Abbotsford Finds Creative Way to Defer DCC Increase

By Mike Harrison

The City of Abbotsford is increasing its DCCs, lowering CACs and adding a new ACC, but Council has postponed the effective date, which extends protection for in-stream applications from the standard 12 months to almost 2 years from now.

Partially driven by the Provincial housing legislation’s new regulations for an Amenity Cost Charge (ACC), the City of Abbotsford has been working through a comprehensive update to its municipal development fee structure, including a review of current Development Cost Charges (DCCs), a reduction in the Community Amenity Contributions (CACs) and addition of a new Amenity Cost Charge (ACC). The provincial housing legislation has modified the categories of costs that are permitted to be covered by each of the types of charges, and so it has been a much more complex project than DCC fee reviews of the past.

The result, which was given 3rd Reading on April 8th, is a 50% (or more) increase to DCCs, a 65% reduction in CACs and bonus density charges and the addition of a new ACC. The new and proposed rates are as follows:

Adjustments for In-Stream Applications

It’s possible that an application pays the current CAC rates but does not pay DCCs and ACCs until the new rates come into effect. The current CACs cover categories of costs that the future DCCs and ACCs will cover, so in the rare circumstance where an application pays today’s higher CACs and then also pays the increased DCC and/or ACC rates in the future, they could be overpaying. As a result, the City has stated it will provide partial credits to rebalance the fees and ensure no double-counting.

Next Steps

Mayor and council voted to give the bylaw First, Second and Third Reading April 8th and now the bylaw goes to the province for approval. Once approved, it will return to council for Final Adoption.

Now for the clever part. The Local Government Act requires municipalities to provide a 12-month protection period for all in-stream applications, and there is no ability to increase that time. That timeline defaults to start on the day the amended fee bylaw is given Final Adoption (likely June or July this year). City staff have discovered that if they set an alternative effective date for the fee increase, the effective date becomes the date which starts the 12-month protection period instead of the date the bylaw is adopted. So, the City has set an effective date of February 1, 2026, which means all in-stream applications have until January 31, 2027 to pay the current fees – almost 2 years from now!

Don’t underestimate the impact of this extended deferral. When development applications take years for approval, effectively, every instream application will be subject to the new fees if there is only a 12-month protection period. This stalls applications, as the fee increases can be the difference between a project being economically viable and financeable or not. Extending the protection period will allow a significant portion of the existing applications to avoid the increase and avoid having to shelve the project.

Additionally, developers looking at acquiring a new development site with an in-process application can justify underwriting at today’s rates, whereas developers will not take that risk with a 12-month grace period. The result of the extended deferral is that we will avoid stalling the land market any further, a critical component of getting land into the hands of home builders.

CLICK HERE to read the full report to council on the subject or send me a message and I can email you a copy of the entire report.