District of Oak Bay

Development Cost Charges (DCCs) and Community Amenity Charges (CACs)

Presentation to Council July 9, 2018

Dan Huang, MCIP, RPP Senior Planner / Principal Overview of Discussion . Policy rationale from OCP . What are DCCs / CACs? What’s the difference? . What are eligible DCC / CAC projects? . What is the process to calculate DCCs / CACs? . DCC / CAC considerations for Oak Bay . Potential next steps . Discussion / Questions

2 Growth Management in the OCP . 2014 OCP identified potential growth at 0.5% . ~36 units per year . 360 units in 10 years . 720 units in 20 years . Broad policies to support: . Infill development . Areas already developed . Mixed use development in villages and other commercial areas

3 Development Finance Policies in OCP

. US3 – Prepare a Development Cost Charge Bylaw for utilities, roads and parks

. CF8 – Prepare a community amenities policy to guide community amenity contributions to permit and enable density bonus and/or density transfer.

4 What are DCCs? . Fees to help communities recover the costs of off-site infrastructure needed to support growth . Regulated by the province, with approval by the Inspector of Municipalities . Based on “benefiter pay” principle – transparent and equitable . Approved by Council as a DCC Bylaw (with Ministry approval)

5 What are CACs? . Voluntary contributions that are provided at the initiative of the developer that emerge from rezoning negotiations . General authority derived from the LGA, Community Charter . Based on Council’s discretionary authority whether or not to approve a rezoning request . Conditions / contributions cannot be imposed by local government . Ideally approved by Council as CAC policy

6 Who pays DCCs? . Applicants for: . subdivision approval to create single family development sites . building permits to construct multi-family, commercial, industrial and institutional development

7 Who pays CACs? . Applicants for: . rezoning approval to create any additional density

8 What works do DCCs pay for? . Capital upgrades to: . Roads (including active transportation) . Water . Sanitary sewer, and . Storm sewer . Park land acquisition . Park development (limited)

9 What items do DCCs not pay for? . Operations and maintenance . New or upgraded works needed solely to service the existing population (e.g. old 6” pipe to new 6” pipe) . New libraries, fire halls, police stations . Parks & recreation buildings, parking, sports field lighting, artificial turf, tennis courts, skate parks and spray parks

10 What items could CACs pay for? . CF7 – Consider the following as potential community amenity contributions: . Rental, market or non-market affordable housing (subject to a Housing Agreement under S.905 of the Local Government Act) . Housing suitable for seniors and/ or those with physical or developmental disabilities . Dedication of land or building space for a community institutional use such as a day care, community meeting space, arts or culture space, health service, community garden, or transit shelter

11 What items could CACs pay for? . CF7 – Consider the following as potential community amenity contributions (continued): . Protection of large trees or natural features . Conservation of heritage property . Public art . Sidewalk, trail, path, road or bike route improvements . Provision of a trail or walkway . Attractive paving, street trees and site furniture . Public parking spaces

12 What should CACs not pay for? . DCC projects (or potential DCC projects) . Covered under a DCC Bylaw . Frontage improvements . Frontage requirements at time of subdivision or building permit (Local Government Act, SDS Bylaw) . “Excess” or “Extended” services . If required by the municipality, then provided under a Latecomer Agreement (Local Government Act)

13 Basic DCC Calculation

DCC Recoverable Costs Units of Growth DCC Rate (Net DCCs) ÷ =

14 DCC Recoverable Costs (Net DCCs)

= Technical inputs

(1) Growth = Council policy inputs Projections = Calculated values

(2) Total DCC Re- (4) Assist Project (3) Benefit coverable Factor Costs Allocation = Costs

Proportion of Legislation the project that requires that LG’s benefits new must “assist” development development

15 Considerations for Oak Bay Growth and Development . relatively modest residential growth – mostly redevelopment and/or potential infill . some commercial development potential – especially as part of mixed use projects . no industrial growth projected . some institutional growth potential, e.g. congregate care facilities. School development has been for replacement of existing facilities (e.g. Oak Bay High) but potential at UVic

16 Considerations for Oak Bay Infrastructure Requirements . Transportation – potential for active transportation upgrades (cycling, pedestrian) and trails . Water and Sewer – some upgrades required due to growth and development . Stormwater – some upgrades required due to growth, some from regulatory requirements Additional discussion and review with Engineering Department required

17 Potential DCC Range . Worked with Engineering to determine high-level infrastructure components impacted by growth (water, sewer, drainage, transportation) . DCC Project Costs range from $22M to $45M. . With Benefit Allocation and Assist Factor, potential Net DCC Recoverable between $10M and $20M (i.e. municipal contribution between $12M and $25M) . Potential Single Family DCC (sample only): . $12,000 to $25,000 (current OCP Growth Rate @ 32 units / year) . $8,000 to $16,000 (higher Growth Rate @ 60 units/year)

18 DCC Comparisons in CRD Single Family DCC Comparison Rates (per lot)

Langford (2017) $13,579.34

View Royal - Area 2 (2001) $12,136.95

Roads DCC Colwood (2011) $9,661.34 Drainage DCC Sewer DCC Water DCC , District (2016) $9,264.00 Parkland DCC Regional DCC

View Royal - Area 1 (2001) $8,732.05

Victoria (2017) $6,557.53

$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 Note: Central Saanich small lot (<300 sq.m. lot) DCC totals $7,826.00 Langford Single Family (<300 sq.m. lot) DCC totals $10,796.34 Langford contracts its sewer to a third party, who charges a sewer capital fee ($9,994 per SF lot)

19 DCC Considerations . LGA requires municipalities to consider whether DCCs will “deter development” in its community . As a financial recovery tool, DCCs are a challenge in Oak Bay due to relatively low growth and mostly infill development . A limited DCC program could be considered by Oak Bay for water, sewer, drainage and transportation (and possibly parks) . DCCs for SF in the region range from ~$6,500 in Victoria to ~$13,500 in Langford (plus $10k sewer)

20 CAC Approaches in the CRD

Approach Type of Program in Place (established policy vs. negotiation)

District of Central Saanich Density Bonusing Negotiated

Council Policy at time of rezoning based on community amenity fund City of Colwood Negotiated + Affordable Housing Reserve Fund

Township of Negotiated Negotiated

District of Highlands Amenity Rezoning Considerations Negotiated

City of Langford Affordable Housing and Amenity Contribution Policy Established Policy

District of Negotiated Negotiated

District of Community Amenity Policy Negotiated

District of Saanich Negotiated Negotiated

Town of Sidney Bonus Density & Community Amenity Contribution Established Policy

District of Community Amenity Contribution Policy, 2010 Established Policy

City of Victoria City of Victoria Density Bonus Policy Established Policy

Town of View Royal Negotiated Negotiated

21 CAC Considerations . Most communities in CRD use CACs (or density bonusing) as part of rezoning applications, with some communities (4) establishing guiding policies to aid in the negotiation process . CACs are used for various items – from seismic upgrades to heritage buildings (Victoria) to park development (N. Saanich) to affordable housing (Langford, Colwood, others) . Currently, Oak Bay has been negotiating developer contributions on an individual basis, with no formal policy currently in place

22 Potential Next Steps . DCCs and CACs are two (of many) important development finance tools which have potential benefits to the District of Oak Bay . Staff and consultant are researching CAC policy options, which could be completed and presented for Council review and consideration (Fall 2018) . Consider implementing a relatively limited DCC program for infrastructure upgrades due to growth (late 2018 / early 2019)

23 Questions

24 District of Oak Bay

Development Cost Charges (DCCs) and Community Amenity Charges (CACs)

Presentation to Council July 9, 2018

Dan Huang, MCIP, RPP Senior Planner / Principal DCC Comparisons in CRD

Townhouse DCC Comparison (per unit)

View Royal - Area 2 (2001) $11,805.04

Langford (2017) $10,464.43

Roads DCC View Royal - Area 1 (2001) $8,400.14 Drainage DCC Sewer DCC Water DCC Colwood (2011) $6,663.43 Parkland DCC Regional DCC

Central Saanich, District (2016) $6,339.00

Victoria (2017) $5,566.57

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

26 DCC Comparisons in CRD

Apartment DCC Comparison Rates (per sq.m. GFA)

View Royal - Area 2 (2001) $10,975.24

Langford (2017) $8,277.63

Roads DCC View Royal - Area 1 (2001) $7,570.34 Drainage DCC Sewer DCC Water DCC Central Saanich, District (2016) $5,770.00 Parkland DCC Regional DCC

Colwood (2011) $4,916.63

Victoria (2017) $4,156.86

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

27 DCC Comparisons in CRD

Commercial DCC Comparison Rates (per sq. m. GFA)

Langford (2017) $70.74

View Royal - Area 2 (2001) $39.57

Roads DCC Central Saanich, District (2016) $37.96 Drainage DCC Sewer DCC Water DCC Victoria (2017) $30.96 Parkland DCC Regional DCC

Colwood (2011) $29.61

View Royal - Area 1 (2001) $26.01

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

28 DCC Process Present DRAFT DCC Rate to Council Estimate Growth* Calculate DCC Rates DCC Open House

Determine Three Capital Costs Readings of DCC Bylaw Determine Equivalent Units Approval by Province Determine Benefit Determine Factors Bylaw Municipal Assist Factor Adoption

29 DCC Recoverable Costs Example

Portion of Total DCC Costs Municipal Program Recoverable Allocated to Assist Costs Costs Existing Dev. =

50% 5% $100,000 $47,500

($50,000) ($2,500) = Example

*Note: Total Municipal Contribution = $50,000 (Benefit Allocation) + $2,500 (Assist Factor) = $52,500

30 Benefit Allocation & Municipal Assist Factors

. Benefit Allocation . Reflects the benefit of each project to the existing community (i.e. separate benefit allocation for each project) . Municipal Assist Factor . Can vary from 1% to 99% (Council decision) . Must be the same for all land uses within an infrastructure category (e.g. 1% for roads, 5% for water, 1% for sanitary sewer, etc.)

31 DCC Exemptions (by Legislation, i.e. Local Government Act) . Tax exempt buildings under the Community Charter (e.g. churches) . Development where DCCs have been previously paid or no addition burden created . Development less than $50,000 in value (can be increased by bylaw) . Construction of three or less self-contained dwelling units (can be decreased by bylaw) . Residential dwelling units that are less than 29m2 in size (can be increased by bylaw)

32 DCC Waivers & Reductions (by Bylaw – no Ministry approval required) . Not-for-profit rental housing, including supportive living housing . For-profit affordable rental housing . Small lot subdivisions designed for low GHG emissions . Development designed to result in low environmental impact *Amount waived must be entirely recovered from existing development (i.e. existing ratepayers).

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