Burlington shows leadership on Development Charges

On May 21, Burlington City Council took a positive, unprecedented step when it voted to approve reductions to the City’s Development Charge rate. Development Charges (DCs) are a fee charged on new housing by cities and it is used to pay for new infrastructure to support population growth, including transport systems, sewer systems, recreation centres, community spaces and more. However, in practice, this tax on new housing adds tens of thousands of dollars on to the cost of new homes at a time when housing affordability is at its worst. By adding more fees onto the already high home construction costs, builders are forced to raise their prices or are unable to complete their projects – something that negatively impacts home inventory and aggravates the housing crisis.

Feedback from homebuilding industry

The City of Burlington, after taking into consideration the housing crisis and feedback from the homebuilding industry, re-examined projects that were included in the DC bylaw, removing those that are unlikely to be built in the next 10 years. By reducing the DC rate, Burlington has signaled its commitment to meeting its Housing Pledge target of facilitating 29,000 housing units by 2031. Burlington has shown leadership and proactiveness. The City’s willingness to partner with the development industry to create more housing opportunities makes Burlington welcoming and forward-thinking.

Neighbouring cities such as Hamilton, while not reducing rates, have acknowledged the impact of DCs on housing supply and affordability by maintaining programs that provide exemptions for DCs in certain areas of the city, namely downtown districts. The federal government recently made announcements regarding potential additional funding for large cities that freeze DCs to create more housing opportunities. These decisions demonstrate the recognition at all levels of government that new housing supply will significantly help alleviate our housing crisis. Bold steps such as reducing taxes on new homes must be taken to incentivize new construction and increase affordability.

Bold actions

Recent reports from Urbanation identify that the market for new condo construction is the worst it has been since the Great Recession in 2009. This decision indicates a willingness on behalf of the City of Burlington to go above and beyond, while doing its part to relieve the housing crisis. Additionally, the decision to lower DCs will position Burlington to receive federal and provincial funding that is tied to the number of new homes built.

The housing crisis is at a critical point. All levels of government, as well as the private and non-profit sectors need to break the status quo and collaborate on solutions. We must take bold actions to ensure that more homes can be built, and everyone is able to afford a home.