Ottawa increases development fees but how long some of the new charges will ‘stick’ is unclear

Ontario Construction News staff writer

The City of Ottawa has updated its development charges, though it is unclear how much they will need to be revised under new provincial regulations which say cities cannot these fees for soft services such as parks, libraries and other amenities.

Nevertheless Ottawa City Council approved the changes on May 22 because the existing five-year law would expire in early June.

The city also plans to update the fees for infrastructure such as roads, transit and pipes once it comes up with a new priority list for the transportation links it wants to build.

Two studies indicate a total needed capital investment of $7.53 billion over the next 12 years, with $2.42 billion to be recovered from development charges — $1.64 billion from residential development and $778 million from non-residential development, city officials said in a statement.

Development charges under the revised by-law will increase from $25,113 to $30,540 for a new single family house inside the Greenbelt. “Outside the Greenbelt, that charge will increase from $35,047 to $36,388,” the statement said. “These amounts still represent about five to seven per cent of the cost of new homes in Ottawa.”

Most of the revenue will go toward roads and transit, but the steep increase in urban areas is specifically meant to cover new parks planned at such locations as Heron Gate, Scott Street and Westgate Shopping Centre, though the provisions for these parks and other charges were introduced before the province announced its plans to legislate changes to the rules restricting how development charges can be used for “soft services” such as parks, libraries, and other community amenities.

The new fee structure closes a loophole that had been bothering Rideau-Vanier Coun. Mathieu Fleury, CBC has reported.

Fleury said the builder of a student apartment building on Rideau Street paid development fees at a rate intended for retirement homes, before building a tower without kitchens in the units.

“This is a small niche group that just doesn’t want to pay what they should be paying in development charges, and in the end we have less desirable units,” Fleury said in the published report.

While the city collected $4.4 million for the student apartment tower, it would have earned almost $1 million more under a new category created for rooming units.

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