Developers have told City of Lacombe its proposed development levies are too high and would push up new housing costs.
Last fall, a levy update was unveiled that proposed increases ranging from 10 to 350 per cent, with an average increase of 46 per cent. The last levy bylaw setting out rates was passed in 2013.
Lacombe administration met with landowners and developers from October to December to get feedback. While most understood the need for levies and had “tolerance” for rate increases, concerns were raised over the city’s proposal, says a report going to council on Monday from city engineering services manager Amber Mitchell.
Among the key issues was that developers felt the proposed rates were too high and would make it harder to sell and develop properties as well as increasing housing costs.
Administration agreed to tweak the proposed rates, reducing the average levy from $115,107 per hectare to $95,500 per hectare. The lower rate changes the average rate increase from the current $79,000 from 46 per cent to just under 20 per cent.
Developers also told the city the timing for rate increases was wrong because of the recent economic slowdown.
Administration is proposing options to phase in increases over three years and will be seeking city council’s input on development incentives, which could include lower levies or tax incentives.
Concerns were also expressed with the city’s 20-year infrastructure projections in setting the rates. A more realistic horizon would be 10 years given that infrastructure such as sewer and water lines may not be needed for decades, say developers.
Administration has suggested tweaks that would include charging new development 30 to 40 per cent of the cost of new roads and facilities, instead of the 50 per cent originally proposed.
Developers also wanted assurances that if they are required to contribute to a new fire hall it should be located so as to provide a response time of 10 minutes or less. Under the Alberta Building Code, that standard allows for smaller housing setbacks, which allows for more affordable lot costs.