Tag Archives: Development Charges

Ontario housing plan

Ontario releases plan to address housing affordability and supply issues

Latest News


Ontario releases plan to address housing affordability and supply issues

Ontario housing plan

The Ontario government has released its plan to address housing supply and affordability, and homebuilders couldn’t be happier.

Steve Clark, minister of municipal affairs and housing today revealed More Homes, More Choice: Ontario’s Housing Supply Action Plan, a full-spectrum suite of legislative changes to increase the supply of housing that is affordable and provide families with more meaningful choices on where to live, work and raise their families.

“We’ve heard loud and clear from families across Ontario that finding housing that is affordable takes too long and costs too much,” says Clark. “After years of neglect by the former government, there is now a housing crisis in Ontario and the dream of ownership is out of reach for too many. Our plan will make it easier to build the right type of homes in the right places, giving Ontarians and their families more flexibility when looking for a home they can afford.”

GTA homebuilders, through the Building Industry and Land Development Association (BILD), applaud the action, calling it an important step to address the barriers to new homeownership and rental housing.

“The challenge is a basic one,” says Dave Wilkes, BILD president and CEO. “Previous government policies and procedures have created structural barriers to the efficient operation of the housing market which has resulted in a generational shortfall of housing. Today, the Ford government has signaled its intent to address this problem to ensure that the right type of housing is built at the right price across the Greater Toronto Area.”

Clark says the plan will require a province-wide effort that includes municipalities, non-profits and private industry and will also be a comprehensive all-of-government initiative that will include legislative amendments to 13 government Acts.

The new measures proposed in More Homes, More Choicewould streamline the overly complex development approvals process to remove unnecessary duplication and barriers, making costs and timelines more predictable. The plan would also streamline and simplify the process for creating new rental housing options.

As part of the action plan, our government is also launching A Place to Grow: Growth Plan for the Greater Golden Horseshoe,to address the needs of the region’s growing population, diversity and local priorities.

“Whether you are a first-time homebuyer, a family looking for a larger apartment to rent or a senior hoping to downsize, our action plan puts people first,” says Clark. “Combined with our government’s investment in renewed community housing, our Housing Supply Action Plan is sending a clear message that no matter what your situation you can count on our government to always put people first.”

Highlights of the plan

Local Planning Appeal Tribunal (LPAT):Changes will be introduced to allow LPAT to make decisions based on the best planning outcome and remove existing restrictions around the introduction of evidence. The number of adjudicators will be increased and case management powers introduced to acknowledge the need to address the backlog/housing supply.

Development Charges: To increase predictability for the industry and consumers around development charges, changes will allow for rates to be locked in at the time of complete site plan or zoning application. There are also provisions that defer DCs for rental buildings until occupancy.

Parkland/S37/Development Charges: A “community benefits authority” is to be introduced that both acknowledges the cumulative effect that taxes, fees and charges have on housing affordability and allows for more certainty and predictability by eliminating “planning by negotiation.” This new benefit will roll together DCs and will have a cap based on property value by municipality.

Red Tape Reductions:To reduce red tape and help streamline approvals, among other actions:

  • Direction will be provided on how municipalities can use the Ontario Heritage Actwhile allowing for compatible changes and creating consistent appeals.
  • The role of Conservation Authorities is to be reviewed to make sure that they go back to their core mandate, which will reduce overlap in approvals and reduce costs by streamlining roles.
  • The Environmental Assessment Actwill be amended to exempt low-risk actions and remove duplications.

“It just takes too long to build new housing in the GTA,” says Wilkes. “This restricts supply and negatively impacts affordability. When you then layer on a disproportionate share of the cost for new infrastructure, parks, and municipal services to new homes, you now have the recipe for what we are currently experiencing.”

The complex regulatory environment, government fees, taxes and charges add as much as 25 per cent to the cost of an average new home in the region, BILD says.

The roposed LPAT changes will have a beneficial impact on supply, BILD says. Currently, there are as many as 1,000 cases, representing almost 100,000 housing units across Ontario waiting for consideration at the LPAT.

The overall focus on reducing red tape and speeding approvals through modifications to the Provincial Policy Statement, The Ontario Heritage Act, The Environmental Assessment Act and many others will enable the industry to unlock housing supply.

“We need more of all types of housing across the GTA – homes for purchase, for rent and social housing,” says Wilkes. “We look forward to working with all levels of government to address housing supply and affordability as the consultation on the proposed changes continues.”

