Development Charges (DCs) are fees imposed by municipalities to increase revenue and pay for infrastructure services. Infrastructure includes roads, sewers, water, wastewater and other services that a homeowner expects. They are imposed on private owners and developers, whether you are severing land to provide your son or daughter a lot to build a home, a developer building a series of homes, or a business person looking to build a business and hire local residents to produce goods and services.
At a public meeting held March 6th, Madawaska Valley (MV) residents had the opportunity to express their views to Council on the prospect of bringing back DCs, abolished in January 2018 by a previous Council. Despite the prospects of MV now considering the reuse of this revenue tool to offset potential property tax increases (due to capital costs associated with population growth), participants at the meeting were vehemently against the prospect of Development Charges (DCs). In almost all cases presented, individuals hoped to start building in 2023 or were in the process of severing land for their children to build in the future or develop attainable housing for seniors and first-time homebuyers.
The case for and against DCs
Originally, DCs were fees levied by municipalities so that developers would help pay for infrastructure costs associated with new development. Their use has expanded to include other development including single homes. The positives of such fees are that they help to ensure that growth pays for itself and that they can help reduce the burden on existing taxpayers. Typically, they have been implemented in high growth areas (greenfield suburban or commercial developments) where significant new infrastructure is required. The proposed King’s Landing development on the former Trader farm across from the hospital is an example, which brings us to the negatives of DCs.
The negatives of DCs, however, are that they increase the cost of new housing and that they can be a deterrent to growth. As Mark Wilson stated on behalf of the Kings Landing Community proposal, “The added cost of Development Charges at this stage is difficult and perhaps impossible to absorb.” King’s Landing would face an estimated $930,000 in DCs based on the background study by Watson and Associates, which may make it untenable for a developer to proceed with the project. The plans submitted were to “create a seniors-oriented lifestyle community offering a variety of housing and ownership options at the most affordable price possible.”
The planned growth over the next ten years in the Madawaska Valley does not qualify as rapid growth. It is shockingly low, with projections for 195 units (family dwellings) and 78,400 square feet of non-residential gross floor area. That represents fewer than 20 family homes built per year while on the commercial side very little in economic development. To put commercial development in perspective, the newly expanded St. Francis Herb farm facility occupies 33,000 square feet.
The proposed DCs will certainly add to the cost of building a house in the Township of Madawaska Valley. The study by Watson and Associates suggests that the fee would add $10,000 to $12,000 for a single family dwelling. The proposed DCs will make it more difficult for young families to purchase or build a house in the municipality. Yet many of these homes would likely be infill, meaning that services already exist, or they would be rural where the homeowner would likely be responsible for their own services such as septic, well, and waste disposal at little or no cost to the Township. In other instances it might be seasonal cottagers retiring and building again – where again they would be responsible to provision the same services. What vision does this Township have to support attainable housing and first-time home buyers or seniors? The presenters heard that “Council was listening;” however, our Mayor is on record that based on his previous municipal experience the implementation of DCs should be considered.
Province eliminating DCs
So, what is the rest of the province doing to support growth? The Ontario government’s latest legislation, Bill 23, More Homes Built Faster, has a target of 1.5 million homes being built over the next five years, with elimination of DCs (where DCs are already in place with municipalities, the funding model is to reimburse lost revenue, keeping the municipality ‘whole’). The Ontario government has also introduced legislation whereby a homeowner can add an additional two dwellings on their property (providing none exists today) if the square footage of both does not exceed the square footage of the primary dwelling. What support is this Township providing to assist residents in realizing the benefits of Bill 23, to ease our housing crisis and provide attainable housing?
The province is also investing $400 million in critical infrastructure for small, rural and northern communities in 2023 through the Ontario Community Infrastructure Fund (OCIF) and will support economic growth and job creation in 425 communities across Ontario. The Ontario Trillium Foundation’s Community Building Fund has provided $92 million in operating and capital grants to support 834 community organizations, municipalities, Indigenous communities and non-profit tourism, culture, sport and recreation organizations across the province. Is our Township focused on its share for growth? Are we, as a Township, embracing change? What do you, the reader, think?
The Ontario governments plan(s) is part of a long-term strategy to increase housing supply and provide attainable housing options with initiatives to increase the supply of rental housing, and reduce the bureaucratic that delays construction and pushes home prices even higher. The province’s commitment to supporting municipalities remains focused on improving planning policies and cutting red tape to get homes built faster. How is MV Council embracing the prospects of growth to ease the housing crisis and support attainable housing initiatives?
Will MV ignore the trend?
You have to wonder why our Council is looking at DCs as a revenue generating tool when the rest of the province is heading in the opposite direction. Where is the leadership and vision to support attainable housing and economic development? How much employment would the Kings Landing Community proposal bring this community with shovels in the ground? How much in ancillary services would be required afterwards? What would the benefit be to our retailers? How would our arts community and Library benefit from growth? How much employment would be created by building single family homes? What increase would the Township receive in taxes? For example, the tax revenue for King’s Landing is estimated at $1.25 million over ten years, while building 20 homes per year would generate an estimated additional $1.482 million, totally an increase to the tax base of $2.732 million.
If this is the thinking of “Real Experience,” then there is a substantial risk that our community will stagnate and be a place for seniors with few prospects for our younger generation. MV already has one of the highest percentage of seniors of any municipality in the province.
Will this Council align with the province and support people to make it easier to live, grow and prosper in our beautiful Township? Shortchanging our residents is no way to build a community where people want to live. You might not think that this issue affects you; however, there are only two choices, increase taxes or promote growth to widen the tax base. What are your thoughts? The residents who took the time either to attend the meeting and speak, or to add their 320 names to the petition presented at it, were unanimous against DCs. Will Council listen to the voice of the people?
About the author: Prior to returning to Barry’s Bay where he grew up, Roger Prince enjoyed a 35-year career in leadership and executive roles with technology and software companies. His support of government agencies and municipalities throughout North America and abroad gave him a deep understanding of successful attributes for effective leaders in this space. As a Founder and President of 100 Men Who Care and Board Member with Durham Hospice and Advisor Board member with one of IBM’S Think tanks, Roger has always looked for ways to give back to his community.