Peel development charge increase means homebuyers pay extra $18,000
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If you’re thinking of buying a newly built home in the Region of
Peel, you might want to schedule another meeting with your banker,
thanks to a 99 per cent increase in development charges just passed by
regional council.
At a recent meeting councillors from Mississauga, Brampton and Caledon voted to increase development charges for each single-family residential unit from the old rate of $17,830 to $35,532, effective Oct. 4. The increase will not apply to homes that have already received permits for construction or are well into the planning stage.
While the move was pushed by councillors who demanded that developers must pay for growth, both those for and against the dramatic increase admit it’s consumers that will pay the extra amount — almost $18,000.
“The development industry has raised huge objections to the region’s increase,” Mississauga Mayor Hazel McCallion told the Star. “That’s passed on to the person who buys the property. Developers add it to the cost of a house.”
Phil King, president of Orlando Corporation, was on the development industry working group that advocated against Peel’s sharp increase.
“Affordability of homes is a huge concern. More than $17,000 a unit increase on a single family home is a large number to accept,” said King, who addressed council Thursday. “Ultimately it gets passed onto the consumer, but they don’t see it. It’s the first-time buyer that gets hit the most.”
He said attempts to convince the region that some of the pricing factors they used in their cost calculations were too high, but staff and councillors didn’t listen.
King said his industry association, Building Industry and Land Development (BILD) has not yet decided whether it will appeal the increase at the Ontario Municipal Board.
McCallion said the move by regional council sends a clear message: “Our philosophy is that growth should pay its way.”
McCallion and other councillors, such as Mississauga’s Nando Iannicca, insist Peel’s new development rates are in line with other regions in the GTA and that Peel is only trying to catch up with the costs for roads, water and storm water infrastructure that development charges pay for.
“We’re saying to the industry, ‘it’s a privilege to develop here. Here are the real hard costs — you have to pay them,’” Iannicca said.
He said developers have and will continue to make a solid profit from doing business in Peel, but they must pay their fair share.
Asked if such a sharp increase might price Peel out of the market, he pointed to the staff report that shows even with the stiff increase Peel’s development charges are still competitive with Halton and York regions.
“I look out my window and don’t see development slowing down. I’m certainly not going to ask residents to subsidize developers.”
**********
There are a couple of statements which are simply not accurate in this story.
McCallion and other Councillors , such as Mississuaga's Nando Iannicca,insist Peel's new development rates are in line with other region the GTA and that Peel is only trying to catch up with the costs for roads,water and storm infrastructure that development charges pay for."
That is a deliberate distortion of fact.
Developers build the roads, water and storm infrastructure.
Municipalities do not take over responsibility for infrastructure for twenty-four months to ensure construction is sound.
Building permits are not issued for houses until servicing is complete.
Development charges are paid when permit applications are made
.
What the developers and the politicianschoose to obsure is development charges are needed to provide hard services for continued development..
Infrastructure to pump more water out of the lake to carry it farther and treat more sewage to dump back into the lake, is what development charges are paying for.
Without it, development would cease.
So why do developers and politicians collude to conceal what is really happening.?
When the stand pipe was constructed on Bloomington Side Road , we were told it was to use in a drought and only ten per cent of water used would be from Lake Ontario?
Now 75% of the water we use in York Region comes from Lake Ontario?
While new home buyers are compelled to pay $35,532 hidden tax on the home they buy, do property taxes continue to rise anyway?
Why, more particularly did we see a 12% incrase in water rates
in 2010, almost as much in 2011, again in 2012 and anticipated again in the next two years
Why, when the Region is taking money from developers to pay for growth, as they say, to protect current residents from exorbitant increases, why are current residents still experiencing exorbitant increases?
Where is the logic?
Where is the credibility?
Where is the integrity in public affairs?
Are we all expected to be part of the conspiracy?
At a recent meeting councillors from Mississauga, Brampton and Caledon voted to increase development charges for each single-family residential unit from the old rate of $17,830 to $35,532, effective Oct. 4. The increase will not apply to homes that have already received permits for construction or are well into the planning stage.
While the move was pushed by councillors who demanded that developers must pay for growth, both those for and against the dramatic increase admit it’s consumers that will pay the extra amount — almost $18,000.
“The development industry has raised huge objections to the region’s increase,” Mississauga Mayor Hazel McCallion told the Star. “That’s passed on to the person who buys the property. Developers add it to the cost of a house.”
Phil King, president of Orlando Corporation, was on the development industry working group that advocated against Peel’s sharp increase.
“Affordability of homes is a huge concern. More than $17,000 a unit increase on a single family home is a large number to accept,” said King, who addressed council Thursday. “Ultimately it gets passed onto the consumer, but they don’t see it. It’s the first-time buyer that gets hit the most.”
He said attempts to convince the region that some of the pricing factors they used in their cost calculations were too high, but staff and councillors didn’t listen.
King said his industry association, Building Industry and Land Development (BILD) has not yet decided whether it will appeal the increase at the Ontario Municipal Board.
McCallion said the move by regional council sends a clear message: “Our philosophy is that growth should pay its way.”
McCallion and other councillors, such as Mississauga’s Nando Iannicca, insist Peel’s new development rates are in line with other regions in the GTA and that Peel is only trying to catch up with the costs for roads, water and storm water infrastructure that development charges pay for.
“We’re saying to the industry, ‘it’s a privilege to develop here. Here are the real hard costs — you have to pay them,’” Iannicca said.
He said developers have and will continue to make a solid profit from doing business in Peel, but they must pay their fair share.
Asked if such a sharp increase might price Peel out of the market, he pointed to the staff report that shows even with the stiff increase Peel’s development charges are still competitive with Halton and York regions.
“I look out my window and don’t see development slowing down. I’m certainly not going to ask residents to subsidize developers.”
**********
There are a couple of statements which are simply not accurate in this story.
McCallion and other Councillors , such as Mississuaga's Nando Iannicca,insist Peel's new development rates are in line with other region the GTA and that Peel is only trying to catch up with the costs for roads,water and storm infrastructure that development charges pay for."
That is a deliberate distortion of fact.
Developers build the roads, water and storm infrastructure.
Municipalities do not take over responsibility for infrastructure for twenty-four months to ensure construction is sound.
Building permits are not issued for houses until servicing is complete.
Development charges are paid when permit applications are made
.
What the developers and the politicianschoose to obsure is development charges are needed to provide hard services for continued development..
Infrastructure to pump more water out of the lake to carry it farther and treat more sewage to dump back into the lake, is what development charges are paying for.
Without it, development would cease.
So why do developers and politicians collude to conceal what is really happening.?
When the stand pipe was constructed on Bloomington Side Road , we were told it was to use in a drought and only ten per cent of water used would be from Lake Ontario?
Now 75% of the water we use in York Region comes from Lake Ontario?
While new home buyers are compelled to pay $35,532 hidden tax on the home they buy, do property taxes continue to rise anyway?
Why, more particularly did we see a 12% incrase in water rates
in 2010, almost as much in 2011, again in 2012 and anticipated again in the next two years
Why, when the Region is taking money from developers to pay for growth, as they say, to protect current residents from exorbitant increases, why are current residents still experiencing exorbitant increases?
Where is the logic?
Where is the credibility?
Where is the integrity in public affairs?
Are we all expected to be part of the conspiracy?
ReplyDeleteIt 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 bourn 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.
Not sure this is going to fly. The construction industry is already taking a hit from people who spend their days driving back and forth to jobs in order to pay for their homes. Unless a town can provide jobs, real jobs, the trend to search for a perfect outside residence must slow. It isn't working too well with the families themselves as raising latch-key kids and expecting teachers to teach them everything is straining the education system as well. The time to teach basic core subjects goes out the window when teachers are worried about getting the kids proper food and care.
ReplyDeleteThe stupidity must be contagious. Canada Post gave thousands of employees incentive bonuses for last year, and they recorded a huge deficit. And, of course, in a move to save money, they shut off the service section of Aurora's Post Office. That sent 2-3 employees to Newmarket. Some saving! The sorting is still being down at the back. If you elected to keep your box #, your mail is now sorted in Aurora and you have to drive to Newmarket to collect it.
ReplyDeleteWe can't stop them, Evelyn. All one can do is reject the pricey whacky ideas that the Region tried to impose, one by one. Like salt removal and weird pipe re-fittings.
ReplyDeleteWere we not told that paving those sidewalks was ' policy'? Regional Policy or just plain Folly?
ReplyDelete
ReplyDeleteBy the way, what is the situation with the Ad Hoc Standing/Negotiating Committee/Team?
Is a report not due soon, one that will eventually see the light of the public's eye?
Scornful, mournful bated breath awaits!
Can Aurora afford its long term infrastructure costs ? I doubt it.
ReplyDeleteEconomically, it looks to me like we’re all going to hell in a basket.
Municipal, provincial and federal taxes, not to mention CPI are all going up faster than the average income increase and both private and public borrowing debt continues to increase.
The situation is completely unsustainable.
"Scornful, mournful bated breath awaits!"
ReplyDeleteSo, no change there, then...