BrianNSara
11-17-2008, 08:08 AM
CAMBRIDGE - New home prices will have to go up to cover the soaring costs of the city building roads and sewers to handle the growth.
City staff want to immediately increase development charges on homes by 25 per cent, from $9,743 to $12,151. Including Waterloo Region and school board fees, the new total development charge would hit $20,933.
City fees on apartments would increase 27 per cent, from $5,847 to $7,455. All in with region and school charges, new fees would reach $12,824.
For commercial and industrial buildings, city staff propose a 40-per-cent jump. For 100 square metres of floor space, the fee jumps from $1,780 to $2,504. Adding the regional charge, the new fee would total $7,685.
The money goes into a reserve fund to pay for growth-related costs, like widening roads or building new trunk sewers. Developers pay for roads and pipes as part of building subdivisions.
The city staff report on the development charge increase is available for download here.
Development charges are set based on the estimated cost of building the infrastructure. In the last year, however, big projects have come in over budget, sending the development charge reserves into deficit,
Jim Kirchin, planning director, told council this week.
The $500,000 sanitary sewer to serve the Mattamy Homes subdivision in Hespeler almost doubled in cost because of troublesome soil conditions. The sewer planned along Moffat Creek into southeast Galt came in at 10 times the initial estimates. Bidders on the project asked for $8.7 million to $17 million to do the job, which prompted council to defer the job until next year, with hopes of getting a lower price.
Coun. Karl Kiefer asked if council’s no debt policy was at the heart of the problem.
That has nothing to do with development-related costs, Kirchin said. That’s intended to be totally covered by development charges fees on new construction, not taxes.
The development charges hikes will be directly passed along to new home buyers, said Coun. Ben Tucci.
He worried about the impact on realtors trying to sell homes.
“Especially in today’s environment, with credit hard to get and home prices dropping, have we talked to them about what the impact would be?”
The city has not talked to realtors, but it has had ongoing meetings with the Waterloo Region Homebuilders Association, Kirchin said.
“I think generally the homebuilding community never wants to see a cost or fee increased . . . but if we don’t have money in the funds, there is no development,” Kirchin said.
Dave Aston, speaking for the homebuilders, thanked staff for the “positive experience” found in recent meetings explaining the increases.
Homebuilders are worried about this increase coming very close to an automatic inflation increase planned for Jan. 1. Aston said builders don’t want to get caught by a surprise increase after swallowing this one.
A final development charge recommendation will come back to council for a vote in December.
City staff want to immediately increase development charges on homes by 25 per cent, from $9,743 to $12,151. Including Waterloo Region and school board fees, the new total development charge would hit $20,933.
City fees on apartments would increase 27 per cent, from $5,847 to $7,455. All in with region and school charges, new fees would reach $12,824.
For commercial and industrial buildings, city staff propose a 40-per-cent jump. For 100 square metres of floor space, the fee jumps from $1,780 to $2,504. Adding the regional charge, the new fee would total $7,685.
The money goes into a reserve fund to pay for growth-related costs, like widening roads or building new trunk sewers. Developers pay for roads and pipes as part of building subdivisions.
The city staff report on the development charge increase is available for download here.
Development charges are set based on the estimated cost of building the infrastructure. In the last year, however, big projects have come in over budget, sending the development charge reserves into deficit,
Jim Kirchin, planning director, told council this week.
The $500,000 sanitary sewer to serve the Mattamy Homes subdivision in Hespeler almost doubled in cost because of troublesome soil conditions. The sewer planned along Moffat Creek into southeast Galt came in at 10 times the initial estimates. Bidders on the project asked for $8.7 million to $17 million to do the job, which prompted council to defer the job until next year, with hopes of getting a lower price.
Coun. Karl Kiefer asked if council’s no debt policy was at the heart of the problem.
That has nothing to do with development-related costs, Kirchin said. That’s intended to be totally covered by development charges fees on new construction, not taxes.
The development charges hikes will be directly passed along to new home buyers, said Coun. Ben Tucci.
He worried about the impact on realtors trying to sell homes.
“Especially in today’s environment, with credit hard to get and home prices dropping, have we talked to them about what the impact would be?”
The city has not talked to realtors, but it has had ongoing meetings with the Waterloo Region Homebuilders Association, Kirchin said.
“I think generally the homebuilding community never wants to see a cost or fee increased . . . but if we don’t have money in the funds, there is no development,” Kirchin said.
Dave Aston, speaking for the homebuilders, thanked staff for the “positive experience” found in recent meetings explaining the increases.
Homebuilders are worried about this increase coming very close to an automatic inflation increase planned for Jan. 1. Aston said builders don’t want to get caught by a surprise increase after swallowing this one.
A final development charge recommendation will come back to council for a vote in December.