Bill 27: lowering B.C. housing prices or bankrupting municipalities?

At the Union of British Columbia Municipalities convention last September, Premier Gordon Campbell promised to reward developers of green housing projects with “faster approvals”. The premier also pledged to introduce measures to allow buyers “to avoid costs for municipal services that they just won’t use”.

This spring, the B.C. Liberal government followed up by introducing Bill 27, called the Local Government (Green Communities) Statutes Amendment Act, 2008. On Friday (June 20), the board of Metro Vancouver will vote on a staff recommendation to report back to three committees—housing, finance, and waste management—about one aspect of the bill: waiving development-cost charges on affordable-housing projects.

Under the legislation, developers of small housing units—defined to be no larger than 29 square metres—will be exempt from paying development-cost charges to municipalities. They’ll also be exempt from paying school-acquisition charges. The intention is to lower the cost of development. The theory is that it would ultimately enable more renters to buy homes.

However, NDP housing critic Diane Thorne and NDP MLA Gregor Robertson have claimed that exempting development-cost charges—which cover the cost of building sewer connections, sidewalks, roads, parks, libraries, and other infrastructure—will create bigger financial burdens for local governments.

The bill, which sailed through third reading last month, also promotes “development permit areas” to achieve more efficient uses of energy and water, and also to reduce greenhouse-gas emissions. Once the bill is proclaimed into law, local governments may waive development-cost charges on an “eligible development”, defined as not-for-profit and for-profit rental housing, subdivisions of small lots, and developments that result in a low environmental impact.

Thorne, a former Coquitlam city councillor, told the legislature’s committee of the whole house last month that municipal councils already have discretionary powers to waive development-cost charges. However, they don’t do this, because they need the money. “The municipalities and cities are the least able to afford this kind of requirement,” she claimed in the Hansard transcript of the proceedings. “On the one hand, the province is encouraging local governments to have density and environmentally friendly developments, but there’s no help, no support to help accomplish any of those worthy goals.”

Of interest to Vancouverites is a section allowing local governments to reduce off-street parking requirements in return for a cash-in-lieu contribution from a developer. This money would support public transit as well pedestrian and cycling networks.

Robertson, Vision Vancouver’s mayoral candidate, told the committee of the whole house in May that he generally supported “the intentions and aspirations of Bill 27”, according to Hansard. “However, if all of these good intentions conflict with the ability for local government to actually implement and survive on the scrawny budgets that only property taxes and the charges and levies which they are empowered to collect provide, then we’re going to have problems down the road here,” he said.

Both Robertson and his rival, NPA mayoral candidate Peter Ladner, are each trying to present themselves as the best candidate to solve the housing crisis. Robertson has proposed preventing the closure of low-income housing for safety violations. He has also recommended imposing fees on the owners of vacant suites. In addition, Robertson has suggested strengthening the anti-conversion single-room-accommodation bylaw.

Ladner thinks Ottawa should scrap capital-gains taxes on the sale of apartment buildings if proceeds are reinvested in rental housing. He has also suggested that the federal government institute tax breaks for developers who build rental housing. City council slowed the rate of change by forcing developers to replace rental units if they want to tear down apartment buildings.

Bill 27 hasn’t been proclaimed, so it’s too early to say if it will become an issue in the Vancouver mayoral race. However, if Robertson continues raising objections to forgiving development-cost charges for developers—and Ladner does the opposite to promote more affordable housing—there will be another difference for voters to consider when they go to the polls this November.