Development charges rest on a shaky foundation |
A December report from the Canada Mortgage and Housing Corp. found that Toronto had the most expensive development fees, making up 9 per cent of the total cost of a detached home in the city.Sean Kilpatrick/The Canadian Press
In cities that rely on development charges, an unquestioned dogma underpins the debate over funding levels for the infrastructure needed to support new housing. This is the notion that “growth pays for growth,” meaning that new residents ought to pay for the water pipes, roads, transit, and community centres – to name a few examples – that one must often build when one adds new homes.
That’s the justification for imposing a wide array of municipal fees on the construction of new homes. In Toronto, where development charges have risen by almost 600 per cent in a decade, they now add more than $100,000 to the price of a newly built home, in some cases.
Both city administrators who defend the status quo and critics – including the federal government, builders and some housing advocates – who argue the fees are too high generally accept the premise that growth must pay for growth.
But it is a shaky idea at best.
The origins of it date back to........