RELATED READING

GTA new home market shows encouraging signs in March

Development in the GTA

GTA builders launch public awareness campaign

 

SHARE  

Featured Products


Toronto fall web

Higher Toronto Development Charges kick in Nov. 1

Latest News


Higher Toronto Development Charges kick in Nov. 1

Toronto fall web

By Wayne Karl

It’s Nov. 1, prospective homebuyers in Toronto, and if you’re looking to buy a new home, the price of your property just went up – thanks to the City’s new Development Charges.

And trust us, homeowners and buyers, the numbers are frightening. Increasingly so.

Just what are Development Charges (DCs)? Those are the fees, levies and other costs municipalities add to development projects. Amounting to tens of thousands of dollars per condo unit or lowrise home, these fees go towards paying for transit and road infrastructure, community services such as parks and recreation and police and fire services, and other items.

And most of those costs, dear homebuyer, are passed on to you. Meaning, they impact the amount of income you have available to pay your mortgage.

Not just that, many believe that new-home buyers end up paying a disproportionate amount for new amenities and services that are enjoyed by the wider community.

Just how much are we talking about here?

(The explanation is kind of complicated and even a bit of an eye-glazer, but stay with us – it’s worth it.)

DCs comprise from 23 to 45 per cent (the largest component) of the government charges on new homes, according to a recent study by Altus Group, commissioned by the Building Industry and Land Development Association (BILD). Since 2004, development charges have increased between 236 and 878 per cent.

  • The average government charges for each new single‐detached home are roughly $186,300, or roughly 21.7 per cent of the average price for a new home. Charges per home range from $120,000 in the Town of Bradford West Gwillimbury to $232,500 in the Town of Oakville.
  • For a new condominium, the average government charges per apartment are approximately $122,800, or roughly 23.9 per cent of the average price for a new condominium apartment. Charges per condominium range from $68,800 in the Town of Bradford West Gwillimbury to $164,500 in the City of Toronto.

RISING HOME PRICES

Further impacting costs for homebuyers is rising home prices, driven by economic and market factors. Over the 2009‐17 period, the average price of lowrise homes in the GTA increased 167 per cent, while for highrise units the figure grew by 80 per cent, according to Altus Group.

DCs by municipality, per single-detached home

  • Town of Ajax/Durham Region: $44,447
  • Town of Oakville/Halton Region: $73,965
  • City of Brampton/Peel Region: $81,825
  • City of Markham/York Region: $82,017
  • Town of Bradford West Gwillimbury/Simcoe County: $34,08
  • City of Toronto: Currently $41,251

For Toronto, the City is in the midst of a DC increase to $80,227 per unit, to take full effect in November 2020. Fifty per cent of the increase takes place in November 2018, and by November 2019 80 per cent of the increase is to be implemented.

Here’s what’s happening for Toronto, select property types, per unit

Property Type                            As of May 1, 2018           Effective Nov. 1, 2018
Singles and semis                              $41,251                                    $60,73
Multiples, 2-plus bedrooms              $34,742                                    $50,528
Condos, 2-plus bedrooms                 $25,366.                                   $36,165
Condos, 1-bedroom & bachelors     $17,644                                    $24,150

So, Torontonians, get used to Nov. 1 being a day not exactly worth celebrating.

RELATED READING

Government should develop a better plan for Development Charges

Understanding Development Charges

Seven steps to housing affordability in Ontario

New residential development brings new amenities to GTA communities

 

SHARE  

Featured Products


cl_nov18_condo_market2_fi

Government should develop a better plan for Development Charges

Latest News


Government should develop a better plan for Development Charges

We read and hear a lot of criticism in the media and from the general public aimed at builders and developers, complaining about the rising prices of new homes and condominiums in Toronto and the Greater Toronto Area. Blaming builders and developers alone is unfair. Our governments that control development charges must accept a big chunk of the responsibility for current housing prices.

In May of this year, Altus Group conducted a study for BILD entitled “Government Charges and Fees on New Homes in the Greater Toronto Area” and found that the average government charges for a new single detached home add up to $186,300, which is 21.7 per cent of the price. Think about it: 21.7 per cent of the price! Development charges for the average highrise apartment in the GTA amount to approximately $122,800, or 23.9 per cent of the average price. No wonder so many people are priced out of the market.

