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Ford Government will delay reducing development charges

Province will audit development fee reserves of some cities

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Housing Minister Steve Clark has announced he will delay the portion of Bill 23 that would have reduced development charges levied by municipalities on new housing projects. In a letter to the Big City Mayors and AMO Clark said the government will delay development application refund requirements by six months to take effect July 1 2023 instead of January 1. But Clark also reiterated the government’s determination to reduce development feeds. Writing, “our decision to reign in unsustainable and out-of-control municipal fees on new homebuyers is the right thing to do, and that is why our position on Bill 23 will not waver.”

During the six month delay in the development fee freeze implementation the government will conduct third-party audits of selected municipalities “to get a factual understanding of their finances, including their reserve funds and development charge administration. Together, we can use this process to get the facts, make improvements, and better serve taxpayers by exploring alternative tools for growth to appropriately pay for growth rather than continuing to raise development fees on new homebuyers.” The Ontario Homebuilders Association issued a news release yesterday calling for such an audit, suggesting the idea has been in the works for a while. The Builders Association says GTA municipalities have about $6 Billion in development charge funds and the size of the reserves is growing annually.

Clark also suggests municipalities can offset the reduction of development charges by tapping into the Federal government’s Housing Accelerator Fund. Without providing details.  Clark suggested Bill 23 can be made revenue neutral to municipalities, writing “we are committing to ensuring municipalities are kept whole for any impact to their ability to fund housing enabling infrastructure because of Bill 23.”

Municipalities use the development fees to pay for roads and sewers for new subdivisions, but Luca Bucci of the Home Builders wrote, “why have certain municipalities spent far less than they have collected, every year for more than a decade and why are municipalities crying poor over changes intended to help bring housing affordability back to Ontario? However, at a City of Hamilton Planning Committee meeting this week, Chief Planner Steve Robichaud told councillors there’s nothing in Bill 23 to compel builders to pass savings onto buyers

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