Vancouver eases development costs to help housing projects

Key Takeaways:

• Vancouver is introducing financial relief for developers to keep housing projects viable, including deferred payments for fees, expanded use of surety bonds, and a freeze on planned inflation-related increases.
• The city is streamlining development processes to reduce delays and costs, with improvements to rezoning timelines, sewer assessments, and design flexibility for taller and mass timber buildings.
• These changes are part of a broader strategy to ensure new housing—especially for middle-income earners—can move forward despite high construction costs and interest rates, with further reforms expected in the coming months.

The Whole Story:

Vancouver City Council has unanimously approved a slate of financial and regulatory changes aimed at keeping housing projects on track as rising construction costs and high interest rates threaten to stall new development.

The measures, passed Tuesday, are intended to relieve pressure on builders of rental and strata housing — particularly those targeting middle-income earners — as inflation and financing hurdles erode project viability.

“Vancouver currently leads the region in rental housing delivery,” said Mayor Ken Sim. “The changes passed today will give builders more flexibility to move forward and build urgently needed homes.”

Among the financial tools approved are deferred payment options for development cost levies (DCLs) and community amenity contributions (CACs), expanded use of surety bonds, and a freeze on scheduled inflation-related fee increases. Projects facing DCLs over $500,000 will now be able to pay in three installments, and the upfront CAC payment required at rezoning will drop from $20 million to $5 million, with the remainder deferred and secured through financial instruments.

Construction costs have surged faster than general inflation since the pandemic, and the city warns that without intervention, new housing supply will fall further behind demand, worsening affordability.

“By speeding up reviews and clarifying requirements, we’re helping projects move forward with greater confidence,” said Josh White, the city’s general manager of planning, urban design and sustainability.

Beyond financial measures, City staff are advancing process improvements to cut red tape and reduce costs. These include streamlining rezoning applications, updating sewer capacity assessments to avoid expensive off-site upgrades, and permitting larger floor plates for tall and mass timber buildings to improve construction efficiency.

The city is also refining its Community Benefits Agreement (CBA) policy to make requirements clearer and better support local hiring targets.

Council says the measures are the first in a series of reforms to help deliver housing while maintaining livability. Future steps will include further streamlining of rezoning, a review of growth-related funding tools, and updates to infrastructure and permitting policies.