A potential 45 per cent increase to the costs developers must pay the city is sending the wrong message and flies in the face of other Parksville housing policies, says the CEO of the local chamber of commerce.
While any actual increase will be a matter of debate for council in the months ahead, the numbers being floated currently in relation to development cost charges (DCCs) would have a city bill for the construction of a single family home jump to almost $21,000 from its current $14,000.
“This sends a negative message to developers, which is compounded by the fact that the development process in Parksville remains difficult,” Parksville and District Chamber of Commerce CEO Kim Burden said last week. “Developers are just not going to come.”
The last time Parksville raised its DCCs was 2008. In the four years following, the total value of all building permits issued in the city plummeted 58 per cent. It was a bad time for the economy in B.C. and the world, but during the same four years, B.C.’s building permit values dropped 17 per cent in comparison.
If Parksville goes ahead with DCC increases as they have been floated (approximately 45 per cent), the city will enter the top 10 of the most expensive DCCs in the province, according to the most recent data from the provincial government (December, 2011), which compiles and lists the DCCs for more than 100 B.C. communities.
Parksville would move ahead of communities like Kelowna, Harrison Hot Springs, Whistler and North Vancouver.
Parksville Mayor Chris Burger said the city’s increasing infrastructure costs — especially the much-discussed water treatment facility — are forcing the community to look at all ways to increase revenue. He also said any DCC increases are months and much council debate away and a firm number is yet to be established.
“If there’s any issue right now that’s causing me to lose sleep, it’s this one,” said the mayor. “There is a balance we have to strike here. If we end up with a DCC structure that suspends development, we won’t collect any DCCs. There are options for council to consider.”
Burger concedes much of the city’s need for more revenue centres around the water treatment facility. Provincial authorities are demanding the city treat its water, much of which comes from the Englishman River. No new treatment facility means the city might not be licensed to draw water from the river.
“If we don’t build this plant we won’t have a water supply and there won’t be any development,” said Burger.
Chamber boss Burden said drastic increases in the DCCs would be counterproductive in relation to other city policies regarding downtown revitalization and affordable housing. He said a 45 per cent increase in DCCs would “fly in the face” of these other policies.
“There are other ways to find that same revenue,” Burden suggested. “This (proposed) DCC increase is a huge negative message. We are competing with other communities to have this economic input (development).”
Burden also said “sometimes you have to recover costs by increasing volume,” pointing to BC Ferries as an example of how increasing charges doesn’t translate into more revenue.
“They kept on raising their rates and then wondered why their ridership dropped,” he said.
Much of the new-home development in our region has occurred in the regional-district-controlled areas close to, but outside, the boundaries of Parksville and Qualicum Beach. That’s because DCCs there are much less than what is even currently charged in Parksville, said Burden.
“It’s way less than what we pay here, probably half,” he said.
Burger said his city provides much more in services than what the regional district provides.
“I get called all the time from people in the regional district complaining about their level of service,” said Burger, who was asked what kind of services are superior in Parksville to those of the regional district.
“Wait ‘til there’s a snowfall,” said the mayor.
Burden said the chamber is still working on a formal presentation about DCC increases it expects to make to city council in the weeks ahead.