Developers could pay 10% more in Kelowna

Kelowna Courier Oct. 5

Builders of new homes in Kelowna likely will have to pay 10 per cent more in development cost charges to the city next year. Council on Monday will be asked to approve another rise in the DCCs, which are payments made by builders to cover the cost of off-site infrastructure improvements. Among other things, the DCCs help finance upgrades to roads, waterlines, parks and the sewage treatment system. As of next February, the builder of a new single-family home in the central area of the city would pay $22,200 in DCCs, up from $20,300 this year. Three years ago, the comparable DCC was only $12,300. Run-ups in the cost of construction and land prices are said to be behind the increase in DCCs. The proposed increases are contained in the annual updating of the city‘s 20-year servicing plan. The total cost of providing all the new roads, parks, water and sewer lines needed to keep pace with growth in the next two decades is now estimated to be $983 million, up from last year‘s projection of $905 million.

Funds collected from developers account for three-quarters of this total, with the principle being that they should cover much of the pressures created by new growth. Other sources of funding for the 20-year servicing plan are taxation (17 per cent) and government grants (five per cent). Spending on roads and transportation makes up the largest portion of the 20-year plan, at more than $600 million. Parkland acquisition is pegged at $167 million, and waste-water treatment plant spending is estimated at close to $100 million. Details of the servicing plan have not changed significantly from last year. The update simply forecasts the new cost of doing all the projects staff say are necessary to accommodate projected growth. If approved, the DCCs will have nearly doubled in four years. However, city staff say that the charges actually represent a smaller percentage of a new home‘s total cost than a decade ago.