Hamilton mayor says end of development charges on housing builds could be problematic

WATCH: On Tuesday, the Progressive Conservative government introduced legislation to freeze and reduce charges levied against developers in order to spur new home construction, including rentals and affordable housing. Colin D’Mello reports.

Hamilton’s new mayor says Ontario’s hurried bid to meet the target of building 1.5 million homes in 10 years could be “problematic” for taxpayers who will potentially have to compensate for development discounts in new legislation.

Andrea Horwath told 900 CHML’s Good Morning Hamilton that necessary infrastructure costs amid new housing appear to be headed toward the city’s existing residents, since developers will not be saddled with those costs as they have been for decades.

“It will land on the property taxpayer, it will land on everyday Hamiltonians to pay for that price of development,” Horwath explained.

“There are other parts of that legislation that’s problematic as well, but certainly the financial hit is really, really problematic.”

In late October, the province identified 29 municipalities in which the bulk of new housing will need to be built in order to reach their new goal, with Hamilton one of the cities.

The legislation allows up to three residential units — such as basement apartments and garden houses — on one lot without needing bylaw amendments.

Those new units would also be exempt from development charges, one of several fees housing minister Steve Clark told Global News “stifles affordable and attainable housing.”

He went on to say the motive was to incite more rental and provide a “sliding scale of discounts” in development charges up to 25 per cent for family size rental.

“Fees and government charges are a significant portion of the cost of housing, adding up to nearly $200,000 per unit,” Clark told 900 CHML’s Hamilton Today.

“So we wanted to ensure that those … non-profits are exempt from things like development charges, parkland dedication, community benefits charge.”

Toronto’s mayor echoed Horwath’s concerns during an affordable housing development reveal in East York Nov. 10, suggesting the lack of development charges could be “devastating” for the city’s finances.

“If they wanted to say … ‘we’ll finance that and fill in the gap because we believe that’s the best tool to incentivize the building of rental housing,’ you wouldn’t hear me complaining for a second about that,” said Tory.

“I will just tell you, the $200-million impact that would have on our finances would be devastating to our capital budget going forward.”

Colin Best, The Association of Municipalities of Ontario (AMO) president, says Ontario’s cities simply don’t have that kind of tax base to fund roads, bridges, waterways, parks and schools without the development fees.

“We need those development charges to pay for it because existing taxpayers are telling us that inflation’s already cutting into their groceries and gas and other things and they can’t afford them double-digit increases,” Best said.

Jim Dunn, director of the Canadian Housing Evidence Collaborative (CHEC) and urban geography professor at McMaster University, characterized the waiving of the charges as a “huge” piece to the province’s puzzle particularly with affordable housing projects.

“What I hope is the government will have some funding behind that as well, because that’s going to put a bit of a hole in the budgets of municipalities because they certainly depend on development charges,” Dunn explained.

Clark told the legislature on late October he hoped the federal government would provide assistance through a $4-billion Housing Accelerator Fund and perhaps an estimated $8-billion in funds from development charges already collected.

“On the issue of the charges, we have to get those baseline costs down so that we have more affordable housing and more attainable housing,” said Clark.

Horwath says the topic will likely be part of the city’s capital budget conversations this week, particularly suggesting the city’s “not even holding our own” when it comes to the state of existing infrastructure.

She expects some “pushback” on Queens Park by the big city mayors to starts some sort of slowdown and begin further engagement on the matter.

“They can’t just push this down on us and not expect us to … say something about it … to do our jobs, which is to protect the interests of the people of Hamilton or the people of the various business municipalities in the province,” said Horwath.

© 2022 Global News, a division of Corus Entertainment Inc.

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