The City of Vancouver has the highest development fees for condos and among the highest number of separate fees, which has a significant influence on the cost and timeline to deliver units, according to a new study by CMHC.
The agency’s latest report, to be published on its website Tuesday, found that total fees amounted to $140 per square foot on the city’s lowrise and highrise condo developments, mostly due to density-related community amenity fees, accounting for about 20 per cent of construction costs.
However, in the Canada Mortgage and Housing Corp.’s comparison of Vancouver, Toronto and Montreal, the agency found that Toronto charged higher fees than Vancouver on townhouse and single-detached development, which made that city’s fees higher on average, which analyst Eric Bond said offers some lessons.
“In some cases, the government charges, or the amount of the charges, seem to run contrary to other municipal objectives such as densification,” said Bond, an economist and senior specialist in CMHC’s Vancouver office.
Bond said the purpose of the report was to compile a set of data to compare municipal fees and development charges across Canada’s biggest cities and a subset of municipalities and spark a discussion about “best practices” for levying fees in a way that helps deliver more affordable housing.
“We fount that the number and magnitude of government fees vary substantially by municipality,” Bond said, and that the fees add up to “an important component in the final price paid by homebuyers.”
On average, Vancouver’s fees added up to $70 per sq. ft, compared with $86 per sq. ft in Toronto. Both cities overshadowed Montreal, where fees and charges average out to just $24 per sq. ft.