The B.C. government has introduced changes to development cost charges (DCC) that are giving builders a much-needed break. With rising material and labor costs and fewer housing projects in the works, these adjustments are expected to help reduce the financial strain developers are facing.
What’s Changing?
Starting in 2026, developers won’t have to pay the full fees upfront. Instead, they will only need to cover 25% of the development cost charges to municipalities at the beginning. The remaining 75% can be deferred for up to four years or until the building is occupied.
These fees help cover the costs of infrastructure like community centers, roads, and parks, so this delay in payment could give developers more flexibility and help ease the financial burden.
Additionally, developers can now use bonds as financial guarantees instead of irrevocable letters of credit. This shift will allow builders to preserve their working capital throughout the construction process, making it easier to fund multiple projects at once.
Why This Is Good News for Builders
Wendy McNeil, the CEO of the Homebuilders Association Vancouver, is excited about the changes, calling them a step in the right direction. With fewer financial hurdles upfront, builders can better plan their projects and avoid having large amounts of capital tied up in one single development. McNeil believes this will make it easier for builders to invest in future projects and create more housing options for B.C. residents.
A Drop in Housing Starts
B.C.’s housing market has been experiencing a slowdown. According to a June report by the Canada Mortgage and Housing Corporation, housing starts dropped significantly from 53,118 units in April to 37,455 units in May – nearly a 30% decrease. This decline is part of a larger trend, with over 4,000 fewer housing starts compared to last year.
What the Government is Doing
Housing Minister Ravi Kahlon highlighted that the provincial government has already taken steps to bring down housing costs. These efforts include restricting short-term rentals, investing in affordable housing, and making it easier to build near transit stations and in single-family neighborhoods. However, more work is needed, and the new changes to DCCs are part of that ongoing effort to support developers and get more homes built.
Surrey Mayor Brenda Locke and Delta Mayor George Harvie also spoke about the challenges developers face with high upfront costs. They emphasized how these new changes should help ease the pressure and encourage more construction.
What’s Next?
While these adjustments to DCCs are a positive development, there are still other issues affecting the housing market. Chris Gardner, president of the Canadian Federation of Independent Business, suggested that further efforts are needed to address the broader cost issues in housing construction. Lowering taxes and fees, particularly those related to infrastructure, would go a long way in making housing more affordable.
Final Thoughts
These changes are a step toward making housing more affordable in B.C. and encouraging new development. However, there’s still more work to do. If you’re planning on buying or selling a home in Abbotsford or want to better understand how these new changes might affect your real estate decisions, feel free to reach out. We’re here to help you navigate the latest mortgage rules and make the best choices for your financial goals. Contact us today.