bc’s development cost deferral policy could change your project
The Province’s new development fee deferral policy has been making headlines across British Columbia, and for good reason. It promises to ease the financial burden on builders, unlock stalled housing supply, and streamline the economics of getting projects out of the ground. But while the headlines are clear, the implications for real-world projects — and for the landowners behind them — have been far less explored.
This article breaks down what the policy actually means at the project level. We’ll walk through concrete examples, explain how it affects early-stage cash flow and deal certainty, and offer clear, actionable insights for both developers and landowners.
Whether you’re trying to make a Metro Vancouver project pencil or wondering if your suburban property just became more valuable, this is where the conversation gets real.
here’s what’s actually new with dcc payments
Effective January 1, 2026, developers across most of BC will benefit from more flexible payment options for Development Cost Charges (”DCCs”). DCCs are one-time fees paid at the building permit stage to fund infrastructure like roads, water, and sewer systems.
The core changes:
25% of DCCs are due at building permit
75% is deferred — payable at occupancy or after four years, whichever comes first
Surety bonds can now be used as security (instead of letters of credit)
This policy applies to all municipalities and regional districts in BC, except the City of Vancouver, which is implementing a parallel policy under its Charter.
For more details on the relevant City of Vancouver policy, please see this sister article.
why developers suddenly get more breathing room
early-stage cash flow relief
Under the old rules, developers typically had to pay one-third of DCCs at permit, with the remainder due within two years — often well before a project had any income. Now, three-quarters of that burden is deferred until the building is nearly done or occupied.
reduced carrying costs
In practical terms, this reduces the amount of time developers are paying interest on money that isn’t yet producing revenue. That matters a lot in today’s high-rate environment.
improved liquidity and scalability
By accepting surety bonds, the province has freed up developers’ credit lines. That means more room for construction financing, less cash locked in standby, and in some cases, the ability to start a second project while the first is still underway.
bond vs loc: what you need to know
surety bonds: how they work
Unlike a letter of credit (LOC), a surety bond doesn’t tie up your borrowing capacity. It’s essentially an insurance-backed guarantee to the city that your DCC payment will be made. If your project defaults, the municipality can draw on the bond — but you’re not posting liquid capital up front.
This improves your working capital position during construction and may lower your financing costs.
does this apply to your project?
This policy applies province-wide, except Vancouver (which has introduced its own DCL installment rules). It kicks in at the building permit stage — so rezoning applications, land assemblies, and pre-permit phases remain unaffected.
are municipalities ready?
Most municipalities have expressed strong support, but some may need to update internal systems. Vancouver has planned for a short-term cashflow gap using interim borrowing. The transition will require coordination — especially around bond acceptance — but sentiment is positive.
how to make this actionable
Contact your surety provider or begin qualification if you haven’t already
Re-run pro formas on projects that stalled in the past 1–2 years
Talk to your lender — this shift may improve project debt coverage or reduce equity requirements
Prepare for faster permit-to-build transitions — your capital demands just got lighter
50‑unit mid‑rise: $100k less at permit
Consider a six-storey, 50-unit condo project in a Metro Vancouver suburb. With DCCs averaging around $24,000 per unit, total development cost charges would come to approximately $1.2 million.
before the policy change
Under the old rules, roughly $400,000 (one-third) would be due at the time of building permit, and the remaining $800,000 would need to be paid within two years — regardless of how far along the project was. Even if construction slowed down or the market shifted, that $800,000 had to be financed. The result was increased borrowing, reduced flexibility, and additional risk, especially for smaller developers.
After the policy change
Now, only $305,000 (25%) is payable at building permit, and the remaining $915,000 is deferred until either occupancy or four years, whichever comes first. That means the builder carries far less cost at the most vulnerable point in the project timeline. The balance can be paid much later — likely once the units are sold or refinanced.
That shift alone improves project cash flow and frees up early-stage capital, which can be the difference between a project moving forward or not.
20‑storey tower: $3.3m pushed later
Now consider a 120-unit concrete high-rise in an urban core. At approximately $37,000 per unit, total DCCs would amount to around $4.4 million.
before the policy change
A developer would typically need to pay about $1.5 million upfront at building permit and the remaining $2.9 million within two years. For a project of this scale, construction often takes two to three years — meaning the full DCC amount would be due before the building is even finished.
That meant millions tied up early in the project, increasing financing risk, reducing flexibility, and weakening the business case during the pre-revenue phase.
after the policy change
Only $1.1 million (25%) is now due at permit, with the remaining $3.3 million deferred to occupancy or year four. That deferral gives the developer more time to stabilize the project financially.
Rather than carrying $3 million in fees through construction, they can allocate that capital toward hard costs, reduce reliance on high-interest financing, and improve internal rate of return. In some cases, this shift alone could determine whether a tower proceeds, pauses, or is shelved altogether.
landowners: did your site just get more attractive?
could this increase the value of your land?
Yes — but subtly. Developers are still paying the same DCC amount, but the timing change improves their project feasibility. That can slightly increase what they can afford to pay for land — especially on sites that previously didn’t quite “pencil.”
are deals more likely to close now?
Yes. When upfront costs go down, deals are less likely to collapse at the financing stage. That means fewer broken contracts, more certainty, and greater follow-through once the developer has committed.
how to reposition your selling strategy?
If you’ve been sitting on a stalled site — or if you had interest last year but couldn’t reach agreement — now may be the time to re-engage. Developers are actively updating pro formas and deal models based on this shift.
Savvy landowners are already adjusting their pricing and positioning to reflect this new playing field.
cities still get paid—just later
Let’s be clear: this is not a subsidy. Cities still collect 100% of DCCs — just later. And they’re protected by:
On-demand surety bonds
A firm 4-year payment cap
Payment at occupancy, when value is realized
Most local governments support the move and view it as a balance between fiscal responsibility and pro-housing policy.
what this means for your land, right now
The DCC deferral is a cash flow change — but one that matters deeply in development economics
More projects now “pencil,” especially in the missing-middle range (wood frame, low-rise, infill)
Developers should re-evaluate paused projects
Landowners may find their property is more valuable or viable than it was six months ago
If your property is in the City of Vancouver, note that a similar deferral policy is already in place under separate city legislation. You can learn more about Vancouver’s version of the rules — and what they mean for landowners — in this sister article.
ready to talk? let’s explore what’s possible
If you’re a landowner wondering whether this policy shift changes the development outlook for your property — let’s talk.
I work directly with landowners and developers across Metro Vancouver, helping decode policies like this into real-world opportunity.
If your property has stalled, or if you’ve been waiting for the right conditions to act, this may be the signal you’ve been looking for.
-
British Columbia Government. (2025, July 2). More flexibility for development charges will unlock more homes for people [News release]. Province of British Columbia. https://news.gov.bc.ca/releases/2025HMA0056-000638
British Columbia Government. (2025, July 15). More support for builders will unlock more new homes in Metro Vancouver [News release]. Province of British Columbia. https://news.gov.bc.ca/32575
Mendoza, C. (2025, July 3). B.C. homebuilders welcome deferral of development fees amid housing slowdown. Canadian Mortgage Professional. https://www.mpamag.com/ca/news/general/bc-homebuilders-welcome-deferral-of-development-fees-amid-housing-slowdown/541337
Brooke, M. P. (2025, July 2). BC incentivizes housing developers with staggered cost charges. Island Social Trends. https://islandsocialtrends.ca/bc-incentivizes-housing-developers-with-staggered-cost-charges/
IndustryIntel. (2025, July 2). British Columbia Government expands surety bond program for housing development; new regulations allow homebuilders flexible payment options to accelerate construction across province [Press release]. IndustryIntel. https://www.industryintel.com/news/british-columbia-government-expands-surety-bond-program-for-housing-development-new-regulations-allow-homebuilders-flexible-payment-options-to-accelerate-construction-across-province-171609694392
Prime Property Group. (2025, July 7). B.C. builders welcome changes to development cost charges as housing starts drop. Prime Property Group. https://www.primepropertygroup.ca/b-c-builders-welcome-changes-to-development-cost-charges-as-housing-starts-drop/
Chiang, C. (2025, July 2). B.C. is easing rules on upfront costs for homebuilders to spur project construction. Canadian Press. https://www.canadianmortgagetrends.com/2025/07/b-c-is-easing-rules-on-upfront-costs-for-homebuilders-to-spur-project-construction/
more about this topic
Current Opportunities
