Caps on parkland fees should still be a priority
The Ontario government recently introduced changes that will adjust the way development pays for the infrastructure, facilities and services required to support growth. The changes, the result of extensive consultation, are good news for municipalities, builders and ultimately homebuyers, but they underscore the challenges of producing one-size fits-all housing policy for a province as diverse as Ontario. As an example, while the province chose to leave the way municipalities fund new parks essentially unchanged, BILD will continue to advocate at the municipal level for caps on parkland fees.
Currently, municipalities can require that each new development contribute land for a park, or pay a fee in lieu, to be used to purchase parkland. Our industry believes that parks are vital parts of any vibrant and complete community, but we have concerns about the cash in lieu (CIL) of land that some municipalities opt to collect. Our concerns are threefold.
First, as CIL rates are linked to the value of the land, collection of parkland charges can act as a disincentive to density. This is especially true with high rise buildings in downtown areas across the GTA, where it is not unusual for a one bedroom condominium to attract double or more in parkland fees compared to a single-family home.
Second, many municipalities have a record of collecting far more in parkland fees than they spend on new parks. A study conducted by Altus Group in 2018 found that GTA municipalities had accumulated $1.13 billion in parkland cash reserves. This means that new-home buyers are paying for new parks as part of the cost of their new homes, but not necessarily receiving them.
Lastly, with infill development in existing neighbourhoods, parks are generally already in place, which leads us to wonder what new-home buyers are paying for with their parkland fees.
While the changes introduced by the province allow municipalities to set alternative parkland dedication rates and allow municipal parkland dedication bylaws to be appealed, it is still important to have a maximum cap for parkland rates in certain GTA municipalities so that new-home buyers are not asked to pay more than their fair share.
The changes introduced by the provincial government are a very positive step in addressing the housing supply and affordability challenge in the GTA. They provide builders with greater clarity and certainty about costs and allow municipalities to recover 100 per cent of costs for facilities such as daycare centres, long-term care homes, playgrounds and libraries. BILD’s advocacy with certain municipalities on parkland fees is meant to ensure that the way we fund parks does not add unnecessary costs for new-home buyers and erode affordability.
Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD), the voice of the homebuilding, land development and professional renovation industry in the GTA. For the latest industry news and new home data, follow BILD on Twitter, @bildgta or visit bildgta.ca.