New home buy­ers face higher devel­op­ment charges

The Peterborough Examiner - - LOCAL - JOELLE KOVACH EX­AM­INER STAFF WRITER joelle.kovach @pe­ter­bor­ough­daily.com

Coun­cil gave fi­nal ap­proval on Mon­day to in­crease devel­op­ment charges by 26.4 per cent for the next five years, start­ing in Jan­uary.

The hike will take devel­op­ment charges for an av­er­age house to $29,500 from the cur­rent rate of $23,337, a dif­fer­ence of more than $6,000.

Coun. Stephen Wright wasn’t happy with the idea of charg­ing this in­creased fee to peo­ple who’ve al­ready bought a prop­erty but haven’t yet taken out a build­ing per­mit.

“The re­al­ity is, not ev­ery­one has $7,000 just ly­ing around,” he said. “In all fair­ness, we should not pe­nal­ize con­sumers.”

Devel­op­ment charges are fees on new devel­op­ment im­posed by the city in or­der to pay for cap­i­tal projects in ar­eas such as li­brary, polic­ing and public works, that are needed to serve new neigh­bour­hoods.

Peter­bor­ough and the Kawarthas Home­builders As­so­ci­a­tion had ad­vised coun­cil­lors that their mem­bers have a to­tal of 67 cases where clients have pur­chased homes that haven’t been built yet.

Wright wanted to ex­empt those buy­ers from the in­creased fee — even though it would mean about $221,000 less col­lected in devel­op­ment charges.

Coun. Les­ley Par­nell said she thought that was a good idea, es­pe­cially con­sid­er­ing that 17 of those 67 agree­ment-hold­ers are first-time home­buy­ers.

“Many young peo­ple are re­ally strug­gling,” Par­nell said. “This is one way we can do the right thing.”

But city trea­surer Richard Frey­mond told coun­cil­lors they can’t ex­empt devel­op­ment charges in 2020 with­out putting that money back into city cof­fers in 2021.

Coun­cil is obliged to cover any devel­op­ment charges it chooses not to col­lect from peo­ple, Frey­mond ex­plained — and he said that money can only come from taxes.

That didn’t sit well with most coun­cil­lors.

Coun. Dean Pap­pas, Coun. Henry Clarke, Coun. Gary Baldwin, Coun. Kemi Akapo, Coun. Keith Riel and Coun. An­drew Beamer all ex­pressed reser­va­tions.

Beamer said that while he un­der­stands it’s un­fair to sud­denly ask a new home­buyer to pay nearly $7,000 more in fees, it’s also un­fair to ask other cit­i­zens to sub­si­dize them.

At the new rate, devel­op­ment charges are ex­pected to raise $42.3 mil­lion for the city be­tween 2020 and 2024 (af­ter which time the fees will be re­viewed again).

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