As it continues its efforts to chip away at housing shortages, B.C. is making changes to the way municipalities collect money from developers to ease the financial burden of up-front costs.
Housing and Municipal Affairs Minister Ravi Kahlon announced on Wednesday (July 2) that the province is altering the timing of when builders must pay development cost charges for large projects so that 75 per cent of the fees are not due until occupancy or four years, whichever comes first.
Surrey Mayor Brenda Locke said she expected the change to help get "shovels in the ground sooner."
Municipalities will still be able to collect 25 per cent of development cost charges up front, and this only impacts projects in which these charges exceed $50,000. Surety bonds will be used to ensure municipalities get paid. The change is effective Jan. 1, 2026.
"It doesn't affect the local government much at all by collecting at the time of occupancy versus right up front," said Delta Mayor George Harvie. "They don't even connect to the infrastructure until the time of occupancy. So this makes just common sense."
Municipalities use development cost charges to pay for infrastructure upgrades such as sewers, sidewalks and water hookups. Before this change, developers had to pay one-third of the charge when the building permit was approved, and the remainder within two years of that date, regardless of whether the project was finished.
Kahlon said the increasing cost of building materials and decreasing cost of housing mean developers need a bit more leeway to keep projects viable.
"We've seen new home prices come down across British Columbia," Kahlon said. "That is good news for renters. It's good news for people who are buying their first home, but it's a challenge for those who are building homes, because when those prices come down, a lot of the projects, they don't pencil as well."
The president of the Urban Development Institute spoke in favour of the changes alongside Kahlon, and both the Canadian Home Builders' Association of B.C. and the B.C. Construction Association support the change.
Local governments have the next six months to change their policies to align with this.
