City “way overcharging” for building permits: councillors

If city staff stopped collecting building permit fees today, they could still run the office for two years – a clear sign the city is overcharging, according to Coun. Allan Hubley.

by Emma Jackson

The building services office has $35 million in the bank, but only $18.6 million is needed for 2016, according to the draft 2016 budget.

With housing starts down 25 per cent over two years, the city can’t afford to gouge its developers, Mr. Hubley said.

“We have a (homebuilding) industry in trouble here that is a major job provider for our city,” he told Tuesday’s planning committee.

Mr. Hubley pushed staff to report back ahead of next spring so builders can plan for the construction season. He’d also like to temporarily reduce fees for a year to see if it can indeed stimulate the economy.

Building permits cost between $0.26 to $1.39 per square foot of a new home’s gross floor area, while renovations cost $11 per $1,000 of the project value.

The fees have been held at those rates since 2014. Planning manager Michael Mizzi said he’s already started reviewing fees, because it’s clear the office is keeping more than its spending.

John Herbert, president of the Greater Ottawa Home Builders’ Association, was hesitant to cheer for the prospect of lower fees – in fact, he worried reducing them too much could impact how quickly city staff can complete the permits and inspections necessary to keep his members on schedule.

The real barrier, Mr. Herbert said, is the city's raft of other development charges. They're generally higher than in neighbouring municipalities, so builders are courting places such as Kemptville and Rockland where "they're welcomed with open arms," he said.

And that creates a vicious cycle for the capital: development money goes to a cheaper city, but its residents use Ottawa’s transportation network free of charge to get to work downtown.

Regardless, Coun. Stephen Blais said permit reductions could at least spur some local economic activity, particularly for small-scale projects.

“Even a small reduction might be a tipping point (to convince a homeowner) to get that renovation or house expansion,” he said.

It was a busy meeting as the committee approved zoning amendments that could pave the way for a 26-acre redevelopment in Old Ottawa East.

The Regional Group wants to redevelop the former Oblates land at 175 Main St., creating 916 residential units in low- to mid-rise buildings. The plan also calls for 35,000 square feet of commercial space, almost three acres of parkland, as well as an open-space corridor, multi-use pathway and seven new streets.

The Old Ottawa East Community Association has had considerable input into the development, which will be called Greystone Village, and generally supports the plan, according to a city report.

The committee also approved the Uptown Rideau Street Community Design Plan.

- with files from OBJ Staff