City of Vancouver considers increasing taxes on property development

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      Vancouver may collect more money from developers to pay for additional services for residents.

      City hall is currently reviewing the development cost levy (DCL), which is charged per square foot on developed properties.

      “If we are taking too little for DCLs, we’re effectively subsidizing the development sector, and we shouldn’t be doing that,” Coun. Geoff Meggs told the Georgia Straight in a phone interview.

      Depending on the area and type of development, the city charges different rates, which are adjusted annually for inflation.

      For example, the DCL for residential and commercial developments in most areas of the city for a building that has a floor-space ratio (FSR) larger than 1.2 is $13.91 per square foot as of September 30, 2016. (The floor-space ratio is obtained by dividing the combined area of all floors in a development or building by the area of the site upon which it is built.)

      Further, the DCL for the same type of developments is 90 cents in the Grandview Highway and Boundary Road area. In the Dundas and Wall streets area, it’s $3.56. In Downtown South, it’s $19.09.

      In 2015, the city collected $94.7 million in development levies. Monies collected from developers help pay for parks, childcare facilities, social housing, and engineering infrastructure like transportation, water, sewer, and drainage.

      In addition to the rate structure, city staff have also been directed by council to look into new types of allocations for DCL money.

      “It could be whether or not there should be other functions of the city that are necessary,” Meggs explained. “It could be public-realm improvements that are not in a park. Plazas. It could be public art, which is now paid, normally, by community-amenity contribution.”

      Community-amenity contributions are made by developers in rezoning projects. DCLs are paid for most developments, including those covered by rezoning.

      “I’m sure they would prefer it would stay lower,” Meggs said about the development industry in connection to a possible DCL rate increase. “But that’s just too bad. I don’t see an impact [on housing affordability] because, you know, we’ve seen…the price of housing rise and rise and rise. I don’t think these charges are what determine the final price of housing. The price is determined by supply and demand in the marketplace.”

      The DCL review is expected to be completed in April 2017.