Housing policies, rising taxes won’t help affordability crisis

In justifying a new position in its planning department, Woolwich cited provincial legislation that requires a quicker turnaround on development applications. Delays could lead to some or all of the application fees having to be refunded. The additional hire was also justified on the grounds costs won’t be coming out of general taxes. Instead, fees paid by developers will cover the extra expanse. So, as with development charges, the fees will be added on to the cost of new homes, increasing their already inflated prices.

The province says its new rules are needed to provide new housing. The goal is 1.5 million new housing units by 2031. That’s the rationale for the likes of Bill 109, the More Homes for Everyone Act, and Bill 23, the More Homes Built Faster Act.

Such bills, however, have also engendered no end of criticism on a variety of fronts, not least of all the massive environmental damage caused by so much construction, let alone the shortcuts taken by the Ford government – the likes of the Greenbelt plan, since walked back.

At the municipal level, the concerns have less to do with the environment or the reduction in the quality of life experienced by existing residents. Instead, they’re typically about the potential refunding of fees or cuts to development charges.

Development charges are the new bottomless well for many municipalities, used to drive up revenues in conjunction with growth, which is never seen as a negative.

The provincial legislation that exempts more projects from development charges and puts more controls over the process is seen as a threat to revenues. The move addresses runaway increases in such fees, which are levied on the premise that the buyers of new homes should pay for future services such roadwork, parkland, schools and the like. The dubious growthpaying-for-growth arguments have spurred exponential growth in such DC fees.

Given that government fees and taxes can add tens and even hundreds of thousands of dollars to the price of new construction – GTA builders, for instance, note those charges can amount to 25 per cent of the cost of a new home, as much as $250,000 – the province is not barking up the wrong tree when it takes aim at development charges.

Premier Doug Ford’s motives for the sweeping changes in recent legislation are fair game. It’s also fair to scrutinize whether any of the moves will actually lower prices or house more people – neither is likely. For municipalities, any talk of affordability can automatically be discounted as hypocritical when delivered by politicians and bureaucrats supporting ever-increasing fees and property taxes. The same nullification applies to environmental utterances that do not include ending growth.

It’s disingenuous to claim the ability to both suck and blow at the same time.

Even the idea that growth will pay for growth does not stand up to scrutiny given that municipalities are losing ground, and existing residents end up paying more as growth continues. Anyone paying attention in places that have seen a spate of new subdivisions – a list that includes Woolwich – knows that developers and builders made money, some people got new homes, the municipality raked in development charges and new additions to the tax roll, but there was nothing but downside for the existing residents who lost something in the mix only to face ever-increasing taxes.

Those who support such growth will always argue the benefits outweigh the negatives. Growth is always good. The trouble is, they can’t ever prove it. What we do know is that, at the local level, each new home ends up costing more than it generates in revenue. In the short-term, however, the opposite is true. The money paid just develop the land and construct a home – development charges and building permits, for instance – bring in thousands of dollars in each case. Then there are the property taxes, the increases to which far outweigh the marginal cost of providing services to one more home.