Development Cost Charges
Development Cost Charges (DCCs) are used by local governments as a means of utilizing the user pay principle. Those who benefit from the infrastructure must pay for using the system.
DCCs are monies that municipalities and regional districts collect from land developers to offset that portion of the costs related to these services that are incurred as a direct result of any new development. The demand created does not always relate to works that are located adjacent to the property being developed. For example, new development may require a local government to increase the size of its water storage reservoir. Developers pay DCCs instead of the existing taxpayers who are not creating the new demand and are not benefiting from the new infrastructure.
Using DCCs, local governments can apply a common set of rules and charges to all development within a community.
To determine the amount to charge for DCCs, information obtained from the Official Community Plans, community plans and land use plans is used to determine the amount of expected growth and the areas where that growth is expected. The infrastructure needed to support the anticipated growth can then be determined and cost estimates made. The cost of these works is divided by the projected growth within the whole municipality to determine the amount of a DCC in accordance with the Development Cost Charges Bylaw.
Because each local government has different growth projections and different infrastructure needs, every local government has different DCC rates although the same methodology is used by all to arrive at those rates. Development cost charges imposed under the Development Cost Charge Bylaw may be reduced in accordance with the Development Cost Charges Reduction Bylaw. Developers of multi-family residential property may qualify for a 50% reduction in DCCs if they achieve the desired density levels, and if they meet the criteria set out in the City’s sustainability checklist, they can qualify for a further 25% rate reduction.