An Interesting Perspective

Anonymous has left a new comment on your post "The Toronto Star Said":
It would be interesting to know what percentage of a new home's selling price development charges represent and whether this percentage has been increasing over the past, let's say, 40 years.

Developers/builders are in the business to make a profit. Is this profit excessive or in line with those of the past 40 years, expressed as a percentage of a new home's selling price?

Any business investment is made on the basis of the anticipated percentage return on capital. If this percentage is less than warranted by the risk then the investment will not be made.

Politicians at the municipal level are responsible for providing and administering services to its residents. These can vary widely; there is no magical formula.

These services are provided for the lifetime of the municipality and when things such as roads, sewers and water facilities start to age and require major repair or replacement, the costs for these must be borne by the municipality, namely the taxpayers.

We have been fortunate in that our municipalities have managed to avoid the rot that has occurred in many large American cities. Most of us have seen photos or film footage of abandoned homes and factories, falling into disrepair and crumbling, a magnet for crime and criminals.

What we have to recognize is that traditional housing, single or semi-detached, is a luxury that we can no longer afford. The only way to accommodate a projected explosion in population is with relatively high-rise buildings. This will reduce future required increases in development charges and will avoid filling our communities from boarder to boarder with asphalt and concrete. We might be able to manage a park or two.

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Taking the last point first. There appears to be no slowdown  in housing sales, no matter how high the price. 
Value of a property is what the buyer is willing to pay.
Children are being raised in institutions. 
I can't tell you how profits have grown.
I have a sense of  how taxes and cost of processing development plans have skyrocketed.
When lot levies started, the figure was  $250. The number wasn't based on anything in particular. It was new-found money.
When Regional government was created, regulations started  in earnest. 
Planning departments were created.Two. One at each level.
New procedures were generated.Constraints established.
Process time grew. 
Money invested in land took longer to realise return and cost more. Like ten or fifteen years and hundreds of thousands of dollars. 
Builders stopped buying land and bought development plans instead.  
Land speculators had to make their money before a single permit was issued. 
Builders are not philanthropists. They need to pay wages and have some for themselves. 
Development charges kept  growing. 
The Federal government introduced a  tax on goods and services.  Everything  needed  to produce a house.
The Feds argued  the tax  had previously been hidden from the consumer because it was paid by  manufacturers of bricks and lumber and plumbing and glass etc.etc.
All services associated with building  and  transferring a property title  were newly taxed.
Lawyers, real estate services, planners,engineers,consultants, all that lot.The list is endless and has to be duplicated for O.M.B. hearings.  
Application fees have to be paid and  accompanied by a myriad of  professional studies. All of them taxed. 
Departments engaged  in the process  by the municipality, the Region, Conservation Authorities, and all other agencies  had to  get their cut  application fees.  They pay the freight.
Land transfer tax existed all those years ago
The Province of Ontario was first to introduce a sales tax. It produced such a wealth of revenue the government was too embarrassed to tell. 
It was after they were embarrassed by the wealth of revenue generated by lotteries. 
And of course  in addition to the  billions generated by the L,C.B.O. 
Thousands of people are employed in the  housing industry. All paying government taxes. . 
Forty years ago, houses got built. They  stood the test of time. Neighborhoods came into being and matured nicely.
Front yards were sodded. Not the back. A single sidewalk was built on a major traffic collector. 
Ditches provided storm  drainage.
Driveways were of chucky stones.
Trees were not planted on  front lawns.
There were no boulevards,  no urban tree forest.
Hydro was overhead 
Three bathrooms were not required , or designer kitchens 
or picture windows that had  to be replaced in a couple of years 
because of rot caused by condensation, tight seal and high efficiency furnaces.
Did I mention; the first lot levies were $250. 
They are now  close to $36,000.
A house that might have cost $14,000, is now assessed close to half a million. 
Taxes hidden in the price, now become " market value"of the property,  assessed accordingly and taxes are paid on taxes forever and a day.
Easy come, easy go. 
No matter how much ready cash is available, no matter how it grows, politicians and bureaucrats can always find a reason, valid or otherwise, to take more. 
Did I tell you Aurora politicians are often advised  of  our community's affluence and high level of education ?