Buying a new home in Wellesley could get considerably more expensive as the township eyes a large increase in the development charges levied on new construction.
If council goes for the maximum, the levy could jump to $7,666 for single-family and semi-detached houses, up almost 500 per cent from the current rate of $1,296. The rates, arrived at by forecasting population and housing gains and then calculating the cost of providing services to accommodate that growth, were presented to council October 6 by a consultant hired by the township.
The fees are intended to cover future municipal expenditures related to growth, with the developers – ultimately the buyers – paying for the cost of each new addition to the building stock. Regulated by the province, development charges are established by a formula dividing forecasted capital costs by the projected population growth. Eligible costs include long-term expenses for indoor and outdoor recreation services, administration, road construction, public works, fire protection and water services.
Council has the option of choosing the development charge, and the numbers given are maximums. That would mean $5,686 in development charges for row houses and multiples, and $4,125 for apartments.
Hemson Consulting previously had an information session with council on August 19. The background study and proposed bylaw were released to the public on September 22.
For non-residential properties, the township will be permitted to charge up to $25.61 per square metre. That number is broken down into $13.63 for township engineering, $9.52 for fire protection, $1.31 for public works, $1.15 for general government, and nothing for parks and recreation.
For residential properties, 39 per cent will go to parks and recreation, 32 per cent will be for township engineering, fire protection will receive 23 per cent, and public works and general government will each get three per cent.
Not surprisingly, talk of big increases has local builders worried.
Frank Reis, a Wellesley builder, said he’s seen staggering prices for lots, and it can cost up to $200,000 before they even break ground on a new development.
“At the pace that we’re going, we’re just going to kill the industry,” Reis said. “There’s got to be a point where people are going to say enough’s enough, and stop building here. We look like the crooks, as the bad guys, as developers.”
Development charges help pay for new infrastructure and facilities to maintain service levels. The principle is that growth pays for growth, so that the financial burden does not fall on existing taxpayers.
“Less than 10 years ago lots were $50,000, now they’re $3,000 a foot at $150,000 for the average lot,” Reis said. “It used to be that both municipal and regional levies were included in the lot price. Then it went to the regional levy was paid and you had to pay the municipal levy. And now both levies are left in the builders’ laps.”
Dan Lavigne of D.G. Lavigne Homes said the township needs to bring people in and increasing development charges like the ones presented will deter some homeowners from purchasing land in Wellesley. He questioned if all the proposed changes to the township are necessary, if so, how quickly they need to happen.
“When I was reading through the fire protection and whatnot, I read in there an aerial truck is proposed within the next 10 years, five years, two years? That’s a big cost for the township for the DC charges, and a fire hall,” Lavigne said. “Are these things that are going to be purchased regardless if there’s going to be one more house built in the township, or is this something that’s going to be required because of the population growth, and do we need it?”
Mayor Ross Kelterborn said they already purchased the land for the new fire hall, but if it’s built will depend on the new council. He said the same goes for the purchase of a new aerial truck.
The new council will decide on the final development charges and then a bylaw will be placed in effect. Wellesley hasn’t had an increase in development charges in more than 10 years.
By comparison, Woolwich Township levies a fee of $4,986 for an average residential property, a rate it’s looking to bump up to $6,712. Waterloo Region’s haul on development charges in the townships is currently $12,936 and slated to go up again.