Are civic fees and levies charged to developers driving up the cost of housing?
It’s the latest debate as politicians try to figure out how to address Vancouver’s housing affordability crisis.
The province said in the Speech from the Throne this week that local governments will soon be forced to reveal how fees and levies imposed on developers add to the cost of new housing:
“Your government will work with municipalities to reduce the hidden costs in home purchases, and to make those hidden costs clear and transparent to the homebuyer.”
But are civic fees really jacking up prices? It’s an allegation Vancouver’s mayor flat out rejects.
“The premier did talk about hidden costs but from my perspective that is a red herring. Cities collect fees from developers to invest into community centres, parks, child care, and affordable housing. If we didn’t collect those fees they would be developer profits because the market sets the price the city has nothing to do with the prices on the market.”
Instead he argues affordability could be tackled with an empty home tax, with people holding property as a business paying a higher rate.
Supply and demand
She says it’s not strictly a matter of the fees being passed on to consumers, but rather effecting developers calculations and helping distort the market.
“[It] means a developer is going to buy land knowing how much all of the fees and charges are, and hold that land, and only develop it when the market goes up. So what you are doing is restricting supply, and demand is increasing, and then the price goes up.”
Vancouver rakes in hundreds of millions in annual fees charged to developers, which go towards amenities and social housing.
With files from Shelby Thom and Shane Woodford