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Cost of building a home to rise

The cost of building a new home in Woolwich is likely to rise again as the township makes plans to hike its development charges.

The fees are intended to cover future municipal expenditures related to growth, with the developers – ultimately the buyers, of course – paying for the cost of each new addition to the building stock.

For fully serviced single-family homes in Woolwich’s urban areas, the new charges considered by councillors Tuesday night would see levies rise to $7,129, up 6.2 per cent from the current $6,712. In Breslau, due to servicing arrangements with the City of Kitchener, the increase would hit $8,603 from $8,432.

Those fees are just the township portion, with the Region of Waterloo hitting new home buyers with the largest cash grab. Along with the smaller levies for the school boards, development charges for a new single-family or semi-detached home are already pushing $30,000.

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.

Most of the current fees were set in a major review of development charges done in 2014. Completed on a five-year cycle, the next full study is slated for 2019, but the township has an update study in place for this year. That document shows Woolwich needs another $7.8 million for roads and related capital than was identified in the last full review, an increase of 70 per cent.

In the parks and recreation file, another $300,000 is needed, while administrative services needs another $400,000. Water and wastewater projects require another $800,000.

Combined together, the township needs to hike its development charges on residential, commercial and industrial properties an average of six to eight per cent, explained Andrew Grunda of Watson and Associates, the consulting firm that has carried out the township’s recent DC studies.

In going over the detailed list of future growth-related spending, Coun. Patrick Merlihan noted the document still takes into account projects such as splash pads, including the Elmira facility that opened last year, which are now typically paid for my community groups. Such projects could be dropped from the equation, he suggested.

Noting that the new study is simply an update, finance director Richard Petherick explained that such projects would be reconciled when a full review is carried out next year.

Although Tuesday’s council session was a mandatory public meeting to air the proposed changes, nobody in the gallery raised any questions or concerns. Councillors are expected to ratify the changes on May 29.

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