Rather than proceed with an automatic 9.9-per-cent 2023 development charge increase on July 1, city council is scheduled to instead vote on a proposed rate freeze next month.
Per a successful motion by Ward 4 Coun. Paulin Fortin at Monday’s city council meeting, city administrators are preparing a report on the potential implications of a rate freeze.
The city’s elected officials are slated to vote on the proposed freeze during a city council meeting scheduled for June 27.
“We are in the midst of a housing crisis,” Fortin said. “Rising the rates by 9.9 per cent will not help the situation.”
This year’s 9.9-per-cent rate hike first came up in late March, when a report was included on a finance and administration committee meeting agenda explaining the increase.
Development charges are indexed according to the Statistics Canada Quarterly Construction Price Statistics (non-residential building construction index). With no such statistics available for Sudbury, the inflationary change for Ottawa is used. The increase from December 2021 to 2022 was 9.9 per cent, which the city is also ascribing to its development charges increase.
Back when the development charges bylaw was drafted pre-pandemic, Fortin said she suspects no one at city hall could have predicted the construction index increasing by such a degree seen in recent years.
Ward 11 Coun. Bill Leduc raised concerns about this year’s 9.9-per-cent rate hike in March, but did not table a motion for an alternative rate change at the time due to what he described after the meeting as a lack of support around council chambers.
Although Fortin’s motion received unanimous support from city council during Monday’s meeting, it doesn’t mean the rate freeze is guaranteed to be ratified on June 27.
During her remarks, Ward 9 Coun. Deb McIntosh clarified that she was supporting the motion because of the information it will provide city council, at little cost to the city.
There are numerous exemptions and incentives to spur the development of affordable housing, multi-unit residential developments and intensification of existing housing, among other things, McIntosh said, citing these efforts as “strategic exemptions and reductions to encourage specific types of development in our city.”
Development charges are used to pay for growth-related infrastructure. If not for development charges, she said these expenses would be covered by the general tax base and user fees.
A development charges freeze was put in place in 2016, McIntosh said, but it wasn’t clear whether it had a positive effect on development of the day. Charges increased again in 2017.
“I’m not so certain there is any strategic value in freezing the (development charge) rates at this time,” McIntosh said during Monday night’s meeting.
Last year, around the time city council approved a 2022 development charge hike of 17.2 per cent, a similar debate regarding whether local development chargers are unreasonable took place. That year’s rate hike followed the same formula as this year’s proposed increase.
At the time, Greater Sudbury’s development-related charges were on the low end of the scale in Ontario as a whole.
A BMA Management Consulting Inc. report noted the average development charge for a single detached family was $40,217 among 114 Ontario municipalities. The average development charge was $19.98 per square foot for non-residential commercial development and $11.76 per square foot for non-residential industrial.
Even if Greater Sudbury were to implement this year’s 9.9-per-cent rate hike, local development charges would still fall below the provincial averages recorded in 2021.
With this year’s proposed rate hike, the city’s new development charges would be:
- Single Family Dwellings: $24,356 per unit (up from the current $22,162)
- Semi-Detached Dwellings: $19,569 per unit (up from $17,806)
- Multiples and Apartments: $14,057 per unit (up from $12,791)
- Industrial: $4.07 per square foot (up from $3.70)
- Non-Industrial (Commercial/Institutional): $6.11 per square foot (up from $5.56)
The public component of the June 27 city council meeting is slated to begin at 6 p.m. It can be viewed in-person at Tom Davies Square, or livestreamed by clicking here.
Tyler Clarke covers city hall and political affairs for Sudbury.com.
