Home Builders’ Association head hopeful for compromise after city approves development fee hike

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The head of the Greater Ottawa Home Builders’ Association says he is hopeful his group won’t have to go to the Ontario Municipal Board to fight a city council decision to raise development charges.

John Herbert of the Greater Ottawa Home Builders' Association.

by Tom Pechloff

Council approved the higher rates Wednesday, saying they are needed to fund growth in the city for the next 10 to 17 years. Under the changes, development fees on some houses could rise by more than $5,000.

GOHBA executive director John Herbert says his group will continue negotiations with the city in hopes of an increase smaller than the 31 per cent council approved, but it is also preparing an appeal to the OMB that would have to be heard by July 21.

Mr. Herbert says a smaller increase would definitely be a step in the right direction.

Who do you know who got a 31 per cent increase in salary in the last six months?” he said. “We’ve seen over the last few years, fewer and fewer people, millennials in particular, who can afford a home and more and more of them are staying at home. When you look at it statistically, over the last 30 years, the 25 to 29-year-olds, the percentage remaining at home has increased by 123 per cent.”

The fees are intended to help pay for services and infrastructure such as roads at new developments, as well as projects such as light rail. Builders generally pass on fee hikes to homebuyers, meaning house prices will go likely go up.

Home prices in Ottawa rose 58 per cent between 2005 and 2011, Mr. Herbert said, but millennials’ salaries have increased just six per cent.

“We’re seeing this affordability gap widen with each passing day,” he said, adding taxes, charges, fees and levies on new homes have risen from three per cent of the total cost to 23 percent in the last 25 years.

“We’re talking hundreds of thousands of dollars that young families could use to invest in a business, to create new jobs, to put their kids through university, to build a more productive society,” he said. “There are much bigger social, financial, cultural implications to this than just the cost of a new home.”

Increases in development charges

Detached and semi-detached houses (per unit):

Inside the greenbelt: $5,068 increase, from $16,891 to $21,959

Outside the greenbelt: $5,517 increase, from $25,315 to $30,832

Rural (serviced): $3,603 increase, from $16,082 to $19,685

Non-residential (per square foot):

Commercial: increase of $1.76, from $17.88 to $19.64.

Limited industrial: increase of $0.25, from $8.22 to $8.47

Organizations: OMB

Geographic location: Ottawa

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