The
County of Haliburton will be commissioning a study looking at the
institution of development charges, and it’s probably time.  

 

Development
charges are fees imposed by municipal governments on land developers,
homebuilders and institutions when they build on an area of land. They
would be paid at the time a building permit is issued. Those funds are
then earmarked for specific, growth-related purposes. New development
means an increase in population, and ongoing increases in population
create more demand for facilities and services. That could mean a new
park, or a new fire hall. The legislation guiding development charges is
fairly specific in what they can be used for, and includes a
requirement that a service must incur increased capital costs as a
result of new development. 

 

In
the case of the upper tier of the County of Haliburton, this applies to
many of the services it provides – think roads, libraries, EMS. Under
the legislation, the county’s lower-tier governments, should they wish,
could create their own development charges bylaws. 

 

Development
charges are bound to be unpopular with some in the community –
builders, of course, come immediately to mind. It’s also possible that
realtors may not be huge fans of the concept, or anyone building a new
home, for that matter. With development charges becoming more and more
widespread in municipalities throughout Ontario, it is possible that the
county’s lack of them has been attractive to developers who’ve built in
the community in recent years. 

 

However,
according to the Association of Municipalities of Ontario, development
charges, which would apply only to new homes, make up a relatively small
portion of the cost of a new house – typically between five and seven
per cent. 

 

The
provincial government is conducting consultations aimed at increasing
the housing supply in Ontario, and development charges have been
identified as one of a number of potential barriers to home ownership.
However, according to the AMO, “development charges are not a root cause
of the affordable housing and supply challenge in Ontario.” 

 

Further, the AMO contends reductions in development charges would not necessarily correlate to lower housing prices. 

 

“In
addition, experience has taught that [development charge] reductions
are not passed on to the home buyer,” reads an January 2019 submission
from the AMO regarding the provincial consultation. “For example, Ottawa
experimented with offering [development charge] concessions in a
specific area. The concessions offered did not lower the price of
housing compared to other areas in the city. In the GTA, on the border
of two municipalities, with different development charge programs, the
municipality with three lower [development charges] in fact has higher
housing prices.” 

 

Municipalities
are restricted in their revenue-generating tools, the main vehicle
being the property tax. As the county’s population continues to grow,
and as new spending pressures become evident – the county’s land
ambulance costs are about to increase substantially due to a provincial
merger of ambulance services, for example – the introduction of
development charges could help reduce the burden on the general tax
base.