York Region development charges will boost house prices: councillor

Yorkregion.com
March 13, 2017
By Lisa Queen

York Region’s plans to boost development charges on newly constructed homes will make the cost of buying a house in today’s red hot housing market that much more unaffordable, Richmond Hill Coun. Vito Spatafora warns.

But development charges, or DCs as they are commonly called, play only a minor role in housing prices and are necessary to pay for services such as roads, water pipes and sewers and transit needed in new subdivisions, treasurer Bill Hughes said.

DCs are only charged on newly constructed homes, which are passed along to homebuyers. They aren’t charged on resale homes.

With the prices of homes skyrocketing by double digit percentages annually, Spatafora said affordability is a growing concern.

For example, worried seniors can’t afford to buy a place to live on their fixed incomes, he said.

But DCs aren’t the main culprit for driving housing prices up, Hughes said.

“What we see is that development charges are actually not that big a share of the price of housing, regardless of which class we’re talking about. It’s in the order of 3 to 4 per cent I think for…singles and semis and for the small and large apartments, it’s more like in the order of 5 to 6 per cent.,” he said.

“And it’s been declining as a result of the escalation in housing prices. So, I guess the short answer is the things that are driving the affordability problem in the housing market are relatively independent of development charges.”

New services have to be paid for somehow so if the fees aren’t charged to the buyers of newly constructed homes, existing taxpayers would have to pay, Hughes said.

The region is expected to bring in a new bylaw in June that would increase DCs on detached and semi-detached by $5,502 to $48,139.

Multiples such as townhouses would inch up $1,445 to $38,745.

Large apartments more than 700 square feet would increase $2,627 to $28,161, while small apartments less than 700 square feet would climb $1,747 $20,555.

Non-residential DCs for retail, office, industrial, institutional and hotel developments are expected to stay the same or decline under the incoming rates.