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Council Actually Raises Development Charges

By Ryan McGreal
Published May 14, 2010

I was pretty discouraged, last year, to see City Council cave in on increasing development charges so that city revenues no longer subsidize new suburban home construction.

The argument last year was that a recession is no time to increase development charges and that big public subsidies (last year's freeze is costing the city $9 million) are all that's keeping the home building industry - and the local employment it provides - afloat.

This year, the argument from the Hamilton Halton Home Builders Association is that a recovery is no time to increase development charges. You can see where this kind of thinking will lead if we follow it.

Amazingly, Council voted this week to end the freeze and raise the current residential development fee from $19,500 to $26,600 effective July 6. (Note: even at the higher rate, Hamilton's fees will be among the lowest in the region.)

Naturally, the home builders are outraged that the "relationship of inclusion, where we liaise between the municipality and ourselves when it comes to this kind of decision" wasn't enough to retain Council's obedience to the home builders' interests.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

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By Balance (anonymous) | Posted May 14, 2010 at 21:51:22

I don't think it will have a huge affect on new home purchases. After all, what is financing an additional $7,000 on a home..........it is really not that significant when you look at the total cost especially when compared to other urban areas closer to the GTA. I think better consultation and explanation could have taken place with the homebuilders as they are a key economic development driver in the community. If you're going to attract jobs then the employees need a place to live at a reasonable cost. I don't really appreciate the biased article above.

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By Meredith (registered) - website | Posted May 15, 2010 at 16:23:09

I'm glad council was wise enough to realize that the development charges are there for a reason, and that they don't need to come begging for this type of development.

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By Desmond (anonymous) | Posted May 15, 2010 at 17:25:36

The problem as I read the situation is the economy is still at a very fragile point and despite what Balance says $7000 on anything is still alot of money.

What has to be remembered is the construction industry is a vital part of the region's economy.

Lakeport is shutting down eliminating 140 jobs and its treated as if the world is going to stop spinning.
Construction of new homes directly employs thousands, yet that industry is looked on as a pariah.



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By Ryan (registered) - website | Posted May 15, 2010 at 18:13:38

I don't really appreciate the biased article above.

Is it "biased" or merely opinionated? As I've argued many times, development charges should reflect the public cost of development; otherwise the general tax levy is subsidizing individual home construction. I consider this unwarranted since suburban home ownership is a private good but not a public good.

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By Kiely (registered) | Posted May 17, 2010 at 12:03:08

"relationship of inclusion, where we liaise between the municipality and ourselves when it comes to this kind of decision"

It has become quite apparent to me that every special interest/lobby group and business "leader" and their cronies in this city fell they deserve to have final say. The tail certainly is wagging the dog.

Oh well, Mayor Eisenberger had it right for what was it… two days???

"Full Steam Ahead" indeed, too bad the wheel is cranked and all we're doing is donuts.

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By z jones (registered) | Posted May 17, 2010 at 14:15:19

"Full Steam Ahead" indeed, too bad the wheel is cranked and all we're doing is donuts.

Comment win.

Oh, wait - that's actually the truth. Government fail. :'(

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By d.knox (registered) | Posted May 17, 2010 at 20:57:00

The increase in development fees is the first thing I've seen in awhile between the city and the developers which suggests that there isn't complete corruption at City Hall. Developers are just going to pass the costs of new houses along to the new occupants, so eventually the new housing prices might actually reflect costs and not current resident subsidies.

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By Mr. Meister (anonymous) | Posted May 21, 2010 at 00:22:48

The development charges should be higher still. Any negative repercussions will be short and temporary. The people who can afford to pay for these new homes should contribute to the city as a whole. Let's just put it at $40,000. I bet it would be a small blip on the charts when we look back 10 years from now.

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By pumpkin (anonymous) | Posted June 12, 2010 at 08:22:26

I am a new home buyer and was just blown away while signing a purchase agreement with a builder here in Hamilton. The $7500 does NOT go on your mortgage it is due at closing (so out of my profit money from my house selling)...Also not everyone buying a new house is RICH, $40,000 is ridiculous. Just because new home buyers are buying new doesn't mean we havent been paying the same taxes as everyone else living in a resale home or less new home, Property taxes, HST, income etc etc. So we have been contributing to the city as a whole. This was a huge shock and I wonder how many home purchases have suffered from it as my husband and I seriously contemplated leaving the table because of that $7500.

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By highwater (registered) | Posted June 12, 2010 at 11:58:27

Seeing as Hamilton's development charges are still some of the lowest in the region pumpkin, I'm curious as to where you would have gone?

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By pumpkin (anonymous) | Posted June 12, 2010 at 17:11:16

We have only ever bought resale and were completely unaware of this as the $7500 was just introduced. However we are moving into a phase 9 and the development charges are $7500 and phase 10 is only $5000. It is not where would have gone, we would just have continued to buy resale as opposed to new. This definitely does not help the new home builders situation right now which in turn does not help the people purchasing them. I would have rathered higher property taxes than one what is considered by me to be a huge lump sum.

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By T (anonymous) | Posted November 23, 2010 at 14:05:33

From what I can deduce it looks like the repercaution of the "freeze" lift will be on the home buyers! I can see the builders increasing home prices in order to offset the extra charges being imposed on them.

infojenie.
www.myshoppingjenieblog.blogspot.com

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