May 6 - Over the Top: The Impact of Development Charges on New Homebuyers

May 6, 2008

BILD Development Charges Report 

DOWNLOAD THE REPORT (PDF)

Report: Skyrocketing GTA Development Charges Threaten Dream of Owning a New Home
Uploading, infrastructure funding needs to happen fast

TORONTO (May 6, 2008) - A new report from the Building Industry and Land Development Association (BILD) says skyrocketing development charges threaten to push the cost of homeownership out of reach for many families in the GTA.

"We've concluded that the dramatic increase of development charges across the Greater Toronto Area is excessive, unsustainable and counterproductive," said Michael Moldenhauer, President of BILD. "We sympathize with the fiscal constraints facing the municipalities as a result of downloading, but the answer does not lie in further downloading onto home buyers.

"Over The Top," a groundbreaking report by BILD, in collaboration with housing market analyst Will Dunning, has pulled together for the first time development charges data collected from GTA municipalities. The report, available online found that since 2001 the average development charges have increased by more than 6.5 times the rate of inflation. The current charges in the GTA means another $30,000 added to the  cost of a new home - the equivalent of a new family car.

"These hidden taxes in the last seven years have tripled and even quadrupled in some areas," said Mr. Moldenhauer. "These increases are pushing the cost of a new home out of reach for many buyers, while eroding affordability and choice for others."

The report found eight GTA municipalities more than doubled their development charges for single-family homes:

  • In the City of Toronto, fees quadrupled - a 342 per cent jump - in the last seven years.
  • When compared to the overall inflation rate for Ontario since 2001 (up 11.7 per cent), the average development charge increase in the City of Toronto (up 337 per cent) has outpaced inflation by 29 times
  • In Brampton, average development charges are the highest in the GTA for a single-family home, representing an additional cost to consumers of $35,398.
  • In 10 municipalities across the GTA, including Newmarket, Markham and Vaughan, the total development charges are adding more than $30,000 to the price tag of a new home.
  • Charges in the Township of King jumped by 215 per cent.
  • Increases in the towns of Halton Hills and Scugog hover around 130 per cent.

The report notes the root problem facing new homebuyers is inadequate municipal funding. Faced with social service costs downloaded from the province, municipalities are beginning to view these development charges as a revenue "tap" that is draining home buyers of their ability to pay. Some communities are pressing for even more increases through a review of provincial legislation.

"We recognize that GTA municipalities require revenues from development charges to help offset infrastructure costs resulting from new growth," said Mr. Moldenhauer. "But the present situation is simply unfair. Communities have been forced to increase development charges to unsustainable levels for new homebuyers."

BILD is calling on the Ontario government not to make the problem worse for families and individuals looking to enter the housing market by re-opening legislation that will allow further increases.

It also wants pressure on municipal budgets to be relieved by the uploading of social services back to the province, and for all three orders of government to work in partnership to adequately and fairly fund municipal infrastructure so it can keep pace with population growth.

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About BILD
Established in 1921, the Building Industry and Land Development Association serves more than 1,500 member companies engaged in residential land development, home building, professional renovation and all related supply, service and professional industry segments.. More information is at www.bildgta.ca.

For more information contact:
Cynthia Malagerio, Manager of Communications
(416) 391-3450 or (416) 951-4081
communications@bildgta.ca