Of course, land prices have soared over the past while, and the costs of everything from trade labour to suppliers, materials, administration, engineering, architecture, advertising, public relations and the numerous other services necessary to bring new home communities to market have jumped as well. Add to that the fact that once a developer purchases a piece of land, it can, and usually does, take years to obtain all of the approvals in order to build on it, and you can see why offering new homes and condos at affordable prices is a challenge. Throughout those years, ongoing rising costs push up home prices even further.

Having said all of that, development charges are necessary. Municipalities levy these amounts on new developments to help cover the capital costs of increasing each area’s infrastructure and services. These include sewers, roads, water, local amenities, emergency services, etc., that benefit everyone. It is one thing to say that new home buyers should pay their fair share; it is quite another to say that the development charges that have increased between 236 to 878 per cent since 2004 are “fair.” Over that same period, average wage increases and inflation have not gone up anywhere near that much.

Remember that every year, the building and development industry creates thousands of jobs and contributes billions of dollars to our local, provincial and national economy. According to BILD, every construction crane you see across the GTA represents up to 500 new jobs in construction and related fields.

Before you blame only builders and developers, take a good look at your municipal government and how it collects and allocates funding through development charges. If you think it is unfair, speak up. You elect your municipal politicians, and they should work for you, not against you. Ask candidates what they might do to fix this unfair situation. And before you play the blame game with builders and developers, do some research and look at home prices in the proper context.

BARBARA LAWLOR is president and CEO of Baker Real Estate Incorporated, winner of the pinnacle 2017 Riley Brethour Award from BILD, and an in-demand columnist and speaker. A member of the Baker team since 1993, she oversees the marketing and sales of condominium developments in the GTA and overseas. Keep current with The Baker Blog at blog.bakerrealestate.com

SHARE  

Featured Products


h_ja18_view_from_inside_fi

Understanding Development Charges

Latest News


Understanding Development Charges

The purchase price of a new home is comprised of many components – a significant portion of which is a tax referred to as Development Charges (DCs).

According to recent Altus Group statistics prepared for the Building Industry and Land Development Association (BILD), Development Charges account for more than 20 per cent of new home prices in the GTA. The average new single-family home includes about $186,000 in DCs. These are one-time fees imposed by municipalities on land developers, homebuilders and institutions when they build within their boundaries.

The idea behind these fees is to help defray the costs to provide the additional infrastructure that is or will be needed to accommodate the increase in population from the new developments.

People typically think of infrastructure as roads and sewers, but Development Charges also go toward a variety of amenities that benefit entire communities.

Development Charges are protected by legislation. In 2016, Bill 73, the Smart Growth for Our Communities Act, came into effect to help ensure predictability and accountability of municipalities, help them fund growth, protect greenspaces and ease the planning/appeals process. These steps were taken to improve on the Development Charges Act that was implemented in Ontario in 1989.

Municipalities conduct studies to determine what services and infrastructure will be required in the future to accommodate growth. Through the mechanism of a bylaw, they have the ability to determine fees that can be used to pay for hard and/or soft services. Hard services include items such as roads, water and waste management. Examples of soft services are libraries, parks and recreation centres. A simple way to think of this system is that growth pays for growth.

The Neighbourhoods of Cardinal Point in Whitchurch-Stouffville.

A good example of how Development Charges are applied is in the growing Midhurst area in the Township of Springwater, Simcoe County, where Geranium has land holdings in the Doran Road and Carson Road communities. The DCs on new homes built here will help with the creation of a comprehensive new parks and recreation master plan offering an exciting array of facilities and amenities. These will include neighbourhood parks, ball diamonds, splash pads, trails, tennis courts, picnic pavilions, a multi-purpose recreation centre with a twin-pad arena, curling rink, community centres and potentially more. In addition, these funds will pave the way for expansion on critical services such as fire and police protection. When delivered, these substantial amenities will result in a higher quality of life for residents of the area, whether current or future.

Municipalities experiencing growth have a limited number of tools at their disposal to raise funds to support the aforementioned hard and soft services. Voters do not like it when their political representatives raise property taxes, so development charges often bear the brunt of costs associated with growth. This explains why they account for 20 per cent of the price of a home in the GTA.

Families buying a new home are often drawn to it because of the surrounding neighbourhood and the opportunities to enjoy parks and trails, recreation facilities and community centres. These amenities are provided, repaired and maintained partly as the result of Development Charges.

Shauna Dudding is senior vice-president, development for Geranium. Since 1977, the company has built more than 8,000 homes throughout Ontario. Geranium.com

RELATED READING:

In His Own Words: Paying More Than Our Fair Share

 

SHARE  

Featured Products