Meeting on Tuesday, Greater Sudbury city council agreed to freeze development charges this year, as well as to look at revising the way the charges are calculated.
Builders in the city have long complained the charges are pushing home prices beyond what residents can afford. Currently, they stand at around $15,000 per home, and don't include other fees, such as contributions for sidewalks and street lighting.
The theory behind development charges is the fees help pay for infrastructure required to service the new home construction. They help pay for projects such as Maley Drive and the South End Library.
The charges soared from about $3,000 per home to more than $14,000 in 2009, at a time when the city's housing market was red hot. Since then, commodity prices have slumped badly, along with home construction in the city. Developers began building more apartment buildings, where the fees were lower.
Rates have been frozen for more than two years. Ward 10 Coun. Fern Cormier, who introduced the motion Tuesday, said the freeze wouldn't turn the housing market around on its own.
“This is certainly not a silver bullet or .. a cure-all,” Cormier said, describing more as a “modest gesture.
“It's a positive message to send to our development community.”
Ed Stankiewicz, the city's acting chief financial officer, said freezing rates again this year would mean they would have to increase by more than $2,000 in 2018 and 2019, to reach the $17,163 per home approved in the 2014 bylaw.
Ward 7 Coun. Mike Jakubo pointed out that by delaying the increase, the pain for developers will be worse in the next two years.
“So we may find ourselves in this very position next year,” Jakubo said.
That's because under provincial rules, a new study is required – as well as public meetings – to change the current increases, which would cost about $50,000, Stankiewicz said.
Jakubo said it may be worth doing another study to take another look at how development charges are applied. For example, he would like to see them used to encourage businesses to develop certain areas of the city.
“There has to be a way for these development charges” to be used to encourage infilling, he said.
And another development charges study would allow them to set different rates for the next five years.
But Ward 5 Coun. Bob Kirwan said the money the city gets from development charges will have to be made up by homeowners if council decides to ease the burden on builders.
“At some point, our tax levy is going to go up,” Kirwan said.
Councillors approved the freeze and will get a report in the coming months on what conducting a new study would involve.
