Skip to content

Affordable home ownership project chokes on $1 million city charges

New development fee hikes and other city charges are stopping one developer in his tracks.
120810_BB_tom_corbett_2
The Options For Home condominium project on Mackenzie Street has been stalled by a slow economy and prohibitive city charges totaling $1 million by the time the developer, Tom Corbett, is ready to start the project in 2012. Supplied photo

 New development fee hikes and other city charges are stopping one developer in his tracks.

A $20-million proposed housing project, which would help those with modest incomes have a chance at owning their own condominium units, has run into a brick wall. Local developer Tom Corbett said excessive municipal development fees, totaling $1 million (including tipping fees), are a deterrant.

“This is a significant cost,” Corbett complained at a city policy committee last month. City legal and financial staff will come back to the committee Sept. 22 for recommendations on how they can help the developer, he added.

The city increased its development fees recently to recover more costs for providing future infrastructures services, from libraries to sewers.

Corbett and Jean-Mathieu Chenier, Greater Sudbury Development Corporation (GSDC) business development officer, appeared before the committee to ask for a deferral of payment of the fees for the housing initiative for 10 years, as a way to kick start the stalled project. It is hoped construction could begin by 2012.

I approached the city in February about this. I am not used to waiting this long for decisions.

Local developer Tom Corbett

The project for mixed income families, patterned after an Ontario-wide housing movement called Options For Homes, was initially promoted by GSDC in 2007 as a way of dealing with a housing crisis brought on by recent low vacancy rates, Chenier said. It promotes home ownership of the units and is not a rental arrangement.

Corbett, who has 37 years experience in building projects, was recruited in early 2008 by GSDC staff, Mayor John Rodriguez and Ward 11 Coun. Janet Gasparini to lead a local Options For Homes project. Corbett identified a site near the downtown core on Mackenzie Street and began pre-selling a number of units as part of an 94-unit eight-storey condominium building. The project got final approval in March 2009 from city council, despite objections from neighbours, who said there was not enough parking spaces for the project.

The project was dependant upon pre-selling units prior to securing financing to begin construction, Chenier said. But the economic downturn experienced by the city caused sales of the units to slump, stalling construction.

“You have to sell 85 per cent of the units before you can proceed further,” Corbett said.

The city then changed its policy on development fees for multiple residential housing units. It went from charging $1,859 per unit in 2009 to $5,253 per unit in 2010.

Corbett’s development charges rose from about $175,000 to nearly $500,000 for the building if he was able to build in 2010, Chenier said. In 2011, the development charges will increase to $6,949 per unit and then to $8,636 per unit by 2012.

“My estimates are for a 2012 building season,” Corbett said. “That means I will pay $811,784 in development charges.”

With his $100,000 tipping fees for construction waste and other city permits added in, his charges to the city would be about $1 million, he said.

He said other cities are more supportive.

“In Toronto, a $163-million project in High Park have had their development charges deferred for 10 years, with no interest,” he said. “The city still gets their development charges but they are spread out.”

At the meeting last month, councillors asked city staff to look at ways to help the Options For Homes project. Deferral of development charges and other fees could be a solution.

“I hope they can resolve this soon,” Corbett said. “I approached the city in February about this. I am not used to waiting this long for decisions.”
 


Comments

Verified reader

If you would like to apply to become a verified commenter, please fill out this form.