Letter from Victoria Residential Builders Association (Casey Edge)

Re: Community Amenity Contribution (CAC) Policy Proposal

The Victoria Residential Builders Association does not support a community amenity contribution and land lift policy, which only adds to housing costs in one of the most expensive markets in North America.

The draft policy says: “New development should provide a fair contribution to help address the needs of a changing community and some of the impacts of growth.”

New development already provides fair contribution to the community through:

1. Development Cost Charges (which include allocations for parks, plus municipalities often request green space/park donations which is double-dipping)
2. Revitalization of housing and neighbourhoods, including healthier, more energy efficient homes
3. More taxpayers in perpetuity for the municipality

The cost of any product is paid by the end-user, so community amenity contributions end up on the mortgages of new homebuyers when they should be paid by all property taxpayers. The federal and provincial governments collect billions of dollars annually from the Property Transfer Tax & GST. New housing is already providing more than a “fair contribution.”

In addition, the Town of View Royal is receiving significantly more revenue from home building annually according to the town’s policy of building permit fees charged on “value of construction.” As per Bylaw 786, Schedule B, this includes:

i. materials and equipment of whatever nature incorporated into the Building or Structure; ii. labour, including labour of the owner; iii. fees involved in design, investigations, testing, consulting construction, labour and management, contractors’ and subcontractors’ profit and overhead, social services tax, goods and services tax and insurance; iv. materials and equipment rented for carrying out the Construction and; v. mechanical, electrical, elevator, plumbing, drainage, heating, air conditioning and gas installation

As the cost of labour and materials increase, including tariffs on rebar, lumber due to wildfires, and regulations such as Step Code, municipalities generate more revenue regardless of the municipal cost of actually providing inspections.

The “value of construction” model is similar to a tax, like the province’s Property Transfer Tax. Building permits should be a fee for service based on the costs of providing plan reviews and inspections.

We are strongly opposed to the 50% land lift, similar to the City of Victoria’s policy, which is discouraging development and housing supply. Development involves significant risk, evidenced by historical crashes in the housing market such as 2008/09. Government should not be involved in the business of development such as land lifts without accepting the risk and participating in losses, common in the industry.

It has come to our attention, the Town of View Royal is also considering the BC Energy Step Code, which has been revealed by Natural Resources Canada to have faulty metrics. For example, a Step 2 home in View Royal costs more to build than a Step 3 home in Nanaimo. The BC Building and Safety Standards Branch announced on June 28, 2019 they are considering changes to their Step Code energy targets. If the province has it wrong, then the municipalities adopting Step Code also have it wrong and have a responsibility to their residents. The Municipal Insurance Association says “Building bylaws are one of local governments’ greatest exposures to liability risks.” The City of Delta discovered this when ordered by a judge to pay $3 million in a leaky condo lawsuit in 2001.

The National Building Code is establishing different criteria for their new energy efficiency code, including a prescriptive option to prevent bottlenecks, which is not available in the BC Step Code. The City of Langford has made the wise choice to disregard the Step Code, support the Built Green program and await completion of National Building Code diligence presently underway. In addition to energy efficiency, Built Green includes water conservation and recycling not available in the Step Code. There are many other challenges with the Step Code ranging from cost estimates that are not credible, to a lack of education and certification.

All of the aforementioned costs erode affordability, including the federal mortgage stress test, which has reduced homebuyers’ purchasing power by 20%. Housing affordability is the main issue in our region, and municipalities adding more costs only drive up prices for young families least able to afford a home.

Thank you for consideration of our concerns and feel free to contact me for any additional information.

Yours sincerely,

Casey Edge Executive Director