Home-building chill: City, builders looking for a fix

Last summer, the previous city council froze the rates for two years, which were set to rise from $14,785 per home to $17,163 over five years. But they rejected a request to change the city's policy to allow builders to pay the charges when the new homeowner moves in. Currently, they must be paid when they take out a building permit to begin construction.

At Tuesday's city council meeting, Ward 7 Coun. Mike Jakubo said the policy adds to the difficulty builders have in getting financing to start construction.

"I do think what's holding back some development is cash flow,” Jakubo said. “Generally, the developers aren't opposed to paying the development charges, but it's a matter of coming up with that money up front."

Lorella Hayes, the city's chief financial officer, told councillors the policy is in place because the city has no legal means of collecting the fees after a home is built.

"The majority of municipalities collect development charges at the building permit stage, if not earlier,” Hayes said. “The reason for that is that at the occupancy stage, it would be very difficult to enforce collection. And we don't have the tools or the power to ensure that we can collect the fees at the occupancy stage."

However, Guido Mazza, the city's director of building services, said they're working with the Sudbury and District Home Builders Association to come up with a compromise.

"They brought forward a proposal they're formulating with finance (department) right now that would mimic a current practice in Peterborough," Mazza said.

Under the agreement, builders who are members of the association would be allowed to wait until occupancy before paying development charges.

"How we would enforce it is, should one of the members not provide that fee at occupancy, the agreement would be null and void," Mazza said. “So we are exploring options … They're quite happy (in Peterborough) with the legal agreement they have struck with the home builders.”

An update on that process and more information about the city's development charges policy will be part of a meeting scheduled for next month.