Langford councillors say recent legislation enables worrisome budgeting behaviour

Langford councillors Kimberley Guiry, Colby Harder, and Keith Yacucha recently published a collaborative commentary in the Times Colonist, warning against an overreliance on development to boost Community Amenity (CACs) and General Amenity Contributions (GACs) rather than raising property taxes. They’re also concerned with the ways that the collection of these development funds will be more tightly legislated by Bill 46.  

Bill 46 titled the Housing Statutes (Development Financing Amendment Act) expands the list of what development costs charges can be spent on. For example, among other restrictions, it removes the ability, for municipal governments, to fund affordable housing through Community Amenity Contributions or CACs.

CACs are secured as conditions of by-law enactment. They come in two forms: in-kind, where land and/or capital facilities are provided by applicants—typically as an on-site public benefit—or in cash, where payment is provided by developer applicants in lieu of providing land and/or capital facilities as a public benefit.

These voluntary contributions go towards public benefits that are provided when councils grant additional development rights through the enactment of rezonings. All CACs are negotiated between the applicant and the city (on behalf of council) with council as the approving authority. Cash CACs are deposited into dedicated reserves and invested, through council’s approval, on public benefits through operational planning and annual budget processes.

When it was proposed in November 2023, Ravi Kahlon, minister responsible for housing, touted the bill as a means to reduce housing approval and construction delays. However, the legislation restricts flexibility for decision makers at the municipal level to ensure that infrastructure service reflects realities on the ground in the face of fast-paced growth. 

The Langford councillors say they are worried that the bill will directly impact what amenity funds can be collected through the development process and the flexibility in how they are able to use those funds.“In the past decade, we’ve [Langford] spent more than $10 million of our amenity funds to help offset property taxes,” wrote the councillors in the Times Colonist. 

“We’ve been using millions of dollars from our General Amenity Reserve Fund,” they wrote “and millions more in internal borrowing as a Band-Aid solution to temporarily delay necessary increases and keep taxes low. As a result of this, many of us are disconnected from the true cost of service delivery.”

With Bill 46 in force, amenities charges will no longer be determined on a case-by-case basis through negotiations between the municipality and the developer during the permitting process, but, instead, through a one-size-fits-all approach outlined in the new legislation.

Within Bill 46, an amenity cost charge is “a condition of the issuance of a building permit and must be part at the time building permits are issued for the development of a property in an area where an amenity cost charge by-law applies.”

Through the new legislation, up-zoning in rapidly developing communities like Langford, means that municipalities must also make sure they can provide adequate service infrastructure. It’s not  clear to these councillors that Langford will have the capacity to do that once development options run out.

The equitable distribution of benefits is another concern for Coun. Yacucha. “We have over 30% of our residents who are renters who pay property taxes indirectly through their rent. Their landlord, while paying taxes, may or may not live in the community and thus may or may not receive the benefit from CACs.”

The equity issue also applies to other “development-poor” areas in the CRD not earmarked by the province for the kinds of numbers of units that would otherwise result in the collection of fees that boost amenities in those regions.

And then there is the fiscal risk of a kind of borrowing from Peter to pay Paul if municipalities use these funds to subsidize an operational cost instead of using them as intended. It would be akin to “using your Child Tax Benefit to pay your cell phone bill. The risk being that, if the [CAC] program were to decrease, you cease to qualify, or the program would be axed, you would be left with an increased operational cost that you would now be pressed to cover.”

Finally, said Yacucha, “The risk is that, eventually, Langford will be built out and there will be a natural point in the future where development will slow due to market forces and availability of land that is available to develop.”

Then there will be no money to borrow from Peter and Langford will be pressed to cover the city’s operational costs.