As an ordinary, taxpaying…

Commentaire

As an ordinary, taxpaying homeowner, I have not paid much attention to the intricacies of development charges up until the introduction of Bill 23. I have educated myself, however, as best I can, relying on municipal experts to inform my opinions.

Steven Parish, former mayor of Ajax, has 28 years of municipal experience with development charges. In a recent article, he explains that “[d]evelopment charges are authorized by provincial statute to allow municipalities to raise the very large sums of money to build water, sewer, road and other infrastructure necessary to allow growth, both for housing and employment purposes” (The Toronto Star, Dec. 2, 2022). He goes on to say that these charges “are based on the principle that growth should pay for growth – and [should] not be funded by existing property taxpayers.” This makes a lot of sense to me. The infrastructure is necessary, and someone has to pay for it. It seems reasonable that the people benefiting from the growth should be the ones paying for it. Of course, existing property taxpayers continue to pay their property taxes; it’s not like they get a free ride.

Parish goes on to write that the “costs of this infrastructure are calculated based on long-term growth projections with full input from the development industry.” Developers do have input, and costs are based on long-term planning. These charges must, by statute, be spent on what they were raised for and disbursed over the life of the project – often many years. Again, this seems reasonable to me. He reiterates that the “financial oversight is scrupulous” and that the “development industry has the ability to challenge amounts raised … and appeal if they are not satisfied.” So far, so good.

As a result of Bill 23, changes are being proposed to the Planning Act and Development Charges Act to “provide greater cost certainty” (that is contained in the title and description of this posting). However, in a November 28th article in The Toronto Star, Kalinowski et al describe how these changes “will freeze and reduce development fees cities charge developers for the infrastructure to support the residents their buildings will house.” The Association of Municipalities of Ontario estimates “a $5.1 billion revenue shortfall over nine years, including $400 million in lost funding for community housing.” The City of Toronto is warning of a $230 million annual revenue loss in forgone development and parkland charges”; and Mississauga city staff predict “an $885 million loss in revenue” over ten years, resulting in a five percent property tax increase every year for each of those ten years and/or cuts to city services and capital projects. So, it appears that now property owners will be on the hook for the lost revenue after the provincial government freezes or discounts development charges. Growth is no longer paying for growth. City councillor Carolyn Parrish, a political veteran with 38 years of experience, told a Mississauga emergency meeting that “taxpayers are the ones that are going to be hit by hell” (Kalinowski, Javed, Warren, Spurr, The Toronto Star, Nov. 28, 2022.)

I do not for a minute believe that these discounted or frozen charges will result in more affordable housing. There is nothing in the legislation to compel developers to pass these savings on to people purchasing new homes. At a recent Hamilton city hall meeting, “planners hammered home that they don’t believe [this legislation] that includes a softening of development fees will translate into lower housing costs” (Teviah Moro, The Hamilton Spectator, Nov. 30, 2022). Chief planner Steve Robichaud, in a meeting with city councillors, posed the rhetorical question, “Will the purchaser or tenant actually benefit from that?” and went on to answer, “In past practice, the answer is no … [t]he developer keeps those profits and prices stay the same.” Jason Thorne, Hamilton’s general manager of planning and economic development, added that the bill’s sweeping changes are “contrary to balanced decision-making, protection of the natural environment and parkland, building complete communities and public spaces, … and affordable or attainable housing.” In a letter to the council, Hamilton’s general manager of finance and corporate services, Mike Zegarac, characterizes these changes to development charges as “incentives to developers on the back of municipalities” and local taxpayers.

Bonnie Crombie, mayor of Mississauga, states that this legislation “puts our plans to build and maintain parks and open spaces, libraries, fire stations, sewers, roads and public transit that future and existing residents need and deserve on hold.” Toronto city staff warn that “revenue losses would limit our ability to advance the necessary infrastructure to support new housing” which could actually reduce housing supply.

Bruce Macgregor, chief administrative officer of York Region, with more than three decades of public service experience, responded that “changes to the development model will have significant impact on new infrastructure like roads, pipes and sewage allocation that will be needed to accommodate all the growth the province wants cities to approve. There’s an inherent contradiction in a plan that’s premised on accommodating aggressive growth … and then removing the financial wherewithal to deliver the critical infrastructure to do that” (The Toronto Star, Nov. 28, 2022).

The current system, subject to scrupulous financial oversight, involving long-term planning by experts, based on the principle of growth paying for growth, with input from developers that allow them to challenge amounts raised and appeal decisions, seems to be a reasonable system, from my point-of-view as an ordinary homeowner and taxpayer. These changes do not create greater cost certainty for municipalities or for taxpayers. The certainty seems to be directed at developers, who will pay less.

Mike Collins-Williams, CEO of the West End Home Builders’ Association, argues that there’s “smoke and mirrors” in the public discourse about Bill 23 (The Hamilton Spectator, Nov. 30, 2022). I have to say that I agree with him. But I believe that it is the provincial government that is using smoke and mirrors and some sleight of hand – by committing to building more affordable homes faster, and then allowing developers to reap financial rewards both by developing protected Greenbelt land (that’s another story) and by discounting, freezing, or eliminating fees to benefit the same developers, while taking the money right out of taxpayers’ pockets. Except that there are a great many of us that can see what is happening. It is not magic, and it is not acceptable.

The experts are telling you what is going to happen. Taxpayers (and voters) like me are not going to forget who made it happen.