Erin ordered to refund $5 million after development charges appealed
Settlement removes $74.5M from from eligible growth costs as town rolls back rates
ERIN – The Town of Erin must refund $5 million to developers after reaching a settlement in a dispute over how development charges were calculated.
The charges — levied on new residential units and commercial development — are a municipal tool used to fund growth-related infrastructure, shifting much of the cost of accommodating growth away from existing taxpayers.
Six developers — Mattamy Homes, Coscorp, Empire Communities, Hillsburgh Heights, Beachcroft Investments and National Properties — took Erin to the Ontario Land Tribunal over how much they had to pay the under a town bylaw updated in July 2024.
Coscorp has a subdivision planned on 8th Line, proposed to contain 434 units, and Mattamy’s portion next door could contain 194 units.
Also along 8th line is a 306-unit development proposed by Empire Communities.
Hillsburgh Heights and Beachcroft have respectively proposed 369-unit and 933-unit developments on Trafalgar Road.
National Properties, along with Northern Capital and Solmar Development, is behind the ongoing Erin Glen subdivision.
Among 31 issues raised, the group complained the Erin bylaw, based on a $73,783 Watson and Associates background study, implemented an increase in charges that was unfair, excessive and illegal.
The bylaw raised the development charge for an urban single or semi-detached unit with water services by 54% (from $33,437 to $51,403).
The charge for a rural single or semi-detached build without water services was increased by 28% (from $25,083 to $32,159).
Mediation
In December, the town agreed to substantially reduce the charges during a three-day mediation with the developers, which were represented by three law firms.
The settlement, approved by the land tribunal on June 9, ultimately focused on six areas: fire services, parks/recreation, roads, public works, water and a growth forecast.
Hardest hit were town-wide projects, which do not include water services. Charges that fund parks/recreation, fire, roads and public works projects were reduced or outright eliminated.
Based on a complete urban build-out, roughly $67 million was reduced from the amount that could be recovered through development charges, with water projects taking a $7-million hit.
Roughly $74.5 million in total was dropped, shifting those costs onto the tax base or water users, or potentially forcing delays and cancellations of infrastructure projects.
New charges
For a rural single or semi-detached unit, the total development charge was nearly halved to $16,497, from $32,159 in the appealed bylaw.
For an urban unit, it drops to $33,199 (down 35% from $51,403).
Compared to rates in place prior to the appealed 2024 bylaw, the rural charge ends up about a third lower.
But the urban charge barely changes. Water charges more than doubled under the bylaw and mostly survived the settlement, offsetting other reductions. So builders pay close to what they did before, but with more going to water services.
“The settlement was not what the developers wanted, not what we wanted, but we came up with something somewhere in between,” Erin Mayor Michael Dehn told the Advertiser.
Having less development charge revenue up front may delay projects benefitting new homeowners, Dehn said. But he downplayed the impact, saying future homeowners will pay one way or another.
“It’s all taxes, or user fees or other grants from the government,” Dehn said.
Refunds
As part of the settlement, the town was ordered by the land tribunal to issue refunds — totalling just over $5 million, according to the town — to developers that paid elevated charges during the appeal period, retroactive to July 2024.
The town is calculating its total revenue reduction resulting from the appeal, and hasn’t identified specific projects that are now underfunded or unfunded.
“The town is thankful that the appeal has come to a resolution after a year and a half of discussion and negotiations,” Erin spokesperson Alexandra Jagoe stated in an email.
As of May 31, the town has spent $387,879 related to the appeal.
None of the legal firms representing the developers — WeirFoulds; Davies Howe; and Cassels, Brock and Blackwell — responded to requests for comments.
Watson and Associates managing partner Byron Tan also did not respond to requests for comment.
