File photo (Image credit: CFJC Today).

By Mel Rothenburger

ARMCHAIR MAYOR

ROTHENBURGER: Tax exemptions for developers won’t solve the housing crunch

Apr 4, 2024 | 5:55 AM

DEVELOPMENT COST CHARGES don’t make for exciting reading. In fact, a lot of people probably don’t even know what they are, but they go to the root of a very important question: how much should residents be expected to pay so land developers can increase their profits?

Right now, with the provincial government rushing pell-mell into control over local planning in order to build more housing, one line of thinking is that putting more money into the hands of developers will lead to an increase in housing construction.

DCCs, as they’re commonly known, are charged to developers to pay for infrastructure such as water and sewer, so existing taxpayers don’t have to. Otherwise, everyone else would be subsidizing new or relocating residents, and that wouldn’t be fair.

But one proposal is to waive DCCs for purpose-built for-profit affordable rental housing in order to encourage developers to build more such housing. While developers often complain about DCCs, others point out the DCCs are passed on to the new homeowners anyway, so eliminating them has little impact on the rate of construction.

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DCCs were a topic of discussion at a meeting of the economic health select committee of council. A staff report said taking DCCs off the table would be a problem because the City lacks financial and staff resources to support such a program. But it also pointed out that such a waiver would result in a tax increase to cover the loss.

So, leave the DCCs where they are. Another proposal, to expand tax exemptions for revitalization — that is, improvements — to include purpose-built rental properties, found some favour.

Premier David Eby insists government intervention is needed to deal with the housing crunch but a sound argument can be made that if there’s a demand, the free market will handle it, and that tax exemptions of any kind for developers will solve little and cost a lot.

I’m Mel Rothenburger, the Armchair Mayor.

Mel Rothenburger is a regular contributor to CFJC Today, publishes the ArmchairMayor.ca opinion website, and is a recipient of the Jack Webster Foundation Lifetime Achievement Award. He has served as mayor of Kamloops, school board chair and TNRD director, and is a retired daily newspaper editor. He can be reached at mrothenburger@armchairmayor.ca.

Editor’s Note: This opinion piece reflects the views of its author, and does not necessarily represent the views of CFJC Today or Pattison Media.