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Prospective growth fees causes concern for new homebuyers

Sage Creek and other new neighbourhoods could see a dip in demand for new home builds. Adrian Cheung/Global News

WINNIPEG — The implementation of growth fees for 2017 has proven to be hotly-contested and controversial at city hall, as home developers have spoken out against Mayor Brian Bowman’s plan to cover the cost of growth.

The latest city report was unveiled on Friday; renamed the prospective fees to be “impact fees” and could be put in place as soon as January 1, 2017, pending votes from the executive policy committee (EPC) and city council.

“Our obligation as council is to move this city forward, position it for growth,” Bowman detailed on Friday.

“Debating this and delaying just for the sake of delay is not on my agenda.”

READ MORE: Growth fees could be in place by January 1

The report also detailed the potential costs for new homeowners – an 1,800 square foot home could cost an additional $18,360, if the fees come to fruition. That price tag has become a point of concern for buyers in the market for a new home in one of the city’s developing neighbourhoods like Sage Creek.

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Dayanitha Jayakody and her husband were visiting show homes in Sage Creek on Saturday and admitted the growth fees are top of mind for them and other friends who are considering new homes.

Real estate brokers say there is greater demand for existing homes as buyers seek to avoid growth fees. Adrian Cheung/Global News

“Eventually it’ll be us, we’ll be footing the bill. So, a huge concern for us,” Jayakody said.

“It all depends on how much you’re willing to pay. If your budget is around $400,000, it’s a huge deal. If it’s over a million dollars, [growth fees] will be a drop in the bucket.”
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While details of implementation are still to be determined, the costs will largely be passed onto new homebuyers. Those who have already purchased a home in developing neighbourhoods, such as Marc Eger, said he believes the growth fees will slow down production of homes.

“[Growth fees] will make this area less desirable. That’d be true for any new build around the city,” Eger said.

He added that he believes this could also drive buyers to rural areas such as Stonewall and Niverville, in an effort to avoid paying possible growth fees.

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Real estate broker Michael Froese said he has already known of clients in the market hurrying to finish signing the deal in an effort to beat out the 2017 deadline.

“Some customers, again, want to put the pen to paper a little quicker to get ahead.”

Froese said while he did not expect an immediate dip in demand in the market for new build homes, he said increasingly, those buyers who would have opted for a new build, are looking into the re-sale market within the same neighbourhoods.

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“If there’s a home for sale that’s one to two years old that has that owner in it already – and they’re selling – they’re not going to face any growth fees.”

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