Three funding tools are available for municipalities to help pay for infrastructure required to accommodate population and business growth. The first is the Development Cost Charge, which the province highly restricts what local governments can use it for but is applied to any redevelopment project. The City recently increased this fee. You can read a previous post about this.
There is also the Community Amenity Contributions fee, which is unrestricted but can only be applied during rezoning. The province recently enabled the best of both worlds: the Amenity Cost Charge. The City is working on creating an Amenity Cost Charge bylaw, which would eventually replace the Community Amenity Contributions fee. In the meantime, Langley City Council approved increasing our Community Amenity Contribution fee schedule as follows:
Current Rate
0.0-2.5 FAR: $4,000 per unit
2.5-3.0 FAR: $5,000 per unit
3.0-3.5 FAR: $6,000 per unit
Effective January 1, 2025
0.0-2.5 FAR: $6,000 per unit
2.5-3.0 FAR: $7,000 per unit
3.0-3.5 FAR: $8,000 per unit
3.5-4.0 FAR: $9,000 per unit
4.0-4.5 FAR: $10,000 per unit
4.5-5.0 FAR: $11,000 per unit
5.0-5.5 FAR: $12,000 per unit
Effective January 1, 2026
0.0-2.5 FAR: $8,000 per unit
2.5-3.0 FAR: $9,000 per unit
3.0-3.5 FAR: $10,000 per unit
3.5-4.0 FAR: $11,000 per unit
4.0-4.5 FAR: $12,000 per unit
4.5-5.0 FAR: $13,000 per unit
5.0-5.5 FAR: $14,000 per unit
A few things to note are that the City sets these fees to capture a portion of the profit from a development project to reinvest into the community. If the fee is set too low, you don't maximize the value for the community. If it is too high, you may stop a project from being built or end up with the cost being passed onto the buyer. Langley City worked with a land economist to set our rates. Our fees are lower than those of our two neighbouring municipalities.
A FAR is a density measure; the following is a rough idea of FAR to building type.
0-2.5 FAR: Detached House, Townhouse, Low-Rise Apartment
2.5-4.5 FAR: Mid-Rise Apartment, Mixed-Use Building
4.5+ FAR: Mid-Rise to High-Right Building
4 comments:
"City sets these fees to capture a portion of the profit from a development project"
This isn't correct. And you should know better.
You're capturing land value, not developer profit with these fees. All you do with higher fees is make more projects not feasible.
I agree
Not to split hairs, but we are capturing land lift, which is profit. We aim to get around 50%-75% of the land lift depending on whether the previous building has purpose-built rental units. Here is a good explainer: https://househuntvictoria.ca/2023/11/27/land-lift/
Capturing land value and developer profit is different.
Yes, sometimes the developer already owns the land, so when a new fee is instituted the decreased land value decreases potential profit.
But in the vast majority of cases where a developer doesn't already own the land, these fees just decrease the amount a developer will pay. They don't adjust profit target profit margin just because a municipality introduced a new fee.
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