Doubling of Peel development charges to spike new home costs

Sep 24, 2012 | News

The Peel development charge will affect newly built homes in Brampton, Caledon and Mississauga. The plans take effect Oct. 4. COURTESY MISSISSAUGA NEWS

By: William Kee

First-time home buyers who had their minds set on settling down in the GTA may have to consult their banks.

The Region of Peel council has passed a 99 per cent increase in development charges on single-family residential homes being built.

According to an article in the Toronto Star, councillors out of Mississauga, Brampton and Caledon voted for an increase on newly developed homes, bringing the value from $17,830 to $35,532, effective Oct. 4.

The development charges apply not only to single-family residential homes, but also small and large apartments and condominiums, non-residential-industrial homes and other non-residential development homes. The charge does not apply to homes with construction permits or those in the planning stages.

“Peel Region is a vibrant and culturally diverse community that keeps growing at a fast pace,” Emil Kolb, regional chair and CEO, said in a Peel Regional Council news release. “Council’s approval of the Development Charges By-law will allow the Region to adequately fund growth at a managed pace over a 20-year period.”

The development charges are levied to help in financing capital infrastructure associated with growth, including sewers, brides and roads, according to a Mississauga News article.

Phil King, president of the Orlando Corporation, was on the development industry working group that advocated against Peel’s sharp increase.

“Affordability of homes is a huge concern. A more than $17,000-a-unit increase on a single family home is a large number to accept, ” said King, addressing council last Thursday, according to the Star. “It’s the first time buyer that gets hit the most.”

Damian Bartolomucci, manager of digital communications at the Insurance Bureau of Canada, is surprised by the rate hike.

“That is an unbelievable increase, and it’s going to affect a lot of people,” Bartolomucci told Humber News. “If the DC rates are the same as in Toronto, I’d rather live in Toronto.”

King and the Orlando Corporation have not yet decided if the case should be appealed at the Ontario Municipal Board, according to the Star, but Bartolomucci said he hopes an appeal goes through.

“I think the revised [development charge] rates are too drastic an adjustment for it to have just a subtle effect on the market,” said Bartolomucci. “As a home buyer right now, that would hinder my efforts to look in that region.”

“Staff has given us all kinds of financial statements proving that development is not paying its way,” said Mississauga Mayor Hazel McCallion, in a Mississauga News article. “It’s not my opinion here. The facts are on the books. We are going into debt in a big way at the Region of Peel.”