Development Cost Charges (DCCs)
and Development Cost Levies (DCLs)
Development Cost Charges (DCCs) and Development
Cost Levies (DCLs) can be set at both the local and regional
level. These fees are levied on new developments
to fund infrastructure-related expenses that support
growth, such as water and sewer services or parks.
It is understood that growth needs to pay for growth,
however, increasing DCC and DCL rates with
inadequate notice and the layering of both local and
regional charges adds to project costs, which become
a component of the purchase price or monthly rent.
When the budgeting stage of the development process is
complete, the project viability is based-on what policies
are in place at the time. While DCCs are intended to
undergo a comprehensive review at least every five years
and can be indexed to inflation, there are a number of
municipalities that do not follow these best practices.
DCCs can increase intermittently and without a fixed
schedule. DCC and DCL changes with inadequate
notice can result in builders paying higher fees
after purchase commitments have been made and
significant redevelopment costs have been incurred.
This can impact whether the project can be built at all.
The Provincial DCC and DCL framework allows
for some in-stream protections to guard against
this challenge. Outlined in Sections 568 and 511
of the Local Government Act (LGA), a “pre-curser
application” must be in-stream, meaning a building
permit, development permit, rezoning or subdivision
application. This would satisfy the first stage of an “in-
stream” application, and the second stage would be
met if a building permit is issued within 12 months of
the adoption of the increased rates.3 These protections
set by provincial legislation were introduced over 10
years ago. Since then, the municipal approval process
has increased in complexity and staffing shortages
within municipalities have put strain on the ability to
process applications.
In the 2022 Municipal Supply and Benchmarking Study
released by the Canadian Home Builders’ Association
of B.C. (CHBA BC), it is identified that the average
municipal approval timelines in B.C. are 14.2 months for
a rezoning approval, and 13.6 months for a development
permit. In the project budgets analysed, a building
permit can take anywhere between 6-12 months for
approval. In municipalities facing staffing shortages,
permits can take even longer. The CHBA BC’s report
states that, “Shorter timelines can help improve the
responsiveness of housing supply to demand.” 4
Shorter approval timelines would provide greater
certainty that projects could qualify for in-stream
protections if DCC or DCL rate changes occurred
during the approval process. This would avoid the
builder paying higher fees than they had previously
budgeted for. In addition, phasing-in substantial DCC
or DCL increases over a multi-year period would
mitigate the budgetary impact for projects that are
in-stream but unable to receive their building permit
within the first year after the new rates are approved.
In-stream cost increases are a risk when combined
with the overall burden of taxes and fees, and make
it more challenging to develop new housing.
Developers are often required to deliver cash or in-kind
contributions for infrastructure. In Metro Vancouver,
a housing project will pay DCCs to fund infrastructure
Taxing Growth
Regional DCC Infrastructure Categories
Transportation
Water
Sewer
Municipal DCC Infrastructure Categories
Road
Sewer
Water
Drainage
Parkland Acquisition and Improvements
City of Vancouver DCL Infrastructure Categories
Road
Sewer
Water
Drainage
Parkland Acquisition and Improvements
Child Care Facilities
Replacement Housing (Social/Non-Profit Housing)
Breaking Down the Taxes & Fees