Metro Vancouver Just Increased Development Fees — And It Could Make Housing Even Worse

Across Canada right now, something interesting is happening.Cities and municipalities are doing everything they can to encourage new housing construction.They’re:

• Cutting development charges
• Deferring fees
• Offering incentives to builders

Because they understand one thing:👉 If we don’t build more housing, affordability gets worse.But here in Metro Vancouver?The opposite is happening.And for homeowners, buyers, and anyone watching the market—especially in places like Surrey—this could have serious consequences.

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While Other Cities Cut Fees… Metro Vancouver Raised Them

In many parts of Canada:

• Vaughan cut development charges by up to 90%
• Mississauga reduced fees by 50% or more
• Vancouver (city) introduced temporary fee reductions
• Surrey allowed developers to defer up to 75% of fees until completion

These are all moves designed to:👉 Stimulate construction during a slow marketBecause right now, new home sales—especially pre-construction—are extremely weak.

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Metro Vancouver Went the Other Way

Instead of reducing fees…The Metro Vancouver Regional District has chosen to increase development charges dramatically:

• Up to 240% increase on single-family homes
• Around 256% increase on townhomes
• Roughly 235% increase on condos

That means per-unit charges jumping from:👉 ~$6,000–$10,000 → as high as $21,000–$34,000 per unitAnd that’s just one layer of fees.Municipal charges still apply on top.

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Why This Matters (Especially in Surrey)

In markets like Surrey—where I work daily as a realtor—these types of cost increases don’t just stay on paper.They show up in:

• Higher home prices
• Fewer new developments
• Delayed construction timelines

Because ultimately:👉 Builders don’t absorb these costs—buyers do

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The Bigger Problem: We’re Already Not Building Enough

Here’s where this becomes a real issue.We’re currently in a market where:

• Pre-construction condo sales are extremely slow
• Developers are struggling to launch projects
• Investors have largely stepped back

So what happens next?👉 Developers stop building.And when new housing starts fall:

• Future supply shrinks
• Inventory eventually gets absorbed
• And prices can rise sharply later

We’ve seen this exact cycle before.

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This Looks a Lot Like the Early 2010s

After the 2008 financial crisis:

• Construction slowed dramatically
• Supply tightened over time
• And by 2015… prices surged

The risk today is similar.👉 If we choke off construction now, we may be setting up the next affordability crisis later.

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The Math Problem Nobody Is Talking About

Here’s the simplest way to think about it:👉 What is a 250% increase applied to zero sales?Because right now:

• New home sales are already extremely low
• Many projects aren’t viable
• And increasing costs makes it even harder to proceed

From what I’m seeing on the ground working with buyers and sellers across Surrey, demand for pre-construction has almost completely stalled.Adding more cost into that system?👉 It doesn’t fix the problem—it makes it worse.

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Where Is the Money Going?

The justification for these increases is infrastructure:

• Water
• Sewer
• Regional services

And those are necessary.But there are growing concerns around:

• Lack of transparency
• Rapidly increasing budgets
• Spending outpacing both population growth and inflation

For example:

• Operating budgets reportedly increased ~71% over 10 years
• Population grew only ~21% in that same period

That gap raises legitimate questions.

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The Disconnect in Policy

What makes this situation particularly frustrating is the contradiction:On one hand:

• Governments say we need more housing

On the other:

• Policies are making it more expensive to build

And in fast-growing areas like Surrey—where demand remains strong long-term—this disconnect becomes even more noticeable.

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What This Means for the Future

If this trend continues, the likely outcome is:

• Fewer housing starts
• Reduced supply in the coming years
• Increased pressure on prices once demand returns

👉 In other words:We may be solving today’s slowdown by creating tomorrow’s shortage.

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My Take

From what I’m seeing working in the Surrey real estate market every day, this is one of those policy decisions that could have unintended consequences.Right now:

• The market is slow
• Buyers are cautious
• Developers are already pulling back

Increasing costs in this environment?👉 It risks pushing new construction even further off a cliff.

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Final Thought

Housing affordability doesn’t improve when we make it harder to build.It improves when:

• Supply increases
• Development is encouraged
• And policy aligns with market realities

Right now, those things are moving in opposite directions.And if that continues, markets like Surrey—and the broader Metro Vancouver region—may feel the impact for years to come.

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Written by:
Steve Karrasch PREC
Karrasch Real Properties Team
Macdonald Realty