?” he said. Cochrane points to Kelowna where DCCs increased by 30 per cent in 2006 and that community is now considering another hike of 20 to 25 per cent to assist with infrastructure.
In Vernon, DCCs are about $9,800 per residential unit. That climbs to about $13,000 when water and parks and recreation are factored in, but those rates are dictated by the Greater Vernon Services Committee.The city staff report could be done within a month, but Coun. Barry Beardsell hopes council will tackle the issue sooner. “Time is of the essence,” said Beardsell, who shares many of Cochrane’s concerns.“Every month that goes by, we are falling behind the eight-ball and the existing taxpayers are picking up the difference.”
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Don Quixote Note: The GVSC in August of this year also raised their Park DCC's by about 30%. I have been calling for a full cost review of the DCC's for over 2 years and indeed an annual review based on cost should be done. Last night at the Attainable Housing Meeting one of their main focus was for a program of sector DCC's. By waiting so long just to raise the DCC's based on cost alone the City may find itself causing the slowdown of such attainable housing if Sector DCC's are endorsed but not implemented at the same time.If cost based DCC's are finally announced at a 30-40% increased rate as I predict and then the second part of the announced DCC rate strategy of looking at the philosophy of DCC's such as sector and sq. footage type rates etc. we may face a slowdown of intercore building. Any developer looking to build a large number of townhouse units in the inner core and established areas of the city may postpone the decision until the expected 40-50% sector reduced DCC's in his building area are actually proclaimed. The timing of a reduction or a moratorium on DCC's for secondary suites without proper inclusion in a revised DCC bylaw may either cause those DCC's to be absorbed by taxpayers if the Secondary Suite policy is enacted or a deferral of the building and legalizing of secondary suites if the Secondary Suite policy is not enacted.
This City and Council have created their own Pandora's box by dragging their heals on DCC review and reform. Beardsell has always pressed for DCC review and Cochrane is rightfully pressing for this long overdue review so I hope the rest of the Council will finally accept that this is of the highest priority for the taxpayer who is picking up an unnecessary share of infrastructure development costs for new construction. In 2005 we implemented and then reversed ourselves and gave a grace period of 3 months on DCC's to the development community. That caused a $2.3 million fiasco. This long delay of addressing DCC's may cost us considerably more.
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