BILD Releases New Study on Development Charges
By Lucas on Jun 13, 2013
There are many costs associated with developing a new building, and those costs affect affordability. One major cost for developers and builders that we’ve touched upon before is development charges.
Development charges vary from building to building. The government charges the builder per unit type, and that money is supposed to go towards creating the proper infrastructure in a certain area to support the amount of new residents that will soon be living there.
BILD’s Development Charges Study
Recently, the Building Industry and Land Development Association (BILD) released its new findings on development charges, and the costs and issues that developers face when developing new homes in the Greater Toronto Area.
“Right now, municipalities across the GTA are looking at how they are going to pay for critical infrastructure that will be used by not only new residents, but existing ones as well,” said Bryan Tuckey, President and CEO of BILD. “Increasing development charges and other government fees is not the answer. New homebuyers across the GTA are already doing their fair share to support the development of essential public infrastructure.”
Over $1 billion in infrastructure costs
The study measures the impact that development charges have on each region, and how homebuilders have been contributing. The study broke down the fees within six municipalities: The Town of Oakville, City of Brampton, City of Markham, Town of Bradford-West Gwillimbury, Town of Ajax, and the City of Toronto.
The report estimates that in 2012, the new home development industry contributed more than $1 billion towards infrastructure, creating roads, sewers, transit, and much more.
Oakville Mayor Rob Burton comments
“There is still huge headroom in the market price of new homes for us to be collecting the cost of growth from developers,” said Burton, adding that he’d like to see development charges cover 100 per cent of the cost of new roads, sewers, and community centres needed for new subdivisions. Burton goes on to point out that provincial legislation limits what local governments recoup from developers.
It certainly is an interesting discussion. What limits should we put on development charges? Who should pay for infrastructure that everyone, not only new home purchasers, will use? How does affordability fit in? We look forward to seeing where this study takes the new home industry.
