Here is a really neat analysis of housing/development in policy in B.C.
Create Housing Policies...
In particular, I enjoyed the discussion about how developer contributions act as a subsidy to rich established homeowners at the expense of first time buyers and renters.
(For those of you who don’t know what developer contribution (DCCs) are. A DCC is donation extracted by a municipality as a condition of new development; these funds are usually used for infrastructure upgrades, sustainability initiatives, or parks and other amenities.)
This seems like a good idea to me, however as the article explains it has the potential to work at cross purposes.
In short; if developers pay for amenities and other services property taxes remain low as these services do not need to be funded from general revenue. Low property taxes are of greatest benefit to established homeowners and people with larger more expensive homes. Additionally, these costs while paid for initially by the developer are ultimately reflected in the base price of new homes. This pushes up property values, a further benefit to established property owners and ironically the developer – who makes more profit the more expensive the home is.
This is a great example of trickle up economics at work.
Ultimately, despite the good intentions of policies like developer contributions the most powerful interests will benefit the most. In this situation, a policy intended to force developers to fund municipal services/amenities serves to subsidise rich homeowners and push up property values (And developer profits).
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