Development charges are tricky, and I have no idea if we should raise them, lower them, or abolish them. I just wanted to put that out there right off the start, because I know my readers are accustomed to me coming in hot with a very clearly defined angle.
This week, not so much. I got no idea what I’m talking about, but that won’t stop me from banging out 600 words on the subject, so let’s see where this takes us, shall we.
Alrighty, so: development charges. I saw a story that said Pelham was on the verge of jacking up its development charges to a rate that would put it among the top of the pile in Niagara. Is this a good thing? That’s what I asked myself, before coming to the aforementioned conclusion: I have no bloody idea.
And that’s speaking as someone who has filed dozens upon dozens of newspaper stories about development charges over the past decade.
When I first started at the newspaper back in 2011, I wrote all kinds of stories about various Niagara municipalities reducing their development charges, in order to “incentivize” more building projects and “stimulate” growth. After that, a few even did away with development charges entirely. But then came the housing boom.
Suddenly there was no more need to “incentivize” development because housing projects were popping up as fast as the planning departments could spit out approvals. So things swung back the other way. Development charges were not only back, but they went up and up and up.
And here’s where things get complicated, at least from my perspective as both a homeowner who pays property taxes, and someone who wants the next generation to also have the opportunity to be home-owning taxpayers.
On one side (the side that pays my property taxes) I want there to be robust development charges because they help offset the cost of new neighbourhoods by paying for things that would otherwise get dumped on the property tax levy.
The answer is, as with most problems, corporate greed
On the other side (the side that wants to see Gen Z be able to afford a home) I want there to be minimal development charges because they contribute to the affordability problem.
But how are development charges contributing to the affordability crisis, you may ask? Good question, to which I’ll say the answer is, as with most problems, corporate greed.
There’s an old adage that says “developers should pay for development” which is a good idea, but also not true. The idea that development charges help pay for development is also a good idea, but it’s also just not true.
Let’s say you're a homebuilder in Pelham. You build a home and sell it. Now let’s say Pelham Town Council increases its development charges.
Now when you build a home you’re paying an extra, let’s say, $30,000 in development charges. Are you, as a homebuilder, going to just eat those extra charges? Of course not. You’re going to take that extra $30,000 and pass it on to the homebuyer.
So it’s not really that “developers pay for development” it’s “new homebuyers pay for development.”
Which is at least better than existing homeowners shouldering the burden, but it’s certainly not ideal. And sure, city hall gets a cut now, but what are they even going to do with all that sweet, sweet development charge money?
The provincial Development Charges Act hems municipalities in pretty tight when it comes to what exactly the money can be used for (pipes and sidewalks in new subdivisions, that sort of thing) but there seems to be just enough wiggle room that it could also be spent on things we don’t really need, like a gender-neutral dog park or new pickleball courts.
What’s the answer then? Raise development charges so that homes get more expensive? Or keep them low and force local taxpayers to cough up more cash to pay for new subdivisions that will be filled with Toronto expats?
I don’t know. I have no idea and I don’t even have a clever quip to close things out. I did warn you that this week was going to be a dud.
James Culic will try to do better next week. Find out how to yell at him at the bottom of the page, or develop your own charged letter to the editor.
