West Kelowna's proposed fee hike will negatively impact housing affordability: CHBA
The cost of building a single-family home in West Kelowna could jump by about $10,000 if new charges to developers are approved.
A report going to council today, Dec. 14, recommends one of six options to boost development cost charges for a single-family house from the current level of $18,481 to $26,215. The most expensive option would see the fee go to $28,249.
“Our concern is always that, as those costs increase, the cost of housing increases and we’re already past the tipping point of affordability,” Darren Witt, president of the Canadian Home Builders’ Association of Central Okanagan, said when told of the proposed changes.
Any such fees end up being passed on to the homeowner.
While it cuts into the affordability of new homes, Witt doesn’t see any alternative to development cost charges that won’t have a huge impact on taxes.
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All he can hope for is that the reason and the amount of the fees is clearly explained and justified. That's not often the case, he said.
“We’re trying to open up dialogue with all the local jurisdictions to in order to make sure there is some accountability so we can go to our membership and, eventually, the paying customer and say, here’s how the numbers are arrived at,” Witt said.
The existing fees were set in 2016 but, since then, things like the costs of construction and land have gone up considerably. The cost of parkland is up 49%, the report says.
The development cost charges vary depending on the type of construction, with large lot single-family homes carrying the highest fee. There are also charges for new commercial, industrial and institutional construction.
The idea behind the fees is that new growth should pay for the roads, sewers, drainage, water and parks that new residents will need.
Current residents are expected to pay at least one per cent of the new costs but sometimes pay more. Right now, developers only pay 75% of the cost of buying parkland and developing it. The report recommends that be cut to one per cent.
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The proposed new rate for a single-family house, with existing sewage fees, ranges from $30,409 to $32,762, depending on what sewer line it’s connected to.
That’s about the same as is currently charged in Lake Country ($30,663 ) and Kelowna Inner City ($30,988) but far below the South Mission neighbourhood of Kelowna ($48,507), the report says.
But the proposed new fees are higher than those proposed for Westbank First Nation ($24,184-$25,986) and existing fees in Vernon ($20,168-$27,093), Peachland ($19,909) or Penticton ($16,297-$21,465), the report says.
The proposed changes are to go to stakeholders and the public for input in January and February before going back to council for a final decision later in the year.
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