Owen Sound gets feedback at development charge public meeting

Owensoundsuntimes.com
May 31, 2023
Rob Gowan

Owen Sound has been presented a study containing a maximum allowable development charge for a single-detached home that is 336 per cent higher than the current develop charge levied by the city.

It will now be up to city council to decide how high it wants to raise the charges, which go toward the capital work required to support new development.

Mayor Ian Boddy said Monday that council members have a lot to think about. He noted that while the city has approved developments containing about 3,000 homes, they have yet to be built.

“We gave out building permits here last year for the value of about $43 million and we were prouder than punch,” Boddy said, before highlighting that the City of Vaughan issued $1.7 billion in permits last year and $2 million homes there are snatched up as quickly as they are built.

“It is a field one day and a subdivision the next and they can sell them like that and they can charge whatever they want for development charges. We have to try and balance that.”

On Monday night, council held a development charges public meeting, where Stefan Krzeczunowicz of Hemson Consulting presented the development charges background study that has been drafted by the firm. The study is required prior to the city updating its bylaw.

In the study, Hemson calculated the city’s maximum allowable DC for a single or semi-detached home at $34,913, over four time more than the current DC of $8,000 charged by the city.

In the study, the calculated maximum development charge for row and townhouse units was $30,724 (currently $6,223) and for apartments was $20.947 (currently $4,919).

For non-residential development, the city’s current rate is $31.04 per square metre, while the new calculated rate for commercial and institutional development was $83.57 per sq. m., an increase of 165 per cent.

The city also currently has specific development charges for water and wastewater in the Sydenham Heights area on the east side that are over and above the base charges. The new calculated maximum rates for the top-up charge are $1,456 (up $283) for single detached and semi-detached, $1,281 (up $369) for other multiples, and $874 (up $153) for apartments. The maximum non-residential DC rate for Sydenham Heights is $15.32 per sq.m. (up $7.09 per sq. m.)

The development charge the city charges for a new single-detached home has been frozen at $8,000 per unit for more than three years. In 2019, when the city last updated its development charges bylaw, the maximum calculated development charge for a single-family home was just under $13,500, but the city chose to only impose development charges for engineered services (roads and related work, water, wastewater and stormwater) and for recovery of debt associated with the Julie McArthur Regional Recreation Centre. Eligible services the city chose to exempt from development charges in 2019 included library, fire protection, police, outdoor recreation, transit, waste collection, as well as the now ineligible growth-related studies. The newly calculated maximum allowable rates include the services the city has chosen to exempt in the past.

Council heard from two developers on Monday, including Rod Rice of Rice Development, whose firm expects to register a plan for a development in the city’s Sydenham Heights area by the end of 2023.

Rice said his company, which is particularly interested in developing attainable housing, recognizes that there have been dramatic increases in costs for both municipalities and developers, but would be “deeply concerned” if the city implemented the full maximum allowable charge.

“I think it is really important to remember it is not really the developer who pays these charges, it is ultimately the homeowner,” Rice said. “That should be taken into account as you are going forward, as we are endeavouring to try to bring new homeowners into the area, that we do everything we can collectively to get the houses as relatively inexpensive as possible.”

Dave Milliner, project development manager for Grey-Dufferin at Flato Developments, said his company supports development charges in order to provide the needed services, but raised some issues with the study.

Milliner said Flato thinks a recommendation to exempt purpose built rentals from development charges for up to two years from zoning and site plan approval, isn’t a long enough window “for development that is on the books.”

“We have two different rental unit apartment buildings in two different phases of our project,” Milliner said. “These apartments are across from Georgian College and the Grey County Sydenham business enterprise centre and they will be highly focused at student rental.

“When we impose DCs in that kind of area, you are going to increase the cost of education ultimately.”

Milliner also questioned the growth projections contained in the background study, which predicts just over 1,000 new homes being built in the city over the next 20 years.

“The correct growth forecast numbers based on development projections are really important for the calculation of a DC,” Milliner said. “You increase that number by maybe 100 homes and that is a huge percentage point swing in the development charge.”

Flato is developing the Greystone Village project across from Georgian College and the Sydenham Campus regional hub, which proposes to build approximately 709 residential units and three commercial blocks in three phases. The proposal includes 119 single-family homes, 141 townhomes, 289 back-to-back townhomes and two apartment buildings with 160 rental units.

Milliner noted they plan to build the 709 residential units over the next decade, which is already greater than 592 units projected citywide over the next 10 year identified in the background study.

“And they will be built in the next 10 years,” Milliner said. “We have invested heavily in the project and continue to invest and time is money as they say, so that window is really important for us to get those homes and those commercial blocks in place.”

Ted Stewart, an Owen Sound resident, recommended the city implement the maximum allowable development charge rate. He said development charges are a small percentage of the overall cost of a home.

“We know the city is falling behind on capital repairs and upgrades,” said Stewart. “This is one of the few chances to get the money for that and add money towards capital expenditures we will have now and for the future.”

Earlier this year, the city began the process of updating its development charge bylaw when Hemson was directed to complete the background study.

Among the reasons identified for the update are a 33.4 per cent increase in costs since the last study in 2019, more growth-related capital works in the city, a desire by council to examine lost revenue from exemptions and discounted DCs, and legislative changes affecting development charges through the provincial government’s Bill 23.

One of the new regulations of Bill 23 is that the development charges must be phased in over five years.

The city already has a development charge exemption for purpose-built rentals, while Bill 23 requires a number of exemptions and discounts for existing rentals, residential intensification, non-profit housing, inclusionary zoning units, new rental housing and affordable and attainable housing. Municipalities are still waiting on provincial direction on what will be considered attainable.

Hemson is recommending the city direct staff to negotiate with developers in Sydenham Heights for the recovery of growth-related capital costs, as new regulations by the province could exempt many of the planned developments from the charges, Krzeczunowicz explained. The city has spent $2.6 million on two sewer extensions to help encourage development in the area.

Along with background on development charges, calculated rates and growth forecasts, Hemson’s report included comparisons with development charges in other areas. If Owen Sound were to implement the maximum allowable, they would be among the highest in the area, behind only Collingwood and The Blue Mountains. Currently Owen Sound is among the local municipalities with the lowest development charges, not counting those that don’t have any. Grey County charges development charges, which are currently $9,183 per single- and semi-detached unit, $6,341 for rowhouses and other multiple residential, $5,281 per apartment and $9.05 per sq. m. for non-residential. Bruce County does not have development charges at the upper-tier level, but some lower-tier municipalities charge them. Bruce County is undergoing its own development charge background study.

The projected timeline for Owen Sound’s bylaw update is expected to see the matter back before council on July 24, when they were expected to go over what the new bylaw will look like, including recommended rates. The updated bylaw is expected to be in front of city council in September at the earliest.