Several comments from readers have raised important issues and we would like to add a little more background information. DCCs were not introduced in Cranbrook until 1996 although they were brought in by the province in the 1970s. It has been said by some that there was no development in Cranbrook between 1996 and 1999 because the DCCs were too high. The DCCs were set for a single family residential lot somewhere between $4,000 and $5,000 we believe. It may not be fair to blame the cost of DCCs alone on a slump in development because many factors may have been at play and it would be necessary to look at development in other neighbouring communities also. The very fact that DCCs had never been charged before in Cranbrook may well have come as a deterrent no matter the cost. However the fact remains, compared to other communities our DCCs have been extraordinarily low and our infrastructure has lagged behind in nearly every utility. DCCs were lowered to encourage development but appropriate DCCs would have contributed to the upgrades that were necessary as that development came on line. Instead upgrades were not made and things deteriorated.
Times were good and DCCs were a deal but now times we do realise are much tougher. However, to keep DCCs artificially low will not solve Cranbrook's problems but will only help to compound them. There is a cost to quality and Cranbrook has a lot of catching up to do. A run down city is not attractive to many businesses, families or tourists and long term economic devlopment must be a priority.
The amount of assistance which municiplaities provide to the DCC rates is another decision which must be made by Council. This assistance or subsidy which is paid as a percentage of the DCC amount is paid for by taxpayer in our City Taxes.
Some compromise and creative thinking will have to come into play for this decision which will impact all Cranbrook's residents and Cranbrook's future.
From the Growth Management Management Study:
The Municipality of Sooke has a powerpoint presentation which might be of interest to some especially the tables on sides 16 and 17 displaying DCC rates in various communities on the Vancouver Island.
and another interesting document:
Good summary of DCCs by Urban Systems. Keep in mind that DCCs at $5,000 in Victoria & Saanich apply to lots with market prices of $400,000 while Cranbrook market price averages less than $100,000 per residential lot. Even Fernie & Invermere have had double the market prices of Cranbrook. Eventually it comes down to whatever the market will bear without stifling growth.
ReplyDeleteGood luck to Council and staff in finding an equitable solution.
DCC's have nothing to do with lot prices, and everything to do with the cost of proposed infrastructure required to accommodate growth. Presently, Cranbrook is facing $230M worth of infrastructure upgrades, which translates to approximately $11,500 per residential lot. If 'development pays for development' then Council will need to struggle with how that will look, while at the same time encouraging development that will be more economically beneficial in the long run. Good luck, indeed! We'll be following this one closely.
DeleteI disagree, DCCs will have a direct impact on lot prices and affordability. If you add $11,000 in cost to a residential lot, it will be passed on to the end user. If the market cannot bear it, there will be no development.
ReplyDeleteI also question the formulas for calculating $230M worth of upgrades. Wouldnt infrastructure upgrades in the city benefit all residents...then why should development shoulder the entire cost?
Can you please provide us with your suggestions for the proposed rates on commercial and industrial lands. Quoting just the residential rates does not provide the full spectrum and impact to the public. Can you also provide me with this answer: which sector in the past decade contributed the most DCC revenue? I already know the answer...I just want to see if your organization does
We may not have to worry about growth if these rates get passed at what you suggest. I think once you provide the information to the public on industrial and commercial rates it may cause the public to want a better balance. A balance that strives to invest in our infrastructure while also providing economic growth and jobs for our families.
Further, I do also believe that the infrastructure upgrades you identify do not consider federal or provincial grants or transfers. Might I ask how much the Cranbrook taxpayer contributed to the 30+ million dollar upgrade of our waste water treatment? The federal and provincial dollars were the largest source of funding for this upgrade...or am I wrong
It seems that your organization continually marginalizes the contributions to an economy by development and jobs created by the construction sector of both commercial and residential A lot of young families would like to see opportunity in Cranbrook. The City of Cranbrook made a mistake in the mid 1990's when they had the formula wrong...we should learn from that mistake and not do it again.
Many of us agree that the current residential rate is too low and has not kept up with the rate of inflation, but to increase it almost 6 fold and the same for the commercial and industrial rates would drive investment to other markets. The City council needs to find that right balance.
“I disagree, DCCs will have a direct impact on lot prices and affordability. If you add $11,000 in cost to a residential lot, it will be passed on to the end user. If the market cannot bear it, there will be no development.” Who determines the price of a lot? or a house? Probably, as we have seen, whatever the market will bear. In the case of DCC’s it has been the taxpayers picking up approximately $9,000 for delivery of services to a residential lot. The other $2,000 by the developer. Yet, the former Mayor and many Councillors were adamant that development pays for development. It is our hope that this Council will find the balance that you refer to.
Delete“I also question the formulas for calculating $230M worth of upgrades.” The formula is in the Growth Management Study, and I wish you all the best in understanding it. The City staff probably do, as they have worked with these formulas, whereas we haven’t.
Thankfully, the federal and provincial grants have helped us out with the wastewater system, as you pointed out. However, those funds are taxpayers dollars as well. We can be grateful that Cranbrook taxpayers alone did not have to completely shoulder that burden.
“It seems that your organization continually marginalizes the contributions to an economy by development and jobs created by the construction sector of both commercial and residential.” We disagree with your statement. Our vision statement is: Citizens for a Livable Cranbrook provides grassroots leadership and an inclusive process, with a voice for all community members, to ensure that our community grows and develops in a way that incorporates an environmental ethic, offers a range of housing and transportation choices, encourages a vibrant social and cultural life, and supports sustainable, meaningful employment and business opportunities. When speculative land development starts to create a burden on the taxpayer with vacant homes that soon go into tax arrears (as per the one page list of homes in the Townsman newspaper this fall) many from a large development, then we don't view that as sustainable. We want development that keeps people here long term, not for three to six months, when they have to move out of town to the next job. In our opinion, growth does not equate to sprawl, which cities globally are discovering, is not sustainable. What about the number of contractors, trades people, and suppliers that are often left with unpaid wages or bills, due to some of the developments - is that economically sustainable? Cranbrook is not alone in this, but the mandate of the blog is to raise the issues - good, bad, or indifferent.
“Many of us agree that the current residential rate is too low and has not kept up with the rate of inflation, but to increase it almost 6 fold and the same for the commercial and industrial rates would drive investment to other markets. The City council needs to find that right balance.” We agree with you, and wish Council all the best.
Anonymous - the chart for the draft industrial and commercial DCC's is shown as part of the article.
ReplyDeleteThe City has been giving the developers a 51% assist on DCCs which means the taxpayer sector of Cranbrook has been paying the largest portion of the DCCs necessary for development.