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Thursday, December 5, 2019

Fee Holiday Ends For New Residential Developments in Owen Sound

Owen Sound | by Matt Hermiz  

City council passes new development charges by-law with reduced rates, exemption for rental apartment builds.

Owen Sound will begin collecting development charges on residential builds again, but not fully-calculated rates.

City council passed its new development charges by-law at its meeting Monday, setting fees of $8,000 for single and semi-detached units. A motion to pass the by-law as recommended by staff at fully-costed rates -- nearly $12,000 for new singles/semis -- was defeated. Coun. Richard Thomas then moved the new terms with the lone change being fees set approximately 35 per cent lower.

"I think a lot of us felt that stepping in at a $12,000 development charge after a five-year holiday was maybe a bit excessive," Thomas says. "Especially when you look at Georgian Bluffs, our nearest neighbour, having no development charges at all."

"We'd like to keep the builders in Owen Sound and keep some development going."

Coun. Carol Merton was among those who was not in favour of a reduced rate in the new development charges by-law. 

"With the reduction from max to $8,000, it does mean that some of it does get downloaded to our taxpayers," Merton says. "Obviously, that's a concern for me. And what I'm hearing from the taxpayers is it's a concern for them as well."

Development charges are fees paid on development to fund “growth related” capital costs for municipalities.

Some growth-related projects the city is partly funding with development charges are a portion of the 10th Street Bridge replacement, increased services anticipated for growth in the city's east end and future solids storage at the wastewater treatment plant.

Several builders appeared before city council last month to lobby for a continued moratorium on development charges or to freeze them at 2015 rates.

The fees set by council are not quite a freeze, but only slightly above rates determined in 2015.

Owen Sound had not been collecting city-wide development charges from residential builders since 2015 to help spur growth.

Owen Sound Mayor Ian Boddy says the moratorium in place the past four years succeeded in driving growth, but it is time to bring back development charges.

"It removes some of the cost of growth from the taxpayers onto the new homes joining the city," Boddy says. 

While there is no longer a fee holiday for residential developers in Owen Sound, the new by-law does include a new incentive. Purpose-built rental apartment units will be exempt from paying development charges.

"I think it's an acknowledgement there is not a lot of housing available in Owen Sound for renters," Thomas explains. "And we would like builders to start focusing on apartment development if possible."

According to a report prepared by Hemson Consulting Limited -- retained by the city to assist with the new bylaw and do a background study -- the city's new development charge bylaw collects for projected capital expenses related to engineering for roads, water, sewer and stormwater services and indoor recreation -- to recover some debt payments with the Julie McArthur Regional Recreation Centre.

Owen Sound's Director of Corporate Services Kate Allan says $9.8-million remains on the Julie McArthur Regional Recreation Centre debenture with about 20 years left to pay it down. Fees collected through development charges are expected to contribute about $2.5-million towards the debenture over time.

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