The City of Castlegar is making some changes to development fees and revitalization taxes to encourage housing and other developments in the city.
On May 2, city council passed the first three readings of a bylaw amendment that, once approved, will waive or reduce development charges for specific types of housing projects.
Development Cost Charges (DCC) are fees placed on new developments by local governments to support new infrastructure such as roads and parks plus water, sanitary and storm systems. The city currently collects $3,902 per unit in a multi-family development.
DCC will be waived for not-for-profit rental housing, including supportive living housing.
DCC will be reduced for for-profit affordable rental housing by 50 per cent for projects in the Downtown Specific Growth Area in the city’s Official Community Plan.
DCC will be reduced by 30 per cent for for-profit affordable rental housing for projects in other specific growth areas in the city.
To qualify for the reduction, proponents must enter into a housing agreement with the city for a period of 10 years that maintains standard affordable rental rates.
Charges will not be reduced for for-profit affordable rental housing outside of specified growth areas.
The new policy is in line with other municipality’s development incentive programs across the province.
Revitalization tax exemption
Developers will have to choose which development incentive best fits their needs as projects will not be eligible for both programs. Also, developments that receive this tax exemption will not be eligible to apply for a permissive tax exemption.
Multi-family or multi-family/mixed-use construction or renovation valued over $500,000 may be eligible for the exemption as long as the property is located in the specific growth area.
Major industry projects on class-four properties may be eligible if the project improvements are valued over $750,000 and current property taxes are paid to date.
Light industry and business (classes five and six) properties may be eligible if their project is at least $10,000 in value and current property taxes are paid to date.
The new tax exemptions will be for a period of six years and will reduce in years three, five and six using a tiered approach.
Single-family and duplex dwellings are ineligible for the tax reduction as are secondary suites and multi-family properties outside of the targeted areas.
Final adoption of both amendments is scheduled for the May 17 city council meeting.