Manitoba

Growth-fee hike riles some home builders

Companies that build new homes, condos and apartments are annoyed the City of Winnipeg quietly increased the fee it charges on new residential developments in some neighbourhoods on the fringes of the city.

'They should read the bylaw,' councillor says of 5% fee hike instituted on New Year's Day

The city raised growth fees by five per cent on Jan. 1. Home builders say they were not informed. (Gregory Bull/Associated Press)

Companies that build new homes, condos and apartments are annoyed the City of Winnipeg quietly increased the fee it charges on new residential developments in some neighbourhoods on the fringes of the city.

On Jan, 1, the city hiked its growth fees by five per cent, raising the charge on new developments to $534 from $508 for every 100 square feet of new residential space .

The move was not highlighted in the city budget approved by council last fall. Home-building firms only learned of the hike when developers began applying for permits, Manitoba Home Builders Association president and CEO Lanny McInnes says.

The MHBA — which has already mounted a legal challenge of the city's right to levy growth fees — is now questioning the lack of disclosure as well as the hike itself in what the city calls an impact fee.

"We didn't receive any notification of the increase," McInnes said Friday in a telephone interview. "While we continