Some new development fees paid to Metro Vancouver Regional District for water and sewer infrastructure connections could be waived or reduced for new affordable rental housing projects.
The staff of the regional district are contemplating expanding development cost charge waiver policies to also entail inclusionary affordable rental housing, which are mixed-use housing tenure projects — typically with a primary market component, with a secondary smaller proportion of the units being inclusionary below-market rental units.
In real housing supply numbers, such changes could have a relatively minor impact, with the regional district projecting that such a policy change could increase the number of affordable units under the waiver by between 281 to 361 units per year over the 10-year period from 2025 to 2034. It would also reduce break-event rents for affordable housing projects by 4% to 4.4%. These projected outcomes apply to inclusionary housing built by private for-profit developers and then transferred to a non-profit housing operator or government upon completion.
A broader waiver could increase the supply of new below-market rental units by 5.3% to 6.7%, with the same equity invested by affordable housing developers.
If the policy changes go forward, regional district staff recommend requiring the transfer of units to the non-profit partner at no cost with no provision for land cost or profit as one possible measure to help ensure non-profit housing operators see the benefit of the reduced fees to help lower rents and/or achieve more units.
Such an expanded waiver could reduce development cost charge revenue by $5.4 million to $7 million per year.
Under the regional district’s existing waiver policies, between 1,950 and 2,500 affordable units are expected to be supported annually over the next 10 years, reducing the regional district’s potential development cost charge revenues by $38 million to $49 million. The regional district has had waiver programs for affordable housing since 2010, with the policy seeing its last major change in 2018.
Based on provincial legislation, the regional district can waive or reduce its development cost charges for not-for-profit rental housing, including supportive housing, for-profit affordable rental housing, small lots, and projects with a low environmental impact.
Over the past few months, there has been some significant pushback from private developers on the regional district’s substantial increases in development cost charges to fund its long-term infrastructure plans.
Development cost charges paid to the regional district are in addition to the new building fees levied by municipal governments, TransLink, and other entities.