An Ontario city is lowering the fees it charges developers to build new housing “dramatically,” in a move local and provincial politicians hope will help to boost the number of homes built.
Vaughan, located directly north of Toronto, announced the move this week, lowering development charges for all new homes back to their 2018 rates — and keeping them at that rate for at least the next five years.
The move means developers will pay the city less to build. Homebuilders have long asked for a reduction in the fees they pay, claiming the charges levelled by municipalities to pay for infrastructure and local amenities are prohibitively high.
Vaughan Mayor Steven Del Duca appears to agree.
“Development charges have become an unfair tax burden on homebuyers,” he said in a statement announcing the development charge drop.
“Too many of our residents, in particular young families in our community, have seen their dream of buying a home close to where they grew up disappear completely as housing prices have spiraled out of control. We have a housing affordability crisis and it’s time for us to get real about the solutions needed to solve it.”
The move was praised by the Building Industry and Land Development Association, a developer lobby group, which has been calling for an overhaul of the fees its members pay.
“This will enhance the financial viability of future projects, unlocking potential investment and stimulating supply,” BILD president Dave Wilkes said in a statement.
The fee drop for builders comes as towns and cities province-wide struggle to get housing projects off the ground, leaving the Ford government’s plan to build 1.5 million new homes by 2031 in danger of failure.
Recently, the Financial Accountability Officer of Ontario found housing starts were down 17 per cent year-on-year over the summer, with development of single-family homes heading for a 69-year low.
That followed equally disappointing projections in the government’s Fall Economic Statement predicting the province would fail its annual housing goals every year until at least 2027.
Ontario Housing Minister Paul Calandra told Global News Vaughan was making the right decision by cutting development charges.
“It’s a really great first step for Vaughan, it had some of the highest – if not the highest — DCs in the country,” he said.
“They will start to see the fruits of this — it will start to pay off for them.”
Ontario NDP Leader Marit Stiles, whose party recently unveiled its vision of a new deal for municipalities, said the decision to cut development charges had been brought on by provincial neglect.
“We hear from developers certainly that development charges remain a concern,” she said.
“I think cities are trying to come up with solutions to get building happening and what’s missing here is the province. The province is not at the table with solutions and housing starts are down… we’ve never seen anything like this.”