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British Columbia Vancouver proposes fee hikes for developers to reduce permit backlog

Builders wait more than six months to get permits to build single-family houses, duplexes and laneways in Vancouver.

John Lehmann/The Globe and Mail

The building boom in Vancouver is causing such an administrative backlog that the city is proposing to spend an extra $2-million to speed the process, money that will be raised through higher development fees to hire extra staff.

There are more than 2,400 applications in the city hall pipeline, partly due to a huge bump in single-family, duplex and laneway houses. George Fujii, the city's director of development services, says the solution is to hike fees and bring in more staff.

Developers looking to rezone land in Vancouver will be hit especially hard, with fees jumping by 30 per cent – a move that will mean developers of large, new mixed-use projects will pay almost $200,000 more per site.

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Currently, builders wait more than six months to get permits to build single-family houses, duplexes and laneways. There are almost 900 of those applications in the queue.

Developers aren't thrilled with the proposed fee hike, but say they are willing to live with it if it does really mean reducing Vancouver's job-killing waiting times.

"It's discouraging, but we're supportive since they committed to putting those fees into staff," said Jon Stovell, the vice-chair of the region's Urban Development Institute.

He said the waiting times are hard on everyone, but especially small businesses, whose owners are sometimes waiting three months just to get a small tenant-improvement approved.

Bob de Wit, CEO of the Greater Vancouver Home Builders' Association, said the report is good news for single-family-home builders.

"It was taking more than a year for some of the smaller builders to do projects. That means one and a half projects a year instead of two or three. There are jobs there. It affects the economy."

He said the city could do more by making the whole process more predictable and efficient.

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"Then they wouldn't need more resources."

But, he said, people understand there's a jam at the moment in Vancouver and something is needed to unblock it. In late October, the city had issued almost 4,500 building permits, worth about $2-billion in construction.

The association did a study last year of how municipalities rated in their processing times. Langley was at the top, while Richmond was second. Vancouver was in the middle of the pack; the District of North Vancouver had the longest process.

Mr. Fujii's report, going to council Tuesday, says the fee hikes will raise about $1.7-million. Almost a third of that will come from rezonings. There are usually around 40 or 50 a year in Vancouver.

Smaller rezonings will cost around $30,000 more from the current $76,000 or $95,000, depending on whether the buildings proposed are mixed-use or single-use. Rezonings for mixed-use comprehensive-district zones will be increased from $562,000 to $742,000.

Randy Pecarski, the city's assistant planning director, said that although the fee increases look big, they still represent a very small percentage of the total costs for a project. Someone building a six-storey condo on Cambie Street worth $25-million would be looking at $32,000 in additional fees.

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The staff report also documents the fact that the current fees charged for rezonings don't come anywhere near the cost of processing in terms of staff time.

Staff will likely spend about $6.5-million worth of time on rezonings, while the fees only cover a third of that. Other development fees for other types of projects cover about three-quarters of staff time.

The city actually makes money on items such as sewer, electrical, gas and tree-removal permits.

Developers will get to subtract the costs of the higher fees when the city's real estate staff are calculating the amount they have to pay for community-amenity contributions, which will partially offset the increase.

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