Burnaby council considering fee deferrals for construction companies

The City of Burnaby is considering offering a little relief for the construction industry during the COVID-19 pandemic.

That relief would come in the form of deferments of amenity density bonus fees owed to city hall, one of several fees paid in the development process. Council voted in favour of the measures in Monday evening’s council meeting.

In a report to council, staff said the pandemic has led to a slowdown in projects getting to final adoption in rezoning, in large part due to restrictions from financial institutions. Due to market volatility, according to the report, lenders are currently requiring developers pre-sell 60% or more of the residential units before they’ll finance these projects.

“Therefore applicants must raise private capital to fund pre-development municipal costs and charges, which can be in the tens of millions of dollars, and may not be easily, or affordably, obtained,” staff wrote in the report.

This has led to a decrease in fees and charges paid to the city and a slowdown in the construction industry.

The city requires developers to pay fees for building permits, construction plan approvals, rezoning, engineering servicing costs, housing fund charges and development cost charges, among others. But above all, staff said the amenity density bonuses are the most costly.

The density bonuses are fees developers pay to gain more density for their projects – a couple of extra floors on their tower, for instance. The money goes into a fund dedicated to building amenities for the city, such as parks or community centres.

Staff suggested the city offer a deferral of the density bonuses to allow the developers to complete the rezoning process. The developers would then have the development more or less secured – albeit without building permits or construction plan approvals – until a time in which market conditions are suitable for pre-sales.

Once the financing has been secured, the developer would be able to pay the city and proceed with building permits and the rest of the process.

“The benefit to this approach is that the city can obtain all necessary services and fees related to the subdivision of land including obtaining necessary road, cycle and pedestrian infrastructure,” city staff noted.

Council referred the matter to the planning committee this week to look at the impacts of the proposal before returning to the issue at a later meeting.

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