The Town of Collingwood will be approving a new development charge bylaw later in August.
Here’s what you need to know.
What are development charges?
Development charges — or DCs — are levied against new construction. Those levies are put into specified reserve accounts to fund the construction of infrastructure (roads, sidewalks, recreational facilities) that will be needed at some point in the future to accommodate growth. For instance, increasing the number of residential units in a certain neighbourhood could require improvements to local roads to accommodate the increase in traffic. Some of the funding (but not all, because some improvements would be seen to benefit the existing population) for those future road improvements would come from development charges.
Specified reserve accounts?
DCs are broken down into components. For instance, on a levy for a single family home ($30,006), $7,461 is directed to the account that would fund future road-related projects.
In order to enact a DC bylaw, a municipality needs to undertake a study that forecasts what kind of infrastructure it needs in the future to accommodate growth over the next 10 years. It also takes into account life-cycle costs of infrastructure. To use our road example, Collingwood’s DC study identifies that road-related projects will require $81 million over the next decade, of which $43 million would be eligible to be funded through DCs.
What are the proposed rates?
The DC for a single family home will be $30,006; a multiple-unit dwelling, such as a townhouse, would be $22,632 per unit, an apartment would be $18,025 per unit, and the rate for bachelor or one-bedroom apartments would be $10,445.
The current rate for a single-family home is $24,572 — which would make for a 22 per cent hike.
Are there DCs for non-residential development?
The background study proposes a rate of $142.24 per square metre of commercial and industrial space — a 107 per cent increase from the current rate. However, noted Jaclyn Hall of Hemson Consulting, the town’s consultant on the DC background study, the current rate, indexed to 2019 dollar figures, would be $145.05.
Why the big increases?
As Hall noted in her presentation, construction and land costs have outpaced inflation. Municipalities are also doing a better job at asset management.
Council also has the option to implement lower rates or discount certain classes.
Where does Bill 108 fit in?
The Province of Ontario enacted Bill 108 in June. This is an omnibus bill that affects 13 different pieces of legislation, including the Development Charges Act.
Under the act, a municipality is required to pass a community benefit bylaw to collect levies for services such as libraries, parks and other recreational facilities.
After Jan. 1, 2021, only roads, water and other “hard” services will be eligible for development charge funding.
What are the next steps?
Anyone who wants to give their opinion can drop a line to the town’s deputy director of financial planning and policy development, Dennis Sloan, at email@example.com, by Aug. 2.
A new development charge bylaw is expected to be approved by council on Aug. 26.
by Ian Adams
Ian Adams is a reporter for Simcoe.com, covering community news and events throughout south Georgian Bay, and municipal councils in Collingwood and Wasaga Beach.Email: firstname.lastname@example.org