City reduces development-charge hike proposal

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This article was published 17/01/2024 (985 days ago), so information in it may no longer be current.

The City of Brandon has lowered its proposed development cost charge increases after consultations with developers and construction industries stakeholders.

At the end of a pre-budget special meeting of Brandon City Council, general manager of development services Mark Allard provided an update into the work being done to update the charges, which were first adopted in 2019 and have not been updated other than slight increases tied to Manitoba’s consumer price index.

The charges are levied as financial contributions from developers toward infrastructure improvements they will benefit from.

In feedback sessions with stakeholders after the release of the draft plan, Allard said the city went over the city’s proposed 10-year capital plan.

“They were questioning and challenged us on some of the expenditures that we’re putting towards development cost charges,” Allard said.

Allard’s presentation slides stated developers were concerned with whether it was appropriate for debt financing costs to be included in the city’s rate study, low grant projections and the lack of post-period benefit calculations for projects benefiting the city for longer than the 20-year span the review looked at.

The developers said the significant increases in the city’s initial proposal would drive development out of the city.

After the first feedback session with developers, Allard said the city has slightly altered its definition of what projects are tied to development cost charges, eliminated the cost of some infrastructure upgrades beyond the 20-year scope of the review and reassessed some of the charges relating to water and wastewater treatment.

Currently, the city charges developers $7,938 for each unit of low-density housing they build and $5,135 per unit of high-density housing under the development cost charge program.

In the initial proposal, the development cost charge per low-density housing unit was $38,564, $28,496 per high-density unit and $11.94 per square foot for non-residential developments.

The revised proposal is a per-unit cost of $26,552 for low-density housing and $19,620 for high-density housing, with a $8.22 charge per square foot for non-residential developments.

“There is a more than doubling of these rates, but certainly not to the degree of the first draft,” Allard said.

According to Allard, the city is hoping to meet with stakeholders like the Construction Association of Rural Manitoba to discuss their concerns in the next few weeks.

In a phone interview on Tuesday, Allard said when it comes to the post-period benefits, some projects had costs frontloaded into the 20-year scope of the study and have now been spread out across the infrastructure’s full lifespan.

When it comes to low projections of grant money from higher levels of government, Allard said because the city is looking at projects many years down the line, but grants are announced a year or two ahead of time, the assumption has to be that there is no grant funding. However, if funds are received, the city can adjust its charges going forward.

He said he hoped to present city council with a final report on suggested DCC increases sometime in February.

Reached by phone Tuesday afternoon, CARM executive director Shawn Wood said his organization’s concern was largely about how much more expensive the proposed increases would make it to develop, especially amidst national conversations about the necessity of affordable housing.

“The price per door on a house would go from the just under $8,000 that’s being paid right now in DCC charges to $38,000,” he said. “Our concern is, well, how do you want us to build affordable housing when really your price for the house is going to go up by $30,000.”

The association’s other main concern, he said, was in how city administration came to the new charges they’re proposing.

Wood had not yet received the revised figures being proposed by the city, but the Sun informed him what was being proposed on Monday.

He said building a 15,000-square-foot warehouse in the Red River Planning District — which represents several municipalities surrounding Winnipeg — would cost developers around $27,500 in development cost charges. In Brandon, even under the reduced proposal, it would cost developers $123,300 in charges.

“Why would (developers) build in Brandon when it’s going to cost then $100,000 or more to do the same sized building as somewhere else?”

If the city wants to see growth, Wood said contractors don’t have an issue paying a portion toward the infrastructure facilitating it, but that they want to see the city show it’s committed to paying its share as well.

According to him, CARM is set to meet with the city to further discuss the matter on Jan. 26.

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