CHBA continues fight against rising development charges
Matthew Desrosiers NHBA Structures Editor
While the form and structure of DCs are an issue for new new capital projects,” said Laberge. “They may actually dip
home builders, of equal or greater concern is the rate at into the reserve funds established to hold the money, and
The Canadian Home Builders Association’s (CHBA) which such charges are increasing. may end up not using it for the planned infrastructure that
Urban Council recently met in Ottawa to discuss a range of “Development charges have been ramping up, typically was intended.”
issues affecting the industry, including the continued rise of at a rate much higher than inflation,” said Laberge. “Of “There’s a concern about the overall accountability, man-
development charges (DCs) across Canada. course, they all have to be passed on to the new home buyer agement, and reporting on development charges.”
“Development charges of various kinds and under dif- or the renter, so the situation is that if development charges If housing prices are going to be pushed up by DCs for
ferent names are intended to help municipalities install in- are going up, then the home builders are worried about the new home buyers, developers want to know that the money
frastructure leading up to the edge of new development,” impacts on housing affordability.” is going where it is supposed to: installing infrastructure to
said Vince Laberge, chair of the Urban Council. “They are New home buyers typically have mortgages that include serve those home buyers.
for hard services that are not in a subdivision or on the site the costs of development charges, so they will be paying At its recent meeting, the Urban Council agreed that the
of a new building. An example would be an expanded arte- higher mortgages, as well. In effect, significant long-term most appropriate instrument for building new infrastructure
rial road leading to a new development.” costs of infrastructure investment that should be paid by the is debt financing, in which the overall population is charged
Laberge noted that while municipalities often say that property taxes are being borne by new home buyers through for the costs and those who benefit also pay.
“growth must pay for itself”, DCs inevitably provide infra- their mortgages. “Whether it’s debt financing by a municipal utility, or
structure and associated services used by the entire com- In 2007, a comprehensive report was prepared for the debt financing by the municipality as a whole, that’s the
munity as opposed to just new residential developments. Canada Mortgage and Housing Corporation (CMHC) on more appropriate way to charge people as they use a partic-
The CHBA’s position is that it is not fair to charge only new government imposed charges for new homes in major urban ular facility, compared to development charges being con-
home buyers – a small portion of the population – for some- centres across Canada. It may come as little surprise that stantly increased and adversely affecting a minority of
thing everyone uses. He said there is no direct link in most Toronto topped the list for overall charges paid, in munici- people.”
jurisdictions between the development charges and actual pal, provincial and federal government-imposed charges. The CHBA Urban Council meets three times a year and
costs of specific infrastructure installed. There is a general, For the average single detached dwelling in Toronto, home- consists of the presidents or representatives from the 12
flat fee that is charged per unit. buyers were paying an additional $101,526 in charges. For largest associations within the CHBA, including Toronto,
“Development charges are effectively a kind of tax levied the average single detached dwelling in Ottawa, homebuy- Vancouver, Edmonton, Calgary, Regina, Saskatoon, Win-
on the minority of the population.” Laberge added. “Raising ers were paying $54,334 for all these taxes, fees, levies and nipeg, Ottawa, Waterloo, London, Hamilton, and Halifax.
these amounts can have the net effect of enabling munici- charges. Their three priorities are securing additional federal infra-
palities to avoid raising their overall property taxes, which The report takes a closer look at the categories for each structure investment, combating higher taxes, fees, levies
should be covering the costs of hard services used by the charge. Ontario has five of the six highest municipalities in and charges on new home buyers, and promoting the resi-
whole community.” terms of DCs: Hamilton, Waterloo, Mississauga, Vaughan, dential construction sector as a key part of overall urban
Laberge also noted that DCs are only one of the multiple and Ottawa. For DCs, Vaughan topped the list with $28,825. growth. It’s a $100 billion industry every year, Laberge said.
taxes, fees, levies and charges that impact homebuyers and Ottawa charges were $21,652. Each meeting, the Urban Council has guest speakers on
renters. These range from provincial sales tax and federal Laberge said that historically, there has been a tendency one or more of their priorities. At their latest meeting, they
GST, to fees for specific development approvals and build- to add more and more capital items to development charges. had Dr. Marion Steele from the University of Guelph speak
ing permits. These all get stacked onto the costs of building The CHBA also notes that in a number of cases, ac- on the effects of development charges on housing afford-
a home and can amount to a substantial portion of the total counting for development charges is loose, leading to the ability and choice. She confirmed that these are always
house price. “Obviously, that has an impact on who is able likelihood that the money will not go where it is supposed passed on to new home buyers according to her economic
to buy a home of their own,” he said. “First-time buyers are to. “Unfortunately, there is a problem that municipalities research.
often the most adversely affected.” need to bank development charges prior to using them for Related to development charges and other issues, the
Urban Council assembles and recommends to the CHBA
Board of Directors “information tool kits” for the member-
Awards of Excellence
ship, helping them raise the priority issues with provincial
and municipal governments.
recognizing excellence and professionalism
in the Residential Building Industry!
Building Relationships
December 2nd – Christmas Dinner & Elimination Draw
Call for Entries
Club Roma, St. Catharines 5:30 p.m.
CORPORATE SPONSORS: Cogeco, TD Commercial
Banking, Regional Doors & Hardware, Dell Smart Home
Solutions, Dufferin Concrete
Putting everyone in the Christmas Spirit, this traditional
event held on the first Tuesday evening in December at Club
Roma, has been in place for over 30 years! Guests attending
the dinner bring gifts for a teen (12-20 yrs) in support of Big
Brothers/Big Sisters office for distribution throughout the
Niagara Community.
Beginning with a delicious Club Roma Christmas Din-
ner, the evening comes together with the spectacular array
of fabulous prizes generously donated by the membership.
Sponsorship
We extend our sincere thank you to the member company’s
for the prize and cash donations, as well as allowing com-
mittee members to donate their time in organizing the event.
This must-attend event is a fantastic time to catch up with
friends and reflecting back on a wonderful year.
UPCOMING EVENTS:
Awards of Excellence Gala
February 10 – Breakfast Education Meeting – TBA
March 10 – Members Dinner Meeting – TBA
Friday April 3, 2009
April 3 – Awards of Excellence Gala – John
John Michael’s Banquet & Conference Centre, Thorold
Michael’s Banquet and Conference Centre, Thorold
May 12 – President’s BBQ Dinner Meeting – TBA
A4 - NHBA Structures December 2008
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16