Best not to make exception on tax rules for downtown project

THURSDAY MORNING EDITORIAL — Disagreement over the City’s development cost charge policy — known as DCCs — has been going on for years.

For builders, they’re an extra expense, one that must be passed on to the buyer. That raises the selling price.

DCCs are especially out of favour during poor economic times, when houses and apartments become harder to sell because potential buyers are guarding their wallets.

These aren’t the best of economic times but they aren’t the worst, either. At the start of the new millennium, when the economy was in the dumper, builders urged City council to give them a break on DCCs in an effort to stimulate home sales.

The City didn’t give it to them but the builders made it through. The economy improved and DCCs receded to the back burner as an issue.

Nevertheless, they come up for periodic review, usually with respect to rates, sometimes regarding the policy in general.

At this week’s City council meeting, councillors debated a request from the Kamloops United Church for a break on DCCs and taxes for its affordable housing apartment project on St. Paul Street.

In addition to wanting relief from DCCs, the church asked for a 10-year tax exemption but the project doesn’t qualify under current bylaws.

Some council members were anxious to help the church, some were reluctant to make an exception. Council could change its bylaws to make the church eligible for a tax exemption, and staff will report on possibilities in due course.

As for DCCs, they’re intended as a protection for taxpayers — they’re a way for developers to put money into a pool that defrays the costs of services to new developments. Without them, taxpayers would, in effect, be subsidizing builders.

It’s understandable that council is taking a serious look at somehow providing some taxation relief to make the units in the church’s project more affordable for potential occupants.

But the church has been working on this project for several years. It knew when planning began that DCCs would be part of the picture. As Coun. Ken Christian said, “We went through a long exercise on DCCs. It was a lengthy process and there is a degree of sensitivity in the development community. I think we have an agreement in place, and it was evident to the United Church going into the process.”

Christian wasn’t on council 14 years ago when homebuilders were lobbying for DCC waivers, but his point is valid. Consistency isn’t everything in politics, but it’s important. If exceptions weren’t made in bad economic times, they shouldn’t be made in stable times.

So the DCCs will stay, but the tax exemption remains in play. That presents a dilemma, too, because if the bylaw is changed to include the church’s apartment project, it must in fairness allow any similar projects the same opportunity in future.

As wonderful a project as this one is, sometimes it’s better, and fairer, to leave things as they are.