Woolwich council this week joined in on one of the major municipal squawking points when discussing Bill 23, the so-called More Homes Built Faster Act: the loss of development charges revenue.
The new legislation exempts more projects from development charges (DC) and puts more controls over the process. 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 as roadwork, parkland, schools and the like. The dubious growth-paying-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. At the municipal level, 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.
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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 to 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 funds far outweigh the marginal cost of providing services to one more home.
Multiplied over hundreds of houses in a subdivision, that money adds up to a big boost to municipal coffers. Problem is, little if any of that money benefits existing residents of the community. Rather, the year-over-year growth in assessment is simply rolled into the budget – typically doled out by politicians and bureaucrats not to the public but to themselves in the form of raises and more hires to bloat government still more.
No one ever says, “Hey, we have all this extra revenue, let’s cut everybody’s taxes.” That, at least, would provide some short-term compensation to existing residents inconvenienced by the growth.
Over longer periods, growth brings increased demand for services – always overpriced in the case of governments – and, eventually, huge infrastructure costs.
The new Woolwich council meeting this week heard about shortfalls, more borrowing, shifts in the tax burden and the seeds of more staffing requests, all the result of new provincial legislation. Councillors must resist such arguments in favour of prioritizing the essential from the optional. The latter must come under economic scrutiny, while the latter may have to be foregone in the name of budgeting that benefits residents’ wallets.