By Jennifer Smith - Kelowna Capital News - November 21, 2007
After hiring consultant Urban Systems to review their development cost charges gradient, the City of Kelowna wants feedback on a new set of DCCs. The proposal on the table includes new rates for secondary suites, developments with less than four units and very small homes, such as one-bedroom condos, to encourage developers to build more affordable housing.And it appears to have the community’s attention. Tuesday evening more than 20 people sat in council chambers listening to a presentation from the city’s finance manager, Paul Macklem, on the issue.“This is a bigger crowd than we’ve had for a long time at a 20-Year Servicing Plan review,” Macklem said.The DCCs pay for a major portion of the 20-year plan, which looks at the cost of providing city services to residents of Kelowna in years to come. As city staff explain it, DCCs are levied on new development to pay for the infrastructure needs new homes create—everything from roads, to sewers, parkland acquisition, and even transportation costs.
Should the proposals go through, the City of Kelowna would eliminate the current second kitchen concept in all new development in favour of charging reduced fees to developers who build secondary suite zoning right into their subdivisions. The developer would still be asked to pay two DCCs for lots where a house and secondary suite would exist, but unlike the current system, the second set of charges would come at a reduced rate. “I know of three developments who are looking at (building secondary suites into their subdivision),” said Mayor Sharon Shepherd who attended Tuesday’s meeting. One of those is Prospect at Black Mountain, where developer Kathleen MacKenzie has told council she would like to zone for secondary suites, but cannot afford to do so. The city currently charges her the same DCC cost twice on each lot if she adds a suite onto the properties to account for the two homes and that’s too steep even for a developer interested in marketing the mortgage-helper concept, she said. And it’s only going to get steeper.
The DCC charges proposed for 2008 range from $20,405 to $35,117, up roughly 20 per cent over last year. If this new secondary suite rate were adopted, single family homes like in Black Mountain would be charged roughly $31,000 on lots which would have been charged $41,000. But not everyone likes the concept. When presented to council Monday, Coun. Barrie Clark balked, saying it doesn’t deal with the overall issue. “People who are building suites in existing buildings are sponging off all the other taxpayers of Kelowna,” he said. Suites built in existing neighbourhoods, both under the current system and with the new DCC, are charged $500 or the cost of a building permit to make the suite legal. And that could pose a problem for even the reduced rate DCC charge on new development, according to Coun. Norm Letnick. If the reduced rate offer isn’t low enough then it could create a black market of illegal suites, he said, noting developers might skip the zoning and those who move in would just add illegal suites.
The city is also looking at adding a residential six zone for developers who build homes of 600 square feet or smaller. Under this zoning, the developer pays a reduced rate for smaller units, ranging from 15 per cent less than the usual rate for a 600 square foot home to 25 per cent less on a 550 square foot home and 35 per cent less on a 500 square foot home.Several people out to Tuesday’s open house, however, complained it could interfere with good design principles. The development community would prefer to see DCCs charged on a square-foot basis, they said, noting this type of rule creates buildings based on arbitrary regulations; people design to the 600-square foot maximum rather than to the best use of a property.A second open house will be held Thursday from 4 to 7 p.m. at the Ramada Lodge Hotel, located at 2170 Harvey Ave.
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