New development charges implemented

Last night we held a special meeting of the Planning Committee necessitated by the fact that we had lost a meeting week as a result of Family Day. Among the items of interest was Item 4 which provides an update on building activity within the city. I was particularly interested in the numbers since they would be the first test of the impact of the new development charges.

You may recall that council received dire warnings from the Home Builders Association about how the $6000 increase in the development charges that had been approved by council in August 2009 would cripple the industry and lead to massive job losses in the building trades. At that time, despite the concerns that many of us had about delaying the implementation of the increase to the detriment of the residential taxpayer, we agreed to hold off until January 1st. Predictably, in late fall the request was for a “phase in” over the following year, a move which would have cost the taxpayers a further $3.5 M.

Although the request was championed by some of council, fortunately cooler heads prevailed. The new development charges were implemented beginning January 1st.

And what was the result? I am happy to report that the number of building permits issued in January 2010 was more than double that of the preceding year, increasing from 153 in January 2009 to 330 in 2010. The increase was particularly pronounced for single family detached households, the area of greatest concern. In 2009, 23 such permits with a value of $7,957,000 were issued while this January there were 128 with an estimated value of $25,842,950! Clearly, the new charges were not the deterrent they were touted to be.
It was important to hold firm on this issue. We are in tough economic times and we cannot expect the residential taxpayer to subsidize the development industry. Every time we waive a charge or a fee, the city’s revenues are decreased. That means that either we have to tax the homeowner and residential tenants more or we have to cut back services. Neither are acceptable. We need everyone to pay his or her fair share.