Chatham-Kent development charges prompting home builders’ association to take action

A local home builders’ association is ready to take action to oppose current development charges adopted by the Municipality of Chatham-Kent last year that adds $17,300 to the cost of a new single-detached home.

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But the Chatham-Kent Home Builders’ Association (CKHBA) would prefer to negotiate a solution, said executive officer Dan VanMoorsel.

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An application is going before the Ontario Land Tribunal, but VanMoorsel said a hearing won’t be held until well into 2024 at the earliest. The matters adjudicated by the OTL include land use planning, land valuation, land compensation and municipal finance.

In the meantime, he said the CKHBA has been told council and administration has been advised not to discuss the issue with CKHBA because they are “suing” the municipality.

“We can work together and come up with a decision outside of the land tribunal,” VanMoorsel said. The OLT recommends both sides to try to solve their problems without them, he said.

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With a housing crunch, and a provincial mandate to build 1.5 million new homes in Ontario during the next decade, VanMoorsel said adding $17,000 to somebody’s house payment, especially with today’s rising interest rates, “changes things dramatically.

“We should be striking when the iron’s hot,” because there’s land available for development and people want to develop, he said.

VanMoorsel said the development charge is having a “significant impact” on the advantage Chatham-Kent with lower home prices over most of the province.

He said some local home builders have been losing deals since the new development fee was passed.

Jeff Bultje, a partner in Multi Construction, said he lost three deals shortly after the new charges were implemented.

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If his company had built those homes, Bultje said, “The taxes paid would have made up that $17,000 development charge in 2.5 years.”

He said adding $17,000 to the cost of a home is “a big hit.”

According to the report presented during the Aug. 8, 2022 council meeting, Chatham-Kent plans to spend $37.85 million during the next five years on growth-related infrastructure, not including water and wastewater.

Having the new development charges in place will provide $26.24 million to help cover those costs, leaving $8.33 million – or $1.67 million annually – to be collected from property taxes or other sources of funding.

The report noted development fees will help cover infrastructure costs, such as new roads, and also can contribute to the expansion of police, fire and ambulance services, libraries, parks and recreation and waste diversion that will be needed to accommodate growth. Some funds will also be earmarked for future growth studies.

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The CKHBA doesn’t feel it was properly notified about the new development charges, which were approved by council at its Aug. 8, 2022 meeting.

VanMoorsel said the association had been in previous discussions with municipal staff to minimize the negative impact on housing affordability a development charge would have for residents.

The CKHBA shared a proposal that balanced the needs of the municipality with that of new home buyers, but didn’t feel the municipal staff gave the proposal due consideration, he said.

“We implored council members to meet with the stakeholders and discuss a balanced DC (development charge) model that will provide more certainty and predictability for future residents of Chatham-Kent,” VanMoorsel said.

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He said the CKHBA was under the impression it would be notified of when the new proposed development charges would be publicly posted.

“I guess for all intentions and purposes, the municipality only really has to put it in the newspaper,” VanMoorsel said.

He added no one in CKHBA saw the notice.

“As the largest stakeholder in that whole report and repeatedly asking for it, you would have thought someone would have said, ‘Hey guys, it’s out. Have a look.’”

The objections raised after the new fees were passed prompted council to support a motion by Chatham Coun. Michael Bondy last October to seek improved stakeholder consultation.

Chatham-Kent council recently turned down a provincial government offer for the municipality to have strong-mayor powers.

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The powers include allowing mayors to propose housing-related bylaws and pass them with the support of one-third of councilors, and override council approval of zoning and other bylaws that would prevent the creation of more homes.

However, in an effort to secure funding for new homes, council agreed to submit a housing pledge to the provincial government by the December deadline.

The CKHBA was hoping council would adopt the strong-mayor powers to reduce red tape and having the flexibility to make housing more affordable.

A Chatham-Kent media release received Oct. 11 stated the majority of Ontario municipalities have implemented development charges, and many have charges that are significantly higher than those in Chatham-Kent.

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“In fact, of the 50 municipalities that have recently been assigned specific housing targets by the province, 48 of them have development charge by laws in place, including Chatham-Kent,” municipal officials said.

The release also noted Chatham-Kent has instituted a number of supports for the construction of more housing units in the community, including a community improvement plan that has resulted in several multi-residential projects being constructed during the last few years.

“While housing is absolutely needed in the province, all levels of government need to consider and balance who pays the costs of that growth,” municipal officials said. “Ensuring that funding is available for growth-related infrastructure through development charges, and ensuring the necessary infrastructure can get built, directly supports housing in our community.”

The release added: “As the homebuilders and some other local developers have instituted a legal proceeding against this bylaw, it would not be appropriate for the municipality to provide further comments at this point.”

“All we’re asking for is some middle ground,” VanMoorsel said. “You don’t have to give us anything. We just have to have a realistic cost to new homeowners.”

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