Province wakes up to effect of developers’ fees on house prices

Province wakes up to effect of developers’ fees on house prices


From the Vancouver Sun, quoting in part:

They are saying, in effect, gone are the days when a city could have a developer pay to build the next pet project that is on the city’s list of “wish we could have” cultural or recreation facilities.

The central theme in the guide repeatedly reminds local governments to consider who ultimately pays for these additional costs in the form of CACs and how they affect housing supply and housing prices. In fact, there is a three-and-a-half-page simple textbook-like lesson in the guide on urban land economics, a case study in the appendix and a whole section of the concluding summary dedicated to educating local governments on the fundamentals of supply and demand.

I’ve never seen any similar lesson produced by the Union of B.C. Municipalities, but I have seen more than a few consultants’ reports drafted by planners who dismiss the simple realities of supply and demand. These consultants have long argued that when a developer agrees to provide a CAC, the cost is borne by the developer or they deduct it from what they would have paid for the development land.

The province’s guide points out that “real estate market economists and historical evidence indicates that this in unlikely.” Ironically, the consultants’ reports municipalities have relied upon are from planners and not real estate market economists.

This guide appears to be a gentle nudge in advance of a leash being put on municipalities if they fail to follow the advice offered in it.

I suspect that leash could ultimately feel much like a choke chain if local politicians and their officials don’t wake up and admit that there is a connection between their actions and the price of housing.

The guide can be found at



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