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Soaring development charges may push the price of housing in the Toronto area out of reach of many families, the building industry said yesterday as it fired its opening shot in what promises to be a summer-long battle over the fees.
The increases in charges over the past seven years are "excessive, unsustainable, and counterproductive," Michael Moldenhauer, the president of the Building and Industry Land Development Association, told a news conference yesterday.
Development charges are fees that municipalities impose on new projects to pay for the capital costs of infrastructure, such as roads, sewers and schools, directly resulting from new growth.
Under provincial law, municipalities set a new development-charge schedule every five years, and during the period they are in force, they are changed only to allow for inflation, usually as measured by an index of construction costs.
According to a BILD-sponsored study, the average development charge on a new single-family home in the GTA is about $30,000, and in 2008, charges were 75.1 per cent higher than they were in 2001, even though the cost of a new home rose by only 26.6 per cent over the same period.
With the next set of rates slated to come into force on Jan. 1, 2009, municipal councils are considering their fee schedules for the next five years, and it appears the industry could be hit with fees that are double current levels.
For instance, rapidly growing Halton Region has proposed a charge of $25,452 for a single-family house in urban areas, nearly double its current fee of $13,982. And that does not cover the charge from local municipalities, such as Milton or Oakville, or the development charge for educational purposes.
Within the next two weeks, Toronto - where the charges are lowest in the GTA, ranging from $11,524 for a single-family dwelling down to $4,909 for a one-bedroom apartment - will publish the study on which it will base its new development-charge schedule.
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