Surrey’s general manager of planning says previous years’ construction figures that climbed well past $1 billion were ‘blips’ caused by the construction of several institutional projects

Surrey hits the billion-dollar building mark – barely

Construction in the city has declined over the last three years

Surrey just inched past the billion-dollar mark in development last year, as the city experienced its third year of building declines.

This city first burst past $1 billion in building permit values in 2004 and climbed north of $1.5 billion until the global economic meltdown of 2008.

In the years following, Surrey was registering about $850 million annually in development, but the numbers rallied as confidence in the building industry resumed.

That confidence was matched with federal infrastructure cash meant to spur “shovel-ready” projects.

In 2011, Surrey saw $1.2 billion in development, followed by a year with $1.3 billion.

Then things in the development sector began to slide a bit in Surrey.

In 2013, the city logged $1.13 billion in building permit values, and last year fell even further to $1.02 billion.

Jean LaMontagne, Surrey’s general manager of planning and development, said the previous years’ climb well past $1 billion were “blips” caused by the construction of several institutional projects, such as Surrey Memorial Hospital’s new critical care tower, the Jim Pattison Outpatient Care and Surgery Centre, and the RCMP E-Division headquarters.

Over time, development in the city has remained fairly stable at about the billion-dollar mark each year.

Of last year’s construction, just over $700 million was attributed to residential building, a total of 69 per cent of building permit totals for the year.

Commercial building came in well behind at $186 million, or 18 per cent of total construction.

Industrial growth was $98 million (nine per cent), while institutional and “other” were $33 million (just over three per cent).

The balance of residential versus commercial and industrial growth is important from both policy and financial perspectives.

The City of Surrey is aiming to have one job per resident, which will require much more commerce and industry.

Surrey currently has .71 jobs per resident.

In addition, commerce and industry bring in about three times the taxes while drawing less on city services, such as libraries and recreation centres.

Such is the case in Vancouver.

About 69 per cent of Surrey’s tax income comes from residential property taxes, a figure planners and finance staff would like to see fall to about 50 per cent.

Surrey has had nearly 70 per cent of its tax revenue come from residential properties for about the past 15 years.

Last year, Surrey obtained a 60-per-cent residential/40-per-cent commercial and industrial ratio.

LaMontagne said the city can make plans for higher commerce and industry, but it is at the mercy of regional market forces.

First-time buyers like to buy homes in Surrey, where they won’t be mortgage poor.

“That draws people here from an affordability factor,” LaMontagne said on Tuesday. “Because of the market conditions in the region, it puts a lot of pressure on residential (tax bases) in Surrey and Langley.”

A similar situation is occurring on the other side of Scott Road.

Last year in Delta, there was an increase in construction, as that municipality saw a climb in values from $264 million to $283.9 million – a bump of 7.4 per cent.

Out of that, $221 million, or 78 per cent was residential construction, while commercial, industrial and institutional building amounted to just 20 per cent (the remaining two per cent was “other” construction).

In all, the high number of residential projects increases the pressure on homeowners to pay for the costs of running the municipality.