The City of Coquitlam has approved increases to its rates for development cost charges (DCCs), increasing the price to build in a municipality that's become very popular among developers in recent years.

In Coquitlam, development cost charges are levied on all development applications with a construction value below $150,000, and the City uses the revenue to help pay for expanding necessary infrastructure, including transportation, water, sewage, drainage, and parks.

Development projects that require rezoning are also subject to community amenity contributions (CACs), but DCCs for non-residential projects are very low, so as to not hinder economic growth.

Like many other municipalities, the City of Coquitlam reviews its DCCs regularly and adjusts the rates in order to reflect the economy and growth trends. As part of this process, the City is now raising all of its DCCs by 4.5%, reflecting the 4.5% increase in the Vancouver Consumer Price Index published by Statistics Canada in April 2023.

Following the increase, the total DCC for single-detached homes is now at $63,141 — by far the highest of any type of development. Multiplex housing forms have a total DCC of $41,448 per unit, followed by rowhouses and townhouses at $37,418 per unit, and then multi-family complexes at $23,715 per unit.

A chart of the new rates for development cost charges (DCCs).The new rates for development cost charges.(City of Coquitlam)

"While this increase is below the construction cost escalations observed over the past year estimated at 10%, it helps the City's rates to keep up with the inflationary cost increases in the region," staff said in a recent report.

The 4.5% increase is relatively modest when compared to other municipalities. In Vancouver, rates for DCCs were set to increase by 8.3%, until Council opted to defer the increase until 2024 in order to avoid further worsening project viability for developers.

Earlier this year, the City of Surrey also increased its rates for DCCs, by 9.3%, which are now in effect. Although Coquitlam's increase of 4.5% is much lower, the actual DCC is higher in some cases. In Surrey, the total DCC charges for non-multi-family homes do not exceed $53,154. DCCs for multi-family homes are then charged according to square footage rather than per unit like in Coquitlam.

Coquitlam City Council granted a first, second, and third reading to the bylaw amendment earlier this month, before granting a fourth and final reading Monday evening.

Applications that are currently in progress will be protected, and the new rates will come into effect on Sunday, October 1.