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Monday, July 6, 2020
Connecting Our Communities

Cost of building a home in Woolwich to jump again

Township plans to hike development charges, levied to offset costs of growth, by an average of 19% on new homes

The privilege of building a new home in Woolwich will cost you an additional $1,800 next month, as the township plans to hike its development charges by 19 per cent.

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 $11,663 from $9,836 (18.5 per cent). In Breslau, due to servicing arrangements with the City of Kitchener, the increase would hit $13,273, up from $11,446 today, a jump of 16 per cent. In the rural areas, fees for a single-family home would be $9,373, up 17.5 per cent from $7,933.

Those figures represent just the township’s portion of development charges, which amount to less than 30 per cent. With the Region of Waterloo, which takes the largest chunk by far, and school board charges factored in, new home buyers are hit up for some $40,000.

The township’s development charges bylaw was last reviewed in 2014, when the average cost tacked on to a new home hit $6,712 from $4,986 previously, a 36 per cent hike.

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.

On the non-residential side (industrial, commercial), those constructing new buildings would be assessed a fee of $4.02 per square foot, up from the current rate of $2.74.

Andrew Grunda of Watson & Associates Economists, the firm hired to carry out Woolwich’s development charges study, told councillors meeting June 4 that rates are arrived at by forecasting population and housing gains and then calculating the cost of providing services to accommodate that growth.

By 2031, Woolwich is expected to hit a population of 35,000, up from about 25,800 today, a growth rate of 36 per cent, he said. Over that time, the township predicts it will need $78.3 million in capital spending, with development charges covering about 48 per cent of that, some $37 million.

Most of that growth will be in Elmira (49 per cent) and Breslau (43), with six per cent in the urban settlements and two per cent in the rural area.

Though councillors didn’t tweak any of the numbers, they did opt to remove exemptions from development charges previously allowed for private schools and places of worship, and suggesting they’d like to see exemptions added for affordable-housing projects.

Woolwich is alone in the region in exempting private schools from development charges, and Wilmot Township is the only other that currently exempts churches from the fees.

Councillors agreed that eliminating the current exemptions makes sense given that provincial regulations force the township to in essence take money from the general tax levy to compensate for the development charges it foregoes by exempting private schools and churches.

“It think that’s what flipped me,” said Coun. Scott McMillan. “It doesn’t seem right to me that we’re recouping from the general tax levy to help build a church.”

Fellow Ward 1 councillor Patrick Merlihan favoured that approach, noting pragmatically there isn’t a long line to build new churches.

Noting that scratching the pair of exemptions was the thing to do on principle, he added that exemptions to help with affordable-housing projects is also the principled approach.

“That’s just the right thing to do.”

With councillors still looking for details such as whether exemptions would apply to only non-profit projects and what exactly constitutes “affordable,” director of finance Richard Petherick said he would prepare a report prior to the end of the month. He added, however, that council could look at requests to waive development charges on a case-by-case basis rather than adopting a blanket policy.

“I’d be more comfortable with that,” suggested Coun. Murray Martin.

Although Tuesday’s council session was a mandatory public meeting to air the proposed changes, nobody attended to discuss the issue. Councillors are expected to ratify the changes on June 25.

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