It’s your opportunity to be heard on DCCs

Opinion

Hey there, time traveller!
This article was published 14/12/2024 (277 days ago), so information in it may no longer be current.

Whether you believe that growth should pay for growth, or want to chip some cash into a “dollars for developers” fund — this is your chance to be heard.

After more than two years of debate at the city council table and behind-closed-doors negotiations with real estate developers, Brandonites will finally have their opportunity to tell our city council on Monday at 7 p.m. what they think about the proposed changes to Brandon’s development cost charges bylaw.

For those who haven’t been following the issue, Brandon City Council passed the current DCC bylaw in 2018. The goal was to ensure that developers contribute toward the cost of infrastructure upgrades and maintenance costs that are often incurred due to construction projects in the city. The bylaw and rate schedule was implemented in 2019 and has remained largely unchanged since then.

Since at least 2022, city council has acknowledged that the DCC rates are too low, admitting they do not come close to covering the substantial costs incurred by the city with respect to most development projects. In May of last year, the city hired consultants to review the DCC rates and make recommendations as to how the issue should be handled in the future.

In December of last year, the first draft of the consultants’ recommendations was unveiled. On average, the fees would increase by about 400 per cent. They would reflect a “cost recovery” approach to the expenses incurred by the city with each infrastructure project, along with the debt-servicing charges it incurs with respect to each of those projects.

In response, developers and other stakeholders argued the new fees would make new construction too expensive, would drive developers and construction workers out of town, and would harm our local economy. Those arguments were obviously persuasive, as the recommended charges were reduced by one-third days later.

This past August, city hall released an updated DCC plan, with even lower development charges. Under that plan, rates for low-density residential projects in “emerging areas” would rise from $8,184 per unit to $21,193 per unit. For high-density projects, rates would climb from $5,294 per unit to $15,660 per unit. For non-residential projects, the rate would increase from $4.70 per square foot to $8.62 per square foot.

In “established areas,” the rates for low-density residential projects would climb $911 per unit to $12,805 per unit. For high-density projects, they would rise from $589 per unit to $9,462 per unit. For non-residential projects, rates would increase from $0.53 per square foot to $5.21 per square foot.

Those are hefty fee increases, but remember that it was widely acknowledged that the original development cost charges were far too low. They came nowhere close to recovering the costs the city was incurring for new development and re-development projects.

In response to the latest proposed fee schedule, developers argue that the planned DCCs are still far too high. They claim the fees will hurt the city’s economy because (they say) it will eventually result in higher rental and purchase costs for consumers. They want the proposed fees lowered, or the increases phased in over time.

This is the question city council must resolve: Do they go ahead with DCCs that come closer to recovering the city’s costs, or do they give in to the developers’ demands? In considering the question, our councillors should consider several points.

First, DCCs are fees that many local governments across the country commonly charge developers and builders to cover the cost of new infrastructure, which can include water supply and treatment, sewage collection and treatment, drainage facilities, major road upgrades, fire and police, solid waste facilities, new park acquisitions, libraries, schools and recreation centres.

Second, DCCs are intended to be paid by those who benefit from the new development, based on the “user pay” or “benefiter pay” principle. In other words, the approach is premised on the expectation that the costs will ultimately be passed on to the people who purchase or rent the new homes in the new neighbourhoods.

That seems entirely fair. After all, it would be unfair to force a family living on Franklin Street, in Brandon’s east end, to pay higher taxes in order to cover the costs of new infrastructure required for a new housing project on the edge of the city. Unfortunately, Brandon’s current DCC proposal does not include many of the costs listed above, meaning they would still be passed on to all taxpayers. That seems entirely unfair.

Third, there is a flaw in the developers’ argument that the proposed DCCs will result in higher rental and housing costs for Brandonites. It ignores the reality that home builders always sell new homes, and rent out new apartments, for as much as the market is prepared to pay.

That’s a basic economic principle. Whether the home price or rental rate includes a development cost charge is irrelevant. Builders and developers are always going to charge as much as they can, whether it includes a DCC or not. Lower DCCs would not result in lower rental rates and home prices.

That leads to the fourth and final point: This isn’t about Brandonites’ ability to afford new homes or apartments; it’s about developers’ profits and indirect subsidies for new home buyers.

It’s about ordinary Brandonites from other areas of the city, who will derive zero benefit from the new developments, being forced to pay higher taxes in order to cover costs incurred by the city because of those new projects.

If that sounds unfair to you — or, if you think that’s just fine — Monday night’s public hearing may be your only opportunity to tell our mayor and city council what you think should be done.