A new fee implemented by the City of Kelowna to create new parks is drawing the ire of developers and the local business community.
The new development cost charge (DCC) will see an additional $7,180 fee on every new residential condo or home, regardless of size.
The Kelowna Chamber of Commerce, Urban Development Institute and the Canadian Home Builders’ Association of the Central Okanagan all came out against the increase over the last three months while the city was developing the plan. All three groups issued a joint news release but only the chamber was present at a news conference on Tuesday morning.
While parks are beneficial to the city, the issue of housing affordability in Kelowna still needs to be addressed, according to the chamber of commerce.
“You’d be hardpressed to find someone in the business community that doesn’t think park development — or investing in park development — makes a whole lot of sense,” said Nikki Csek, president of the Kelowna Chamber.
“The challenge that we have is specific to the funding strategy that is being implemented by city council. It’s at a time when the stated objective is to focus on housing attainability and we don’t think that this added cost will help with housing affordability.”
She also cited a study entitled Straddling the Gap published by Generation Squeeze in 2019, which highlights the already unaffordable situation many young people find themselves in. The study showed that last year a millennial family had to increase its income by $16,930 to comfortably afford a new home in Kelowna.
“By endorsing this DCC increase, council has ensured that millennial income must grow even more in 2020,” said Csek.
City staff said these costs would not be entirely passed on to homebuyers, but Dan Rogers, executive director of Kelowna Chamber of Commerce, said that likely wouldn’t be the case.
“When you add cost at one end, there’s a payer at the other,” he said.
“This will see an increase in new home prices in the future.”
Developer and chamber director Ray Wynsouw is currently involved with two proposed housing projects but with additional costs imposed by the fee, they may not come to fruition.
“It creates (fewer) jobs and a downfall in our industry even further.”
He also said despite the fee adding a one per cent increase on a $700,000 home; it’s a 100 per cent increase on currently implemented DCCs.
“It’ll add another $36 to your monthly payments. With the stress being so tight for these young families to get into homes, that $36 could knock out we don’t know how many people.”
Only two councillors voted against introducing the new parks DCC, Coun. Brad Sieben and Coun. Mohini Singh, who said she was torn on the issue.
City staff are now preparing the bylaw to send it to Victoria for approval and hope to have it in place in time to be implemented in January.