Commentary

Details Missing from Development Charge Debate

Residential and industrial development charges are going up, but they are still a long way from paying the real cost of growth. That means higher water/sewer rates and higher taxes for Hamiltonians.

By Don McLean
Published June 28, 2011

When you read today's front-page Spectator article, why didn't you learn about the following public facts?

1) The new industrial development charges are still being discounted by 30 percent. The actual charge is $15.24 per square foot but it is being reduced to $10.58, with the difference being loaded onto local taxpayers and ratepayers.

2) The city has lost nearly $62 million over the last six years because of such discounts and exemptions to development charges. $26.6 million of that was because of discounts to industrial development charges, including nearly $8 million last year alone. That's because the $6.65 current rate was barely a third of what should have been collected. The city's finance chief, Rob Rossini, summarized what that has meant for city finances.

"In total, over the last six years, the various exemptions for downtown, industrial, small commercial, the phase-ins, non-profit housing, churches, hospitals - we have a number of those - it's come out to about $62 million over the last six years," Rossini told council on June 23.

"We have a $9 million recovery annually in the water and sewer budget. We don't have an equivalent amount on the tax budget, so how we've been handling that in the tax budget is we defer projects - we just don't do them."

3) The council decision includes a $78 million windfall to developers. Council has agreed to "share" with the developers 49 percent of the grants it has received from the federal and provincial governments for the Woodward STP expansion/upgrade. That will increase water rates by at least 4 percent a year.

Instead of the federal and provincial tax money being used to lower the costs to local ratepayers, nearly half will be used to lower development charges. And another $100 million grant being sought by the city will be divided the same way, adding lowering the fees by another $49 million.

4) The "added" cost of stormwater ponds has also been subtracted from the approved $15.24 charge (which is now $19.00). Currently stormwater pond costs are included in the development charge. Now they will be excluded and commercial and industrial developers will pay for them directly.

5) As a further concession to developers, the fee increases are being pased in over 18 months rather than charged immediately as the calculation process assumed. That delay will mean millions more dollars shifted onto taxpayers and ratepayers.

6) Another new concession is lower rates for industrial developments under 10,000 square feet - a practice also being continued for commercial developments. Again, the discounts only lower costs for the developers, not the bill for servicing their growth projects, so the taxpayer has to cover the difference.

7) Provincial legislation adopted in 1997 by the Mike Harris government prevents cities from collecting for many growth costs, including the following capital costs: hospital expansions; city hall expansions; police and ambulance vehicles; all solid waste costs including landfilling, recycling, composting and even the extra collection trucks; all arts and cultural facilities (excepting libraries); and other items.

These costs are deducted off the top, before the determination of the development charge rate.

Yes, the residential development charges are going up a bit - increasing by $750 to just under $27,000 - and the industrial ones are going up quite a bit - from 35 percent of the calculated fair rate to nearly 70 percent of that rate. But all these charges are still a long way from paying for the real costs of growth. That means higher water/sewer rates and higher taxes for Hamiltonians.

Developers are still getting kid gloves treatment here - despite the 'sky is falling' screaming from the Chamber of Commerce and other builder representatives.

Don McLean is chair of Friends of Red Hill Valley and coordinator of Citizens at City Hall, a volunteer group that has monitored city affairs since 2004 and distributes free news articles via email. The group can be contacted at info@hamiltoncatch.org.

21 Comments

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By stanley (anonymous) | Posted June 28, 2011 at 19:38:11

great piece. What would be neat, and sad, would be to pair this with the recent zoning articles on RTH to contrast the discounts the city gives to greenfield development with the costs they levy on brownfields through zoning.

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By z jones (registered) | Posted June 28, 2011 at 20:11:43 in reply to Comment 65297

Bingo. We roll out the red carpet for greenfield developers while we tie infill developers in red tape. Then we say we have to rezone more farmland for sprawl because that's what the "market" wants.

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By WRCU2 (registered) - website | Posted June 29, 2011 at 09:36:52 in reply to Comment 65299

I am a huge proponent for infill; I do not like seeing vacant property in my neighborhood because this tells me something is missing, there is a void and experience has also shown how too many voids may become a vacuum that sucks the life right out of a community.

I believe the city should at all cost and by any means necessary, make infill development incentive like candy for a baby. Perhaps that'll give us all something sweet to cry about. Wouldn't that be dandy?

Comment edited by WRCU2 on 2011-06-29 09:47:51

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By jason (registered) | Posted June 28, 2011 at 23:06:52 in reply to Comment 65299

reminds me of ripping up rail lines all across North America, replacing them with smelly buses that have their timetables made worse and worse each passing year with less and less service while raising fares the entire time. Simultaneously, building mega-interstates and freeways and then stating that 'everyone wants to drive' so we shouldn't bother investing in transit.

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By WRCU2 (registered) - website | Posted June 29, 2011 at 08:45:53

DR 8 14 57%

Developers are still getting kid gloves treatment here - despite the 'sky is falling' screaming from the Chamber of Commerce and other builder representatives.

Seriously, the sky is falling screaming? Kid gloves treatment? I admit greenfield development in the midst of environmental upheaval is sheer idiocy to say the least and that some developers are maggots, but don't we want developers to be somewhat more comfortable investing and recycling garbage here in Hamilton than elsewhere?

There are only three comments here thus far: the anonymous stanley, and two of RTH's big guns, z jones and jason and yet this thread is at 57%. Clearly the community does not fully agree with what was said or how IT has been bent.

We will CATCH more flies with honey than vinegar.

Comment edited by WRCU2 on 2011-06-29 09:05:52

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By plkjhgtr (anonymous) | Posted June 29, 2011 at 14:33:41

I am fast concluding that WRCU2 is some combo of mischief, crackpot, full of shit, unreadable--who the hell cares about WRCU2's "analysis" [choke of who's allowed to read and respond? Start your OWN website write what you like, complain all you like [and you're boring, too].And your idiot self number codes are dumb.

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By WRCU2 (registered) - website | Posted June 29, 2011 at 22:16:29 in reply to Comment 65343

Thanks for your analysis anonymous, I suppose you're right and right now I ain't looking for no fight. Good Night

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By Undustrial (registered) - website | Posted June 29, 2011 at 21:22:38

WRCU2 has a website, and after reading it, I finally understand what those bizarre number strings mean. Intriguing notion.

Aside from that, I'm pretty damn glad Don posted this, since this has been one of our city's biggest issues for years. Subsidizing suburban development has not only led us into a land/density crisis, but also a deep budgetary hole. These Development Charges are one of the main ways that happens, and for the amount of complaining we hear about them, you'd think they turned a profit.

Where is the money going to come from to pay for LRT and other proposals like it? Stop wasting tens of millions lowering density.

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By Hypocrite (anonymous) | Posted June 29, 2011 at 21:30:46

Red Don has spoken. the true friend of business...the guy who ran for the Communist party and is an avowed marxist leninist can't be trusted on this or other issues.

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By Hypocrite (anonymous) | Posted June 30, 2011 at 14:16:31

On the other side, would there be a successful RTH, would Spec and other media coverage have improved, without the analysis hard work over years by people that me-hypocrite is griping about? I stand aside from my comment above--I guess it was dumb.

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By Ryan (registered) - website | Posted June 30, 2011 at 14:37:37 in reply to Comment 65400

I don't think Don is anti-business, but I would guess that he is anti-bidness.

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By Loverly (anonymous) | Posted June 30, 2011 at 18:43:36

insult spam deleted

Comment edited by administrator Ryan on 2011-06-30 21:00:43

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By Undustrial (registered) - website | Posted June 30, 2011 at 21:24:41

Gotta love the red baiting. Especially since the explicit point of the article was to question raising tax dollars for state interference in the economy.

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By Sphincter (anonymous) | Posted July 01, 2011 at 08:47:36

Comments with a score below -5 are hidden by default.

You can change or disable this comment score threshold by registering an RTH user account.

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By Undustrial (registered) - website | Posted July 01, 2011 at 12:08:02 in reply to Comment 65471

It is most certainly still red baiting if somebody is a communist. Can you actually provide evidence of communism or slander, or do you just enjoy name-calling?

Insults and accusations do not an argument make.

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By stanley (anonymous) | Posted July 01, 2011 at 12:54:35

seems to me Don has made some enemies, and that makes sense since he singlehandedly every year exposes a massive amount of muck on developers and their political stooges in this city. Keep at em Don, their only answer seems to be to call you a commie.

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By helpful (anonymous) | Posted July 02, 2011 at 12:38:30 in reply to Comment 65475

They're only answer is to keep listening to gospel accdg to Spectator, or CHML, and the often defeated ex-mayor. Also they treat RTH like it was their comment toilet. Maybe if public money came in meaningful $$ from those taking advantage of infrastructure--the house builders, devpmt charges, eg--then maybe the sewers and toilets of the RTH slammers would be fixed and work [and they'd dump at home instead of publicly]. Historically red-baiting as an act has almost nothing to do with who or what one is or is saying and lots to do with closing down all talk because "I deem you this", and therefore. Hands over ears and noise blocking talk. There are fewer of these types around than the RTH negative post-ers would indicate--and a lot has to do with them being long time in no-discussion land, Hamilton. It's a bit like religious zealots blinded by bigotry: reason is not a human activity.

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By Sphincter (anonymous) | Posted July 03, 2011 at 09:48:24

Comments with a score below -5 are hidden by default.

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By Septic (anonymous) | Posted July 04, 2011 at 11:14:53

Not nice comments about Citizen Don. He is a comrade but he is our comrade. Well done Don. all your exaggerations and prevarications haven't really harmed your suspect reputation that much. And your Catch spinning is entertaining for sure.

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By mystoneycreek (registered) - website | Posted July 04, 2011 at 11:18:22

I've walked past this site on numerous occasions over the past week. Nice to see that the situation's been picked up as a news item.

http://www.thespec.com/news/business/art...

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By Undustrial (registered) - website | Posted July 04, 2011 at 15:36:13 in reply to Comment 65509

Good lord. That's a painful article. I love the part where he screws up the math...

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