Technically, these charges are paid by builders, but don’t kid yourself. They'll be passed along to buyers and indirectly to renters — even as people struggle to afford accommodation.
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The City of Ottawa is poised to impose massive development-charge increases on all types of new housing but you’d never know it from reading the report that comes to the planning and housing committee Wednesday.
It fails to mention just how big the increases are, a rather large oversight. To get those numbers, avid readers would have to turn to another report, the 358-page City-wide and Area Specific Development Charges Background Study, which came out in March.
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The proposed increases are significant. Development charges on a single-family house or semi inside the Greenbelt will rise from $43,494 to $55,678. That’s a 28 per cent increase. Charges on apartments are up a similar percentage, from $23,970 to $30,567. In suburban areas outside the Greenbelt, singles and semis increase from $51,376 to $63,337. Apartment fees rise from $27,615 to $34,103. Those are increases of just over 23 per cent.
The city had previously said that the charges would be going up between 7.3 and 7.8 per cent this October. Now, it wants three to four times that amount and the numbers might get worse. The city is rushing through its new development charges rules to meet a provincial deadline. It still hasn’t completed its transportation and infrastructure master plans. Those are likely to include additional costs.
“There’s no transition clause laid out, so these increases come in virtually overnight,” says Jason Burggraff, executive director of the Greater Ottawa Home Builders’ Association. He says the new fees will even apply to homes that have been sold but haven’t yet received a building permit, adding thousands of dollars in unanticipated costs.
Provincial legislation that forces cities to phase in development charges over five years is about to expire, enabling the city to push charges up sharply.
Burggraff says he also heard on Friday that staff might walk on a lower increase at Wednesday’s meeting, perhaps 15 per cent. What a confusing mess.
Just to be clear, a development charge is not a tax. It’s money the city collects to help cover the capital cost of growth and is based on the principle that growth should pay for itself. Technically, these charges are paid by developers, but don’t kid yourself. The city fees are passed through to buyers and indirectly to renters. At a time when people are struggling to afford accommodation, it’s difficult to understand why the city would increase its charges so much.
Only a forensic accountant could determine whether the higher costs are fair or reasonable, but even a city councillor should know enough to say “Just a minute. How do we get these numbers down?”
The city intended to take in $216 million in development charges this year, but the new charges will inflate that figure. It had planned to finish the year with $184 million in uncommitted money in its development charge reserve. Surely there is some wiggle room there.
There is one other significant thing in the mass of background-study numbers. The city has said it hopes to build 150,000 homes over 10 years, a number suggested by the province. In fact, city politicians have made a “pledge” to do so. Given that, it’s a bit of a surprise to see that the development-charge plan is based on building only 84,457 homes over the decade.
In response to an inquiry, Royce Fu, acting manager, policy planning, explained that development charges must be based on population growth forecasts included in the city’s Official Plan. That’s a provincial rule.
Displaying greater candour than the average politician, Fu said in a statement, “While the city will make every attempt to meet the provincial target, the commitment and availability of other stakeholders and the alignment of other housing considerations are also required to fulfill the target set for the Ottawa market, which are beyond the control of the city.”
So there you have it: A pledge to do more, a plan to do less, and uncertainty over development charges. Well done.
Randall Denley is an Ottawa journalist and author. Contact him at randalldenley1@gmail.com
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Denley: Sharp hike in development charges makes zero sense, Ottawa
17
1
07.05.2024
Technically, these charges are paid by builders, but don’t kid yourself. They'll be passed along to buyers and indirectly to renters — even as people struggle to afford accommodation.
You can save this article by registering for free here. Or sign-in if you have an account.
The City of Ottawa is poised to impose massive development-charge increases on all types of new housing but you’d never know it from reading the report that comes to the planning and housing committee Wednesday.
It fails to mention just how big the increases are, a rather large oversight. To get those numbers, avid readers would have to turn to another report, the 358-page City-wide and Area Specific Development Charges Background Study, which came out in March.
Subscribe now to read the latest news in your city and across Canada.
Subscribe now to read the latest news in your city and across Canada.
Create an account or sign in to continue with your reading experience.
The proposed increases are significant. Development charges on a single-family house or semi inside the Greenbelt will rise from $43,494 to $55,678. That’s a 28 per cent increase. Charges on apartments are up a similar percentage,........
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