Developers argue against proposed steep rise in development charges

ELORA – Development charges in Centre Wellington are likely to go up considerably based on a public meeting on Feb. 9.

The township’s current development charges bylaw is set to expire in March, so there will be a new bylaw passed on March 23 one way or another.

Daryl Abbs of Watson and Associates Economists told council there have been some “adjustments” to the proposal since a meeting with developers in January.

But the bottom line is the proposed increase would take development charges for single detached dwellings from $36,003 per unit (including water and wastewater services) to $48,028.

Charges on non-residential units would rise from $11.71 per square foot (including water and wastewater services) to $14.73 per square foot.

Legislation around development charges has changed since 2022 and the current bylaw has to change to be in compliance, Abbs said.

As well, the province has defined “affordable” in Centre Wellington is a single detached home selling for $430,000 or less. A definition for affordable rent is forthcoming but affordable housing is now exempt from paying development charges as well.

To encourage growth, it is proposed that homes within 20 per cent of the affordable prices can pay development charges over six years, which helps a builder with cash flow.

Other building types also exempt from development charges include:

• places of worship or buildings for purposes of a churchyard or cemetery;
• non-residential farm buildings constructed for bona fide farm uses;
• exemption of the water and wastewater residential charges for apartment units located within commercial buildings in downtown Fergus and Elora;
• exemption of the non-residential water and wastewater charges for non-residential development in downtown Fergus and Elora;
• silos for use for industrial, commercial and/or institutional; and
• shipping containers used for industrial, commercial and/or institutional uses.

Development charges are intended to pay for municipal services that have to expand because of growth. They can be used to pay for roads, public works, fire protection, parks and recreation, and growth studies. In urban areas there is also a calculation for water and wastewater services.

Joe Harris, second vice president of the Grand Highland Homebuilder’s Association, urged council to lower the increase and to use development charges to fund core growth items like roads, water and wastewater – and not the extras.

The charges are ultimately paid by the homeowner, he said.

“They raise the price of housing. Now is not the time to increase [them],” he said.

Joseph Puopolo of Polocorp said having different charges for development inside and outside the urban boundary “will create a two-tier system.”

For developments outside the boundary that have to install their own water and wastewater treatment plants, he’d prefer to see the township take that on.

“They are a different animal (from roads) and can’t be done by the developer,” he said. “You should look for more flexible approaches.”

Marcus Gagliardi of Cache Homes, who delegated through Zoom, said the township has moved some infrastructure projects to 2032 and 2035, which is limiting for builders.

He said these timelines make it even more difficult for home builders and open the township to risk.

“There’s risk if growth doesn’t come at all,” he said. “If the builder/developer turns off the taps altogether, your tap will shrink.”

Council did not make a decision on development charges – that will happen on March 23.

In the meantime, the township is still receiving comments, Mayor Shawn Watters said.