Development charges – what are they?

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by Deron Johnston

For those of you who may be interested in the future development of North Grenville, an important discussion will be taking place this summer that you may not be aware of. This will be about Development Charges, and the current North Grenville bylaw governing them (which is about to expire on Sept 12). The first public meeting about the bylaw will be Wednesday, August 7, at 6:30pm at the North Grenville Municipal Centre.

Why is this discussion important? Development Charges (DCs) are defined as fees collected from developers at the time of issuing a building permit, to help pay for the cost of infrastructure required to provide municipal services to new development, such as roads, transit, community centres and fire and police facilities. Fees for water and wastewater services are slightly different, in that they are payable at the time of the execution of the subdivision agreement.

So, development charges are essential in ensuring that “growth pays for growth”, and that the money needed to build new infrastructure to support this growth does not come out of the municipal budget. Setting the right rates for these DC’s becomes crucial. For example, if they are changed, and are found to be too low, a municipality may not be able to afford to build the new infrastructure necessary for that new development. If they’re too high, it may either drive up the price of new housing, making it less affordable to buy a home, or slow down the amount of residential development because developers may be less eager to build, due to the fact that they make less money on each dwelling.

Currently, if a developer wants to build a single or semi-detached dwelling, the DC to build that dwelling in the Urban Service Area – outside Kemptville service area 1, it is $19,220. For a single or semi-detached dwelling in the Urban Service Area of Kemptville, inside service area 1 (where services exist), it is $8,617. To build one of these dwellings in the Rural Service Area, it is $6,099 (where residents are on well and septic).

By comparison, a single or semi-detached dwelling “Outside the Greenbelt” in the City of Ottawa, would cost $35,047, compared to $19,220 in North Grenville. “Inside the Greenbelt” would be $25,113, compared to $8,617 in North Grenville. “Rural Un-serviced” would be $19,602, compared to $6,099 in North Grenville. Though not exactly an “apples to apples” comparison, there is still significant room to raise DC’s before North Grenville approaches the City of Ottawa rates.

To help the Municipality of North Grenville make an informed decision, they have retained the services of consultant, Watson and Associates Economists Limited, who have created a Development Charges Background Study, which is now available through the municipal website at www.northgrenville.ca.

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