Quinte home builders protest rising development charges

Quinte Home Builders Association president Gord McCrady (left) speaks to city council about why they should not raise development charges as much as a new study recommends. Councillors Kelly McCaw, Egerton Boyce and Jackie Denyes (far right) listen with the rest of city council. Photo by Joseph Quigley, QNet News

By Joseph Quigley

BELLEVILLE – The Quinte Home Builders Association lobbied Belleville city council at a special meeting Monday night to limit increases to development charges.

A background study, delivered at the meeting, recommends that the city increase the charge to build a home in urban areas from $9,614 to $11,379. These charges are estimated to help Belleville recoup $44.3 million over the next 10 years for capital costs.

But several members of the association told council that this increase – nearly $1,800–  is too much. The builders propose that development charges rise to $10,300 – an approximate $700 increase.

Development charges are costs that developers pay to a city to build or expand within that city. These fees help pay for city services and infrastructure that accommodate that growth, such as increased requirements of police or fire services due to larger population.

Gord McCrady, the president of the Quinte Home Builders Association, said these charges are built into the cost of the home, which hurts housing affordability.

“Quinte Home Builders Association wants to ensure Belleville remains competitive and be able to provide reasonable and affordable housing,” McCrady said. “All of our members are currently doing everything they can to reduce the cost of building new homes. We hope the City of Belleville will do the same.”

Watson and Associates Economics Ltd., a finance consulting firm which specializes in development charges, prepared the study for the city. The company projected the city’s future growth over the next twenty years and how the city could pay for costs coming from that growth.

In addition to increasing development charges on urban homes, the study also suggested raising the price from $4.19 to $4.53 per square foot for non-residential development.

A breakdown of the costs for city services that make up the development charge increases. “SDU” refers to “single dwelling unit,” which is a standard unattached house. Rural development in areas where Belleville does not service water have reduced charges, represented by “Total-City Wide Services.” Photo courtesy City of Belleville

But the increase for development charge were substantially higher last year.

Last year, Watson and Associates Economists Ltd. recommended Belleville increase the charge to $17,858 for a single urban home, but council rejected that and decided to freeze the rate for a year to allow for more discussion on the issue.

Coun. Paul Carr asked Andrew Grunda, who presented the report to council on behalf of the finance firm, the reason for reducing the charge recommendation from $17,858 to $11,379.

“Last time you were here I asked you a question with respect to (the) 2014 study,” said Carr. “I asked you at that time, whether that figure accurately reflected the cost of growth and your answer was ‘yes.’ Now we see different figures. Can you break down, in very specific terms, the factors that resulted in that adjustment?”

Grunda said it is primarily due to the discovery of $17 million in unused funding that the city has collected with previous development charges.

Eric DenOuden, a member of the Quinte Home Builders Association, said the city has not been accountable enough for how it spends this money.

“We’re really looking for accountability and transparency with the funds collected,” he said. “We’re asking the city to complete some of the projects that have been put before you over the years. To use some of the $17 million that’s in reserve. Can the city even afford their (budget contribution) towards those projects?”

Coun. Mitch Panciuk said he was troubled that builders felt the city was not doing its part to fund capital projects.

“It is a little disturbing to hear, certainly, that you (the builders) feel that way,” Panciuk said. “We certainly don’t like our customers feeling that way.”

City council is scheduled to vote on development charges in its meeting next week.

McCrady said he is not sure which direction council will go on the issue.

“We’re not 100 per cent sure on that. I think there’s some councillors that understand where we’re coming from and some that think the city needs the money.”