Housing charity says school board development fees hurt Hamilton's low-income families

A local non-profit developer of affordable housing says school boards' educational development charges are forcing Hamilton's low-income families to wait longer to have a place to live.

Indwell, the charity building the homes, says the issue is the fees are a flat rate per residential unit. That means a sprawling suburban home in Ancaster is charged just as much to build as an small, affordable one-bedroom unit in downtown Hamilton.

As the non-profit developer focuses on building projects with small units, it has asked the school boards to scrap the fixed fee to make it easier to build affordable housing.

"It is disproportionately burdensome on people in poverty," Jeffrey Neven, Indwell's executive director, says.

Indwell says fixed rate is the problem

The Hamilton Wentworth District School Board (HWDSB) forces developers to pay a fixed educational development charge of $1,339 per residential unit, while the Catholic board's (HWCDSB) flat fee is $1,101 per residential unit.

Indwell paid $97,295.36 last year in educational development charges to build a property with 50 residential units at 256 Parkdale Ave. N.

All of that money, Neven says, came from charitable donations.

He thinks isn't fair to taxpayers and to the people who need the homes most.

"While we're not advising the board on how they could set their fees, what we're saying is they need to have an equity lens on the burden and cost their policy is having on people with little to no financial means."

Hamilton's 2020 operating budget documents show 6,231 households are on the waiting list for social housing.

Neven hopes if it can't be exempt from the fees, the fees could at least change to something proportionate to the size of the unit — similar to how the boards charge non-residential developers a rate per square foot of gross floor area.

School boards can't afford more land without charges

Patrick Daly, chair of the HWCDSB, says switching from a fixed rate for residential units would be "administratively impossible."

"It would be extremely challenging to have a variable rate for different sizes of homes ... the flat fee is meant to compensate for very, very large houses and smaller [homes] and those that would be in the affordable housing area."

The HWDSB and HWCDSB say the money from the fees goes toward buying more land to build schools and aren't allowed to move money around to compensate for it.

"The challenge is we don't have a mechanism to recoup those lost dollars,"  Ellen Warling, the HWDSB's manager of planning, accommodation and rentals, says.

"I would have a hole in my EDC by-law pot of money and wouldn't be able to fund the land for the school I need to buy."

Each board consulted a third party firm to create a report and host public meetings to determine the respective fees.

School boards have a provincially-imposed cap on the amount of money they can raise the charges by, but the boards have the power to decide whether they levy a flat fee or not.

Some developers can be exempt from paying the charges, but affordable housing isn't eligible.

Daly understands why Indwell is complaining, but says the current method is "reasonable and fair" and wouldn't "put undue burden on the purchaser of the property."

Indwell and school boards to face off at Tribunal in may

Indwell initiated an official challenge to the boards policies and presented its case before the Local Planning Appeal Tribunal (LPAT) on Tuesday where it asked to get rid of the flat rate.

Graham Cubitt, Indwell's director of projects and development, says the adjudicator at the LPAT advised both parties to find a fix by meeting directly rather than through another hearing, scheduled in May.

At the next tribunal, Indwell would need to provide a panel of experts who can speak to the problems and strategies moving forward — but therein lies another issue for the charity.

"A lot of developers also hire the same planners as we do and if you're building single family homes that have the same EDC rate, there's a conflict of interest for some of the planners in terms of who their clients are," Cubitt says.

Cubitt says Indwell may be looking to speak with both boards outside of the LPAT hearings to find a solution.

Neven says while this issue is especially bad in Hamilton, with Indwell receiving about five affordable housing applications a day, the EDC problem affects communities across the province, since all schools in Ontario operate with the fixed fees.