Development Charge overhaul

Cities used to develop organically. Once streets were laid down and divided into lots, neighbourhoods developed through general consensus. Noisy and smelly industrial areas were generally built away from residential areas and as cities expanded they relied heavily on businesses to provide the needed services and amenities. Nowadays, businesses pay a shrinking share of revenues to the city. To replace those lost revenues, Toronto uses development charges applied when new homes and businesses are constructed. Here are the amounts the city charges for new residential units.

Single homes & Semis $87,299

Multiples 2+ Bedrooms $72,158

Multiples 1 Bed and Bach. $36,198

Apartments 2+ Bedrooms $51,103

Apartments 1 Bed and Bachelor $33,358

Dwelling Room $23,660

These charges are applied regardless of the size of the home or the value of the land they are built on. For example, a detached 10,000 square foot Rosedale home built on an acre of land pays the same development charge as a 1200 square foot semi-detached in Rexdale. A luxury three-bedroom penthouse pays the same as a two-bedroom ‘affordable’ apartment. This doesn’t seem fair and may explain why some areas of the city lack appropriate services and amenities.

Readers have often wondered why developers need apartment buildings to be so much taller in Weston than in more affluent parts of the city. Development charges may be part of the reason.

Also under review is the Alternative Parkland Dedication Rate along with Section 37 charges. The idea behind Section 37 was to compensate for shoddy and overbuilt architecture by having the developer ‘donate’ to, for example, a community art project. One notorious example is the Nictophilia installation at Eglinton and Weston. Another is the exercise equipment in Cruickshank Park. The danger with this type of funding is that the local councillor’s hands are all over the project and it can end up appearing as a ‘gift’ from the councillor. Another problem with Section 37 funding was that the money generated was dependent on the value of the project. Downtown projects generated huge amounts of Section 37 money while our neck of the woods received token amounts. Read more here on the various charges or ‘Growth Funding Tools’ as the City now calls them.

The Province is asking for public input. Sadly, because I was slow in writing this article, two public information sessions have come and gone but it is not too late to provide input to the city by emailing [email protected]

6 thoughts on “Development Charge overhaul”

  1. Thanks for this information and your analysis, Roy. Very helpful in understanding what’s going on.

  2. Section 37 (and its cousin section 42) are part of a shell game played by local councillors, the Province and developers.

    Developers can opt to pay cash-in-lieu as a way of bypassing official planning rules.

    If you think this sounds like a kind of semi-official way for developers to bribe the City… You’re not alone in that thinking.

    Theoretically, the funds are to be used to offset the local environmental impact of a specific project.

    In practice, the funds are not well tracked and lack accountability. They can be used for just about anything after the fact.

    It’s not unheard of for a “Section 37 contribution” attached to a project in a poor area, being repurposed to benefit a completely different neighbourhood.

    Despite being ethically questionable… This is quite legal and (internally) is considered completely normal and acceptable.

  3. Ahhh, “Ethics”.

    What a relative concept..
    “Presto, change-oh!”

    Any wonder why many of us carry an over-abundance of cynicism when it comes to politicians and their rhetoric, in general? (And some, more experienced and skilful at it than the others?)

    Thx, Roy.

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