Surrey City Council Approves Development Cost Charge Reductions Amid Housing Affordability Struggles

📅 Today

Surrey City Council has approved reductions to development cost charges for residential construction, aiming to support housing affordability. The new rates will take effect once approved by the Province, alongside the endorsement of a new amenity cost charges program.

In a significant move to address housing affordability challenges, the Surrey City Council approved an update to its development cost charges (DCC) bylaw last week. The decision comes at a critical time for homebuilders, who are facing difficulties in advancing new construction projects. The City initiated the process of revising its DCC Bylaw in 2025, responding to new provincial legislation, with an update intended for 2024. However, the review process has been delayed due to job action within the Province, leaving the 2024 bylaw as the most current regulation.
Looking ahead, the City is set to bypass the anticipated 2025 DCC Bylaw and proceed directly to a 2026 DCC Bylaw. This new bylaw will implement a reduction in DCC rates for residential construction, with decreases ranging from 7% to 9%. Specifically, the DCC rate for small-scale multi-unit housing (SSMUH) lots, commonly referred to as multiplexes, will decrease from $55,260 per unit in 2024 to $51,633. Additionally, rates for low-rise residential buildings will drop from $33.47 per square foot to $30.72 per square foot, while high-rise rates will decrease from $33.18 per square foot to $30.30 per square foot.
Conversely, the DCC rates for commercial and industrial buildings are set to increase. According to a staff report, these reductions for residential development are feasible due to a decline in program value for Parks Acquisition and Improvements and Collector Roads, coupled with an increase in DCC reserves. However, commercial and industrial rates cannot be reduced as they do not contribute to Park DCCs and currently enjoy rates that are significantly lower than those for residential.
The City emphasizes that the new residential DCC rates are competitive when compared to other municipalities. Staff noted that Surrey's proposed 2026 DCC rates are comparable or even lower than those of the Township of Langley, City of Coquitlam, and City of Burnaby, all of which face similar growth demands along with new and redevelopment projects. Notably, Surrey's rates for high-rise developments are the lowest among these municipalities, as the City has been able to provide a substantial number of units each year, leading to a lower DCC rate per unit.
Mayor Brenda Locke articulated the necessity of these changes, stating, "If we want people to be able to live and buy a home in Surrey, we need to make housing more affordable to build." She added that by lowering DCCs, the City is facilitating the construction of more homes for both current and future residents while continuing to invest in essential infrastructure such as roads, utilities, parks, and other community amenities.
The 2026 DCC Bylaw has now been submitted to the Province for approval. Once cleared, it will return to the City Council for final adoption, with the new rates poised to take effect immediately thereafter.
In conjunction with the DCC updates, the Surrey City Council also endorsed a new amenity cost charges (ACC) program at the same meeting. This program, introduced by the Province in Fall 2023, aims to replace community amenity contributions (CACs). The ACCs are designed to fund only the growth-related portion of capital costs associated with population and employment growth, according to a report from City staff.
The proposed ACC program will consist of two funding streams: the first aims to generate $350 million for city-wide amenities such as a community center, an interactive art museum, and various park features, while the second will generate $147 million to partially fund the replacement of the Newton Recreation Centre. The total ACC rate is set at $10.58 per square foot for apartments and $6.87 per square foot for townhouses, with non-residential building rates remaining below $0.39 per square foot. The City reports that many of these proposed rates are reductions compared to those initially presented during public consultations.
Coriolis Consulting Corp. has been retained to assess the financial implications of the new ACC program. Their findings indicate that apartment projects will generally incur lower fees under the ACC program compared to the former CAC program. Furthermore, not-for-profit rental housing managed by a public housing body will qualify for a complete ACC waiver. For-profit affordable rental housing, which maintains rents at least 10% below CMHC medians for Surrey, may receive full or partial ACC waivers depending on the length of the affordability agreement. Projects with agreements extending over 60 years will be eligible for a full waiver, while shorter agreements will qualify for partial waivers.
Similar to DCCs, the payment of ACCs can also be deferred, with an initial 25% due upon subdivision approval or building permit issuance, and the remaining 75% payable upon occupancy or after a four-year period. The Surrey City Council's endorsement of the ACC program is now in the process of drafting the necessary bylaws, which will be presented for readings in the future.

Related Posts