Soaring development cost charges not expected to slow demand for land in fast-growing suburbs

BY SUSAN M. BOYCE

The development community is bracing for escalating costs in both the Township of Langley and City of Langley. Particularly troubling to many is the city's proposed development cost charge (DCC) increases, which head to final reading this summer and, if approved, will put upward pressure on the bottom line across all sectors.

The proposed bylaw would see the city's residential DCCs more than double. The new charges would amount to $22,164 on a new house, compared with the current $9,078, and the DCC per strata unit - the most popular form of housing - would rise to $17,678 for townhomes and $11,661 for every new condo.

The industrial DCCs will hit a whopping $4,053 per 100 square metres compared with $1,932 in the township and $1,759 in the neighbouring municipality of Surrey.

Peter Simpson, president and CEO of the Greater Vancouver Home Builders' Association, voiced his concern in a letter to Mayor Peter Fassbender.

"Since Langley City is a much denser, compact area than Surrey or Langley Township, it is puzzling why Langley City would require a hefty infrastructure increase," Simpson noted. "Furthermore, we do not understand how construction costs to provide infrastructure of single-family homes have risen 244 per cent since 2004."

Fassbender defends the DCC increases as overdue, noting they were last set in 2004. He adds the city has developed a reputation for its ability to fast-track building permits - in one case a development permit was received on Wednesday and approved in just five days on the following Monday. While he says a 90-day turnaround is more typical, Fassbender believes finding ways to speed the application process represents a "significant, ongoing benefit" to the development industry.

Bob Dominick, vice-president, sales and marketing, at Weststone Group, the company currently developing the $17 million final phase of condominiums at Serenade, acknowledged any increase in DCCs is "a sad fact." However he's also quick to praise the city for its strong leadership and vision.

"This community is clearly open for business," he said, adding he hopes plans will continue moving forward to allow live/work units. Zoning is already in place to increase allowable units per acre from 100 to 150 in the downtown core - meaning the City of Langley is open to densification.

Township

By comparison, the township's 2010 DCC increase of just over 20 per cent seems minimal, but Hugh Carter, general manager of land development with Qualico and co-chair of the Urban Development Institute's (UDI) Langley liaison committee, notes other incremental costs are also on the rise - and many of these creeping costs are less immediately visible. He cites examples including the $78,000-per-acre amenities fee on developments in the now emerging Yorkson neighbourhood, the 5 per cent land acquisition policy and a requirement to provide child-friendly amenity areas of four square metres per unit for apartment buildings and eight square metres per unit for townhouse projects.

In a presentation to council, the UDI also expressed concerns that the township's proposed changes to its subdivision and control bylaw will further increase costs - and has examples to support this concern.

According to the UDI, in some areas developers are required to provide both a road bike lane and greenway bike trails - even though the two may only be a few metres apart - thus reducing development area and adding as much as $9,000 per lot. Right of way for pipes is being widened from three metres to 4.5 metres not only potentially adding another $9,000 per lot when required but also reducing the number of lots per acre and increasing pavement requirements.

The extra costs, however, do nothing to dampen Carter's enthusiasm about Qualico's upcoming Willoughby Town Centre project on a 20-acre land parcel in Yorkson. Anticipated to break ground this fall, the initial phase will be a $58 million, 148,000-square-foot office/retail project anticipated to be comprised of an office building plus a family-style village shopping centre anchored by a 27,000-square-foot Loblaw grocery store. Later phases will include up to 350 condominium homes plus an additional 750 multi-family residences.

To the east at Glover Road and the Langley Bypass, office strata sales are already underway at Collection Square.

A collaboration between Anthem Properties and the Open Road Auto Group, this 15.6-acre site will ultimately house the region's newest BMW/MINI dealership (expected to open its doors later this summer) plus up to four other high-end dealerships. In addition to 40,000 square feet of office space, Collection Square will provide three retail/commercial buildings totalling approximately 30,000 square feet. Stuart Kerr, Anthem Properties' director of development, noted there is a pent up demand for this type of product since most recent construction has been designed following the business park model. Purchase prices of the commercial strata units range between $400 and $440 per square foot.

Transit link

Now under construction, the 800-stall Park & Ride at 202 Street and Highway 1 is a partnership between the Province of British Columbia, the Government of Canada (through the Infrastructure Stimulus Fund) and TransLink. It will be the terminus of the first regular public transit connection over the Port Mann Bridge in more than two decades. RapidBus service will run every 10 to 15 minutes during peak periods and connect commuters to the Lougheed SkyTrain Station in less than 25 minutes. Estimates suggest that by 2031 over 20,000 people will use the service.

With the Willoughby/Willowbrook neighbourhood predicted to reach a population of more than 75,000 residents, it's no surprise the 260,483-square-foot, $55 million Langley Events Centre (LEC) has become a sports and recreation destination facility. The B.C. government, the Township of Langley and private investors each contributed $15 million while the balance was financed by other private sources including $1 million from the Langley Gymnastics Foundation.

And for naysayers who suggest the construction/housing industry might be over-estimating its importance as an economic driver in the Langleys, heavyweight developer ParkLane Homes discovered some interesting statistics in its recent employment impact study on Waterfront at Bedford Landing.

This 78-unit apartment is part of the company's 78-acre master-planned community on the riverside in Fort Langley. In total, 1,500 full-time jobs were the result of this one phase alone - first-tier jobs for consultants suppliers and trades. Additional spinoffs in secondary employment was not included.

Looking to the future, Milt Kruger, president of the Greater Langley Chamber of Commerce, believes the Langley sister cities have a great future - but it's a future that needs to be nurtured. Among the many incentives the chamber is undertaking toward this end, Kruger said mobile business licensing is one of the most exciting.

Based on a successful 2008 pilot program in the Okanagan-Similkameen, this program would allow contractors and tradespeople to buy a business licence in their municipal home base plus an add-on mobile licence legalizing them to work in both the City and Township of Langley as well as Abbotsford, Mission, Chilliwack and Maple Ridge. In the first year of operation in the Okanagan-Similkameen, he noted the region saw an increase of $200,000 in licensing revenue.

"Not only does this dramatically reduce bureaucratic red tape for the contractor, thus encouraging compliance, but the consumer now has more choice," he said. "Truly a win-win-win solution."

from Western Investor, March 2011