Development Cost Charges

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Using Development Cost Charges to Finance Smart Development

Development Cost Charges (DCCs) are the most common means of financing growth-related infrastructure.

They are one time charges that local governments can levy on most new subdivision and building at the time of approval. DCCs shift financial responsibility for providing capital costs for off-site infrastructure, including sewer, water, storm drainage, roads, and parkland, from the general tax base to the developers of new growth requiring the infrastructure.

However, DCCs cannot be used to pay for ongoing maintenance and operating costs for new infrastructure. Local governments are authorized to collect DCCs under the Local Government Act (see Division 10 - Section 932).

DCCs are one way for local governments to encourage climate-friendly development. A good DCC schedule provide financial incentives for development with lower infrastructure capital costs. In other words, development that is higher density, centrally located, and energy efficient would pay lower DCCs.
 
Local governments are authorized to collect DCCs under the Local Governments Act (see Sections 932 – 37.1). Amendments made to the Local Government Act in2008 expanded local government authority regarding DCCs by enabling local governments to waive or reduce DCCs for, for- profit affordable rental housing, small lot subdivisions designed to result in low greenhouse gas emissions, and developments designed to result in a low environmental impact. The requirements that a development must meet in order to receive a waiver or reduction must be clearly stated in the DCC bylaw.

Community Examples

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