A house under construction in Clifton Road area of Kelowna.

(JOHN MCDONALD / iNFOnews.ca)

KELOWNA - When it comes to building new homes, developers have a lot of stuff to buy – from the concrete for the basement to the lumber in the walls to the electrical wires running through those walls.

But, when it comes to owning that home, the buyers need to pay for a lot more than the raw materials to put into the product and the labour to make it all fit together properly. They also pay for many of the expenses and expensive new rules the city charges or makes developers follow when building new properties. 

“It’s between $40,000 and $48,000, which is just (Development Cost Charges) so, on a $200,000 condo that’s a huge chunk,” Cassidy deVeer, president of the Central Okanagan branch of the Canadian Home Builders’ Association recently told iNFOnews.ca.

That was shortly after the city proposed adding $7,346 to the existing costs of each new home in order to develop parks.

Development Cost Charges are added to the price of each new housing unit and passed on the customers.

When the city first proposed the new fee, staff told council that, because of a competitive marketplace, those costs were only partially passed on to buyers.

Not true, deVeer said.

“They are 100 per cent passed on,” she said.

Development costs differ by the area of the city where something is built so an average number is not appropriate.

Most expensive is the South Mission where the road portion alone is almost $28,000, versus one-third of that for the inner city. It’s also cheaper for higher density developments than single family.

What doesn’t change by location and density, however, are the parks fees, currently at $7,142 just to buy land. The new fee, which will help pay to actually build the parks, brings that total to $14,448, whether it’s a $200,000 condo or a multi-million dollar mansion by the lake.

That new fee has yet to be adopted but city staff hope to start collecting next year. Another change the city recently made also add to the costs.

In May, council made it mandatory to improve the energy efficiency of new homes, something that an earlier report from the homebuilders’ association estimated would add well over $10,000 to the cost of new homes.

Those will be building material costs for things like better insulation, windows and tighter fitting doors, but the cost of hiring an “energy advisor” adds another $1,500 to the non-material cost of the building.

Then there are the building permits, which are based on the value of the house. That means a $500,000 house will cost about $4,250 just for the building permit. If you're keeping track, that's almost $65,000 of the cost of any new home in Kelowna — and that's just local taxes and burdens.

A more complete picture of the tax impacts on affordable housing is coming out this week from the home builders.

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