Developers are praising the Metro Vancouver Regional District’s decision to reduce development-cost charges, The Globe and Mail reported.

The organization serves as an umbrella organization for the region’s municipal governments and is responsible for approving significant projects. During an April special meeting, Metro Vancouver decided to roll back development charges to 2025 levels.

The move could help stalled commercial real estate projects get built, developers told the Globe. Developers have sought the the cuts for many years; counterparts across the country have done likewise with their local governments.

The Vancouver’s region’s development-cost charges had increased sharply in 2025 and 2026, with another hike planned for 2027, the Globe reported.

“It’s a meaningful step,” Brad Jones, chief development officer at Wesgroup Properties, told the Globe. “There’s a group of projects that were maybe on the cusp of going – in this market, they’re likely rental projects – and they can take advantage of this two-year window and move, but I think it’s going to be limited how many projects can react and respond with how subdued the [condominium] presale market is and rents declining steadily.”

Rob Blackwell, executive vice-president of development at Anthem Properties told the Globe that the rollback could save between $2 million and $2.5 million on a typical 30-storey high-rise project, enough to improve project viability.

“I think the bigger thing is that Metro Vancouver is understanding what we’ve been saying for two and a half years – that there’s structural issues in the market and you can’t keep increasing the fees, because it’s going to stop projects,” Blackwell told his interviewer. “But we saw this coming three years ago. We just couldn’t get anyone to believe us, and I think the indication now is that people believe.”

Both developers expressed concern about Metro Vancouver’s longer-term plan to reduce the “assist factor” for development-cost charges to 1% beginning in 2029, meaning 99% of growth-related infrastructure costs would be funded through development fees.

“Things in the market would have to change significantly for that to be viable in 2029, otherwise we’re just pushing that problem down the road,” Blackwell told the Globe. “The cost burden going into new housing is too high. DCCs are important, we all need the infrastructure, but if the price for them is too high, we end up taxing homes out of reach. That’s the problem. Every dollar of a DCC shows up in the price of a home.”

Jones described the 2029 issue as “of fairly high concern” and said governments across Canada need to rethink how infrastructure is funded. Blackwell suggested to the Globe that municipalities consider tools such as public-private partnerships, longer amortization periods and infrastructure bonds.

The developers also pointed to building-code changes as another major contributor to rising housing costs. Jones told his interviewer that non-safety-related code changes have made construction “incredibly difficult and incredibly expensive,” estimating there have been more than 2,000 individual building code changes over the past decade.

Blackwell told the Globe that evolving requirements related to insulation, sustainability, accessibility and seismic standards have increased building sizes, reduced usable space and extended construction timelines, leading to higher financing costs.

According to Jones, the slowdown in new housing starts is beginning to affect suppliers and related industries across the region.

“I think that will slowly become the story of the year – the economic impacts and job losses that are related to this sector,” he told the Globe.

Pictured: Downtown Vancouver

Photo: Courtesy of Newmark