Alex Cullen: A Big Hole In Housing

(Letters to the Editor)

Ottawa Citizen

Dear Editor:

Ontario Municipal Affairs & Housing Minister Steve Clark, in his op-ed article in the March 4 Ottawa Citizen, says that lowering building fees (aka development charges) would make housing more affordable. In fact, his government, under Bill 23, cut municipal development charges substantially to do just that. But it then begs the question of who is going to pay for the infrastructure (roads, sewers, etc.) that development charges paid for.

Development charges have been around for decades, based on the principle that growth should pay for growth. It is new home buyers who benefit from the provision of the required infrastructure who pay their share through these charges, rather than existing homeowners through property taxes. Development charges are highly regulated by the Province and must reflect actual costs - their calculation by municipalities can be appealed to the Ontario Land Tribunal. And not all development charges recover 100% of the costs of infrastructure to support a new community, meaning that for some (eg libraries, parks) there is a municipal tax contribution as well.

The result of cutting development charges leaves a huge hole in how new housing will be built, as most municipalities will be loath to subsidize new homebuyers through property taxes to pay for the infrastructure that supports new housing. Unfortunately Mr. Clark, in his op-ed article defending his government's actions, does not address this issue. The consequence, however, of not replacing these funding source that pays for roads, sewers, water, etc., that supports new housing, is that little new housing will be built, at a time when the need is critical. How will this be addressed, Mr. Clark?

Alex Cullen