New provincial legislation will have an impact on how Wellesley collects development charges, fees levied on new construction to finance growth-related projects. The details are still forthcoming, says the township’s director of planning.
Tim Van Hinte provided an update on Bill 23, The More Homes Built Faster Act, as councillors met Tuesday night.
“Development charges are fees collected on residential, commercial and industrial development to help pay for the cost of infrastructure required to provide municipal services as a result of new development such as roads, transit, water and sewer infrastructure,” he explained.
“There’s this concept in Ontario that growth should pay for growth,” said Van Hinte, noting infrastructure and municipal services needed by those living in new subdivisions, for instance, should be paid by those building the new homes.
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Development charges are collected by the township, the region and the school board for the services each body provides.
The township sets development charges based on what services will be needed due to growth. It’s permitted to collect fees for projects that fall into one of four categories: fire protection services, parks and recreation services, administration, including studies, and roads and related services.
The current bylaw’s projects for these categories totals almost $27.3 million, an amount higher than usual due to the construction of a new recreation centre. Township staff anticipated they could recover about $3.3 million in development charges to apply to these projects.
The current bylaw was passed in December 2019 and is in effect for five years until 2024.
Bill 23 will change some aspects of how development charges work, meaning which projects the township collects them for, how they are collected and what they can be spent on, Van Hinte said.
Van Hinte said Bill 23 makes it so that municipalities can no longer collect development charges from projects that create additional dwelling units, though the township doesn’t currently collect such charges.
Affordable and attainable housing is now exempt from development charges. Van Hinte supports that change, saying more affordable housing is needed, though how the province will be defining these categories is not clear.
Purpose-built developments for renting will also be given discounts on development charges, with more discounts given for more bedrooms. “We don’t get a lot of purposely built rental housing in the township anyway, but I guess we will see if some of this spurs it or not. Time will tell. A lot of these changes are designed to spur a more affordable mix of housing, so that will be interesting,” said Van Hinte.
There are other incentives included in Bill 23 that Van Hinte said effectively give rebates for development charges with less charges paid the faster the building is constructed.
Finally, Van Hinte let the council know that some things municipalities have traditionally been permitted to use development charges for, may no longer be allowed. Notably, this includes using them to fund studies, such as development charges backgrounds studies. This is yet to be confirmed, however.
The bylaw for establishing the projects development charges will be used for will now expire every ten years instead of five, unless the township decides to reestablish a new bylaw and conduct another background study.
Mayor Joe Nowak clarified with Van Hinte that development charges collected in the township can be spent anywhere in the township and they are not bound by geography.
The impact of Bill 23 will become clearer as more of its regulations are released by the province.