The City of North Vancouver (CNV) wants the province to reform financial tools that enable municipalities to charge for development in the community.
CNV says the current rules around how local government charges for development, including Development Cost Charges (DCC) and Community Amenity Charges (CAC), are inflexible, ad hoc, and far removed from new pressing urban needs such as housing and transit.
What we are asking the province is to modernise and create an expanded system for DCCs that could be more broadly applicable. We are proposing that DCCs be modernised to be able to use for other projects.
Through a resolution to the Union of BC Municipalities (UBCM), the city is urging the province to introduce changes that will create a better system for both developers and the city.
In an interview with The Global Canadian, Michael Epp, the city’s top planner, said the current rules limited how the city could spend funds collected through DCC — a per square foot charge the city applies on new development.
Provincial rules say DCCs collected by the city can only be applied to new civic projects such as a new road network or new sewer pipes.
This creates a problem for CNV which isn’t expanding as much as rebuilding through infill development. The new rules restrict the ability of the city to use the charges effectively. When the DCCs were conceived, they were for expansionary development on the edges of cities.
“It is a tool that pays for new pipes, new sewer, but city doesn’t need new roads or pipes. It needs the quality-of-life amenities and improvements in parks and roads and transit. But DCCs don’t do any of these things,” Epp said.
Epp said because the community was developing through infill and densification within the city, the funds collected through DCCs could not be used for projects that would serve those needs. “What we are asking the province is to modernise and create an expanded system for DCCs that could be more broadly applicable. We are proposing that DCCs be modernised to be able to use for other projects,” he said.
However, Epp said there were certain projects such as the B-line, for which the city could dip into DCC funds, but it wanted the province to enable them to use those funds for other projects. CNV is also asking the province to take a good hard look at Community Amenity Contribution (CAC), funds or amenities that city gets from the developers after a negotiation.
It is a time-consuming, uncertain, and an ad hoc method and CNV is asking the province to introduce a more consistent approach to land-value capture and a system that doesn’t rely solely on negotiations. Lack of a consistency and negotiations means every city is left to its own devices when it comes to negotiating community contributions.
Vancouver, Epp said, hired an economist to do a land-value capture on the development being proposed.
In 2014, CNV introduced two zones where developers are asked to pay $190 per square feet and $160 per square feet for development. “It gives the developer a heads-up and they know what we would be asking them if they come to see us. Before 2014, they would buy the land and then come to the city so it was an ideal system,” Epp said.
There also needs to be a better system for how the city can closely align charging for growth with its needs such as transit. A reformed system might give the city more flexibility, for example, in charging for land that may be close to a specific transit corridor. CACs from that land could then be used for that particular transit system.
Other ideas for a better system include folding DCCs into CACs and creating new flexible categories for which the funds can be used.
Epp said the city’s resolution didn’t mean the current systems were broken or not working, but there was a need to better the present systems. He said the city was aware that the province wanted to review the development approval process so it was less frustrating for everyone involved.
“We think one of the precursors to improve that system is to improve the way that municipalities are able to use the DCCs and enable us on CACs so as there isn’t such an arduous process of negotiations,” he said.
A reformed system would work for everyone. “The developer needs to make a profit and we want a share of that pie so what we want is a win-win for everyone,” Epp said.