The Greater Vancouver Home Builders’ Association (GVHBA) is urging Metro Vancouver officials to rethink implementing a sewage fee increase next year without any phasing period.
Proposed rates for the Fraser area will rise between 214 and 230 per cent and for Vancouver will increase between 82 and 111 per cent, depending on the housing type.
In addition, the industry will see fee increases from various municipalities in the form of Development Cost Levies or Development Cost Charges (DCC) and Community Amenity Contributions, combined with the future TransLink DCC.
Bob de Wit, GVHBA CEO, explained he understands there needs to be increases, but it’s too much, too soon and will hurt homebuyers.
"Our feedback hasn’t been to not do it, but don’t overwhelm our first-time or price-sensitive buyers with a huge one-time hit," de Wit said, noting for a home in Fraser Valley, this could be as much as $5,000. "Instead of applying that in the first year why not spread over three to four years. Phasing is just common sense and I hope that will come back."
De Wit added the new costs are bad news for homebuyers also facing rising mortgage rates and a tightening of rules around mortgage eligibility and housing affordability.
The original staff report from Metro Vancouver proposed a three-year phase-in, which would have provided a fixed cost timeline. But this option was summarily dismissed at the internal staff consultation stage, without receiving input from external stakeholders, including the development industry, claims de Wit.
The GVHBA and Urban Development Institute (UDI) sent a joint letter to the Metro Vancouver board chair outlining their concerns with the sudden fee increase and lamenting a lack of meaningful consultation with industry stakeholders.
"While we fully appreciate the necessity to generate funds to pay for the much-needed increase in wastewater treatment capacity, we are disappointed that the process did not include timely reviews of rates, consideration of the impacts of the magnitude of the increases, and an earlier, more meaningful and effective consultation process," reads the letter. "As such, our members would like the board to reconsider its position on phasing-in these substantial increases – and institute the phasing approach that was originally proposed by staff."
De Wit explained working with Metro Vancouver, who aren’t elected officials, is different than working with a municipality.
"They seem less inhibited by bureaucracy and less encumbered by rules and regulations," said de Wit, noting the last time sewage fees were changed was in 1993.
"What they are doing is necessary. We just have to make sure it is done in the right time to not disrupt people in the market. It’s all about transparency and predictability. If we can get the local government to work with regional officials, and all be transparent, I think we can produce a more predictable and reliable supply of new housing."
The Metro Vancouver Regional District is expected to make its decision later this month.