This week at city council was all about the development charges. First, council heard the story of D.C.s, what they pay for and why they’re collected, and then they looked to the future. The DC Background Study, the means by which the new DCs are determined, got thrown a curveball with all the recent legislative changes, but the work still got done and the second part of this week’s meeting was the direct result of that. Here’s the recap…
Workshop Meeting of City Council – July 19
Before digging into the latest background study on Development Charges, city council got a little background of their own on DCs. If you’re not sure what Development Charges are, the City of Guelph produced this easy-to-understand video:
Kevin Yaraskavitch, Senior Corporate Analyst for the City, walked council through a 40-minute presentation about what DCs are, what they cover, and the complicated series of considerations that lead to how DCs are calculated. Council, when it was their turn, started to jump ahead to the next meeting, which meant that they wanted to talk about the implications of Provincial changes like Bill 23.
When asked about the elimination of housing services from the list of DC eligible services, which the City presently wasn’t doing anyway, Watson and Associations Managing Partner Gary Scandlan said that the move will mean 42,000 units of social housing will *not* get built in Ontario. Scandlan also observed that there are a number of definitions and regulations still missing from the legislative changes, and that the Ontario government is treating the increased population like a “windfall” that will compensate for the loss of DC revenue.
Even Mayor Cam Guthrie was noting that a lot of council questions should be reserved for the realm of the next meeting, but before this one was over, Scandlan warned that the savings on the developer side with these new exemptions to fees are unlikely to be passed down to the homebuyer, because they never are.
Special Meeting of City Council – July 19
The current DC bylaw expires on March 2, 2024. Council will need to pass a new DC Bylaw in order to keep collecting those fees on March 3, but before a new bylaw can be passed, a background study must be completed, and this meeting was to present the work done so far.
(Incidentally, you can now take part in the work around Development Charges update by going to the City’s Have Your Say page.)
Scandlan led the presentation and went over how Development Charges have changed over the decades, and how they’ve change rapidly over the last decade. In terms of the most recent update, he notes that municipalities are still waiting for definitions and regulations for “affordable rental unit”, “affordable owned unit” and “attainable unit”, which are kind of important considering that the update DC Act allow for exemptions for those things.
So what are we looking at for the new rate? Right now, it’s $68,902 for a single and semi-detached dwelling, which is an increase from $47,839 for the same type of development right now. The calculation will put Guelph somewhere in the middle of the pack went it comes to many of Ontario’s municipalities, but there are a couple of caveats to keep in mind.
First, Guelph is the one of the first municipalities to do this DC review work in the post-Bill 23 environment, and Scandlan said that it’s his expectation that many, if not all, municipalities will also see DC rates going up. Second, the new DC calculation is based on the goal of just over 12,000 units by 2031, which you may note is less than the 18,000 pledge that the City of Guelph signed to the Province earlier this year.
Basing the new number of the 12,000 units threshold was a concern to council. Scandlan, and later staff, noted that redoing all this work to account for the new target would take too much time, especially when accounting for the change could simply mean taking the 10-year capital plan and doing it in six. Council were also concerned about the impact on property taxes when DCs can’t cover growth like they should, and there was also some concern about how to ensure affordable units stay affordable once developers get their exemptions.
Additionally, council talked about using bedrooms, square feet and housing types as determinants for how DCs are charged; specifically, should a McMansion and a typical detached family house be weighed the same? Staff took note of these queries and will bring answers back later this year.
Next steps: Have Your Say is collecting feedback, and a final report will be released in October ahead of the Statutory Public Meeting that month. The final bylaw will be brought to council for approval in January.
Click here to see the complete recap of the meeting.
Guelph Politico 