Developers welcome DC bylaw appeal
Niagara developers gained an unexpected ally opposing regional development charge increases.
“Just let me clarify; the City of Welland is appealing the ( Niagara) Region’s development charges?” asked Mark Basciano, president of Mountainview Homes.
“Wow! Wow!” he said when told about the city recently launching an Ontario Municipal Board appeal.
Well and Mayor Frank Campion confirmed last week that the appeal was launched after hearing from unhappy developers facing increases of up to 400 per cent on some multi- residential buildings. Meanwhile, he said the city was concerned about the impact on future development such as affordable housing projects, as well as student housing, to name a few.
It’s the second time the city has launched an appeal of the Region’s development charges bylaw. It opposed an earlier version of the bylaw in the summer.
In a statement last week, a Niagara Region spokesperson declined to comment about the city’s appeal, saying: “It is Niagara Region’s practice to refrain from commenting on matters that are currently before the Ontario Municipal Board.”
Basciano said he supports development charges when they are used for their intended purpose.
“They’re needed and they’re an important tool that municipalities and regions have and use to pay for new infrastructure that’s required … But when they’re not applied fairly, reasonably, or responsibly, they become harmful,” Basciano said.
“Unfortunately sometimes, some municipalities and some regions across the province — just not in Niagara — use it as a source of revenue because it’s easier to grab from that pot, rather than the tax base.”
Basciano said the new bylaw could mean hundreds of thousands of dollars in increased costs on large- scale projects, undermining efforts by developers to keep prices affordable.
“When I break down the cost of a house, most people are shocked when they see how much of it is actually not the house,” he said.
He said the cost of permits and development charges add significantly to the price of the structure. And those costs are ultimately passed on to consumers.
“We’re trying to come up every day with more affordable products, different building forms and higher development costs like development charges just drive our costs up,” Basciano said. “It’s working against what we’re trying to achieve.”
Aamir Soomro said his plans for a student- orientated condominium building in Welland would have “definitely been derailed” if that project were subjected to the new development charges. It would have increased his costs by an average of $ 15,000 to $ 20,000 for each of the 42 units in the building, added Soomro, chief executive officer of St. Catharines- based N Square Development Group Ltd.
Although he said that condominium building — called The Locke — was approved before the new development charges bylaw was implemented, he said the cost increase, particularly on larger multi- residential units, will “definitely make a dent for future plans.”
“Other municipalities are incentivizing high density multi- residential housing, whereas Niagara Region just wants single- family homes and townhouses,” he said.
Soomro said he suspects the development charge hike is paying for infrastructure needed in west Niagara, because there are no real infrastructure needs where he plans to build his condo.
“In order to funnel growth to the Grimsby area they’re basically trying to spread the development charges all over the rest of the municipalities,” he said.
As a result of the increases, he said many builders may limit the size of condominium units to one or two bedrooms, rather than four.
“The development charges are prohibitive in that sense,” Soomro said.
He said his company had future plans to add another building on Niagara Street with a similar design to The Locke, but that, too, will likely change.
“The building will go forward, it’s just that the unit layout will change. There will be more one- and two- bedroom units and smaller units. The one or two bedrooms development charges are more compatible with that sort of development.”
Soomro said other housing types will likely be adversely impacted by the increases too, including seniors and low- income facilities.
“I think the Region should encourage higher density housing versus prohibiting it with such high development charges,” he said.
“For a place like Welland, it will basically crippled their development industry with such charges, especially in the condo sector.”
Basciano said Welland appears “to really understand” the potential impact the increase will have on affordability and future growth.
“The City of Welland … they obviously get it.”
“They’ve looked at it. Sometimes it affects a municipality’s ability to attract growth to their community,” Basciano said. “If their development charges in total are too high, obviously it creates competition between one municipality and another.
“Perhaps they’re worried about not being competitive in trying to attract new growth to their municipality versus other municipalities.”