My comment was pretty vague but yes, I was referring to the funding for this coming from external sources including the provinces program for lowering DC.
It’s a funding program that needs to be applied to, and the pool of money is handed out based on the criteria on that page.
None of this prevents the province from ordering a municipality to lower their DCs based on their whims. That’s a fear in the municipal asset management world throughout the country: capacity upgrades have been delayed and delayed to keep spending down, and with the push for housing the provinces are targeting DCs and are like, “too bad lol”.
It means, development charges aren’t getting houses built, and we’re in a housing crisis to go along with the cost of living crisis, health care crisis, etc etc that we’re in. Something’s gotta give, or we’ll see an increasing homelessness crisis. I’m all for a better alternative, but as a society we’re also allergic to increasing taxes.
I think we have a fundamentally different understanding of DCs and I’m not sure either is 100% correct because it’s not a simple problem.
The DC is a charge to the developer. They are profiting from the improvements to the land that the municipality does, so this is a cost recovery for the investment the municipality did. If, for example, your municipality was building a sewer to your area you as the homeowner would have to pay for the connection on your land. This, in turn, increases the value of your property.
It’s effectively an incentive to the developer to build in areas where it doesn’t cost them as much to build, maximizing profits. There is no mechanism to force a decrease in house prices or rent. If the municipality charged the purchaser directly, then it would lower costs to them, but the infrastructure needs to be built whether individual homes sell or not so that’s not a great method.
This is going to make the infrastructure gap worse. Municipalities won’t be able to attract developers if they are charging appropriate DCs, so they will be forced to lower the DC and either raise taxes and/or utility rates and fees to keep things running and build for expansion. Or they won’t build for expansion and just cross their fingers.
If you read the Bearspaw feeder report you can see that Calgary was putting off expansion because of all the capacity savings the trend towards water saving devices gained. Those days are over. Municipalities all over the country are hiting this hard capacity wall and they have to build. But because of the direction the province is taking with DCs and overriding rejected development applications (because of infrastructure limits) we are all going to suffer so that developers can make more money.
I don’t have the solution to the housing crisis but I don’t think it’s “entice developers by making it more profitable to develop in your areas while redlining your infrastructure”.
The solution is raise taxes, but people’s heads explode when that gets brought up. And no, not “tax the suburbs more”. Taxes don’t work like that. So the core doesn’t vote for increased taxes because they don’t want to subsidize the suburbs (they don’t), and the suburbs don’t vote for increased taxes because the taxes they already pay aren’t getting them the infrastructure they need.
Take some of the rural parts of Ottawa, for example. They pay the same residential taxes as you or I, and their infrastructure absolutely sucks. However, they pay lower fees for things like transit. The logic is, because they have little or no access to transit, they should pay little or no transit fees. No. Charge the transit fees, and get transit built. And then increase the damn taxes to pay for the rest of the infrastructure.
We’re on the same page for sure, but I do want to flag that the City of Ottawa has special levy areas where they do charge more taxes to cover hyper local costs. The easiest way to see this is the GeoOttawa overlay layers on the topic (under misc > property taxation boundaries)
Looks like there is just one right now but I know I’ve heard of more, maybe they are just in planning?
They also have DCs specific to rural transit! GeoOttwa is one of the best municipal GIS I’ve seen tbh.
This goes back to the idea of DC paying for growth and taxes/rates laying for operation and renewal/replacement.
But yes, we need to stop kicking the can down the road and start paying the actual costs of maintaining our infrastructure.
I know the special areas you’re talking about, but those aren’t typically applied to all of, for example, Nepean or Barhaven or Kanata. For example, Alta Vista used a special levy zone to pay for an arena. The various BIAs are under special levy zones that pay for things those zones need, like marketing. The Centretown BIA is one such rate. A similar rate used to apply to ByWard, before the BMDA was formed and it became a municipal corporation.
Also: Transit is also a specific levy on your property taxes. In rural Ottawa, that levy is lower than it is downtown. Since people who have lived there for 30 years would probably use transit as frequenty as people who’ve lived there for 30 minutes if transit was available, we should try increasing that and making transit available.
BIA levies only apply to member businesses, but yes I get the analogy.
I mentioned the transit DC specifically, because under the current way the long range financial plan (LRFP) is set up the DC is intended to fund the growth of the transit service to the area whereas the property tax levy is to fund operations and maintain the current level of service. It makes sense it’s less in the rural area now while the level of service is lower.
DCs need to be backed by studies and plans, which are subject to provincial scrutiny and approval if I am remembering correctly.
It might be easier to pivot to finding growth via property tax levies (which is what I think you are suggesting) but I don’t know the details of what it takes to change the LRFP, but I imagine the province isn’t going to jump in an say they need to lower taxes. Because that doesn’t help developers 😉
I’d personally love to see Ottawa increase rural transit, it’s been a real treat to be able to drive to the southern end and take the train in 🚇
(Eta: I hope this doesn’t come across as arguing, I am just excited to discuss Ontario municipal structure lol)
My comment was pretty vague but yes, I was referring to the funding for this coming from external sources including the provinces program for lowering DC.
You may be choosing to simplify the description of the program for brevity, but this isn’t an agreement to reduce DC by 50%: https://www.ontario.ca/page/development-charge-reduction-program
It’s a funding program that needs to be applied to, and the pool of money is handed out based on the criteria on that page.
None of this prevents the province from ordering a municipality to lower their DCs based on their whims. That’s a fear in the municipal asset management world throughout the country: capacity upgrades have been delayed and delayed to keep spending down, and with the push for housing the provinces are targeting DCs and are like, “too bad lol”.
Eta: I would encourage people to read this: https://www.calgary.ca/emergencies/feeder-main-repair/bearspaw-feeder-main-independent-review.html
Well… I mean… we are kind of in the midst of a housing crisis, among others.
I don’t understand what this means?
It means, development charges aren’t getting houses built, and we’re in a housing crisis to go along with the cost of living crisis, health care crisis, etc etc that we’re in. Something’s gotta give, or we’ll see an increasing homelessness crisis. I’m all for a better alternative, but as a society we’re also allergic to increasing taxes.
Okay, I see.
I think we have a fundamentally different understanding of DCs and I’m not sure either is 100% correct because it’s not a simple problem.
The DC is a charge to the developer. They are profiting from the improvements to the land that the municipality does, so this is a cost recovery for the investment the municipality did. If, for example, your municipality was building a sewer to your area you as the homeowner would have to pay for the connection on your land. This, in turn, increases the value of your property.
It’s effectively an incentive to the developer to build in areas where it doesn’t cost them as much to build, maximizing profits. There is no mechanism to force a decrease in house prices or rent. If the municipality charged the purchaser directly, then it would lower costs to them, but the infrastructure needs to be built whether individual homes sell or not so that’s not a great method.
This is going to make the infrastructure gap worse. Municipalities won’t be able to attract developers if they are charging appropriate DCs, so they will be forced to lower the DC and either raise taxes and/or utility rates and fees to keep things running and build for expansion. Or they won’t build for expansion and just cross their fingers.
If you read the Bearspaw feeder report you can see that Calgary was putting off expansion because of all the capacity savings the trend towards water saving devices gained. Those days are over. Municipalities all over the country are hiting this hard capacity wall and they have to build. But because of the direction the province is taking with DCs and overriding rejected development applications (because of infrastructure limits) we are all going to suffer so that developers can make more money.
I don’t have the solution to the housing crisis but I don’t think it’s “entice developers by making it more profitable to develop in your areas while redlining your infrastructure”.
The solution is raise taxes, but people’s heads explode when that gets brought up. And no, not “tax the suburbs more”. Taxes don’t work like that. So the core doesn’t vote for increased taxes because they don’t want to subsidize the suburbs (they don’t), and the suburbs don’t vote for increased taxes because the taxes they already pay aren’t getting them the infrastructure they need.
Take some of the rural parts of Ottawa, for example. They pay the same residential taxes as you or I, and their infrastructure absolutely sucks. However, they pay lower fees for things like transit. The logic is, because they have little or no access to transit, they should pay little or no transit fees. No. Charge the transit fees, and get transit built. And then increase the damn taxes to pay for the rest of the infrastructure.
We’re on the same page for sure, but I do want to flag that the City of Ottawa has special levy areas where they do charge more taxes to cover hyper local costs. The easiest way to see this is the GeoOttawa overlay layers on the topic (under misc > property taxation boundaries)
Looks like there is just one right now but I know I’ve heard of more, maybe they are just in planning?
They also have DCs specific to rural transit! GeoOttwa is one of the best municipal GIS I’ve seen tbh.
This goes back to the idea of DC paying for growth and taxes/rates laying for operation and renewal/replacement.
But yes, we need to stop kicking the can down the road and start paying the actual costs of maintaining our infrastructure.
I know the special areas you’re talking about, but those aren’t typically applied to all of, for example, Nepean or Barhaven or Kanata. For example, Alta Vista used a special levy zone to pay for an arena. The various BIAs are under special levy zones that pay for things those zones need, like marketing. The Centretown BIA is one such rate. A similar rate used to apply to ByWard, before the BMDA was formed and it became a municipal corporation.
Also: Transit is also a specific levy on your property taxes. In rural Ottawa, that levy is lower than it is downtown. Since people who have lived there for 30 years would probably use transit as frequenty as people who’ve lived there for 30 minutes if transit was available, we should try increasing that and making transit available.
I think I’m following, but a few clarifications:
BIA levies only apply to member businesses, but yes I get the analogy.
I mentioned the transit DC specifically, because under the current way the long range financial plan (LRFP) is set up the DC is intended to fund the growth of the transit service to the area whereas the property tax levy is to fund operations and maintain the current level of service. It makes sense it’s less in the rural area now while the level of service is lower.
DCs need to be backed by studies and plans, which are subject to provincial scrutiny and approval if I am remembering correctly.
It might be easier to pivot to finding growth via property tax levies (which is what I think you are suggesting) but I don’t know the details of what it takes to change the LRFP, but I imagine the province isn’t going to jump in an say they need to lower taxes. Because that doesn’t help developers 😉
I’d personally love to see Ottawa increase rural transit, it’s been a real treat to be able to drive to the southern end and take the train in 🚇
(Eta: I hope this doesn’t come across as arguing, I am just excited to discuss Ontario municipal structure lol)