Port Moody development fees on the rise

Reported by Patrick Penner

Future Port Moody real-estate projects will see their profit margins tighten after city council voted to dramatically increase development fees to cope with expected growth.

The fees, known as development cost charges, will more than double the charges for most types of real-estate developments in order to pay for a $43-million infrastructure upgrade over the next decade. But the change is raising concerns.

Coun. Zoë Royer questioned whether the jump from very low to very high rates would discourage further building contracts.

“If a plane leaves late for any reason, you would not want it to go from 1,000 miles an hour to 20,000 miles an hour just to make up for lost time,” Royer said. “I think [the increase] could be quite onerous to some of these landowners.”

Anti-development platform

The fee increase will likely be looked upon negatively by many in the development industry, who see the new mayor and council as having an anti-development platform.

Greg Howren, the development co-ordinator at Ledingham McAllister, said he already views the municipal government in this way.

“They’re so anti-development right now, it doesn’t really matter,” he said.  “You only get [DCC money] if you have development made.”

But Port Moody’s development charges have not been increased since 1987 and are a fraction of what neighbouring municipalities collect.

The city staff’s report and recommendation, delivered to council on March 8, began in 2016, under the previous administration that was seen as more development-friendly.

Report and recommendation

The report called the current fee requirements “irrelevant and outdated” due to the rise in land and construction prices.

Port Moody’s previous DCC for an apartment unit was slightly under $4,000 while the neighbouring municipality of Coquitlam charges over $11,000.  The new rates would increase the apartment unit fees above the $12,000 mark for developers.

Jeff Moi, the general manager of engineering and operations for the city, said the increase in fees is out of necessity in anticipation for several massive developments.

“The purpose of the DCC bylaw is not to have any impact on what kind of development actually happens or is approved.  The purpose is to set the fees so we can collect funding to fund [those] growth-related projects in the future,” he said.

The redevelopment of the Flavelle sawmill site in Port Moody into an oceanfront apartment complex is expected to increase the population of the city by 20 per cent.

Coun. Hunter Madsen said he thinks the new numbers are conservative.

“The five-times-larger [Coquitlam], right next to us, is upgrading their charges even further in light of the realities of the cost of land,” he said.

Coun. Meghan Lahti, who has been on council since 1996, said the reason why the city didn’t update and increase fees before is because only the Heritage Mountain and Inlet Centre areas were being developed.

Lahti said these two areas had updated DCCs unlike the rest of the city.

“We didn’t leave it for 30 years for the whole city. [Other] areas just weren’t being developed, so we didn’t change it,” Lahti said.

However, these zones of the city are still going to have their fees raised significantly with the new DCCs.  The residential and commercial unit fees in Newport Village will more than double.

Nathaniel Stuart, project co-ordinator at Icon West Construction Corporation, said that developers have been making good money in Port Moody because of the low costs.

He said changes in DCCs might stop companies in the midst of the rezoning process.

“People who are in the middle of the rezoning process might actually pull out because those newly added DCCs might put their top margin or final margin below 20 per cent,” Stuart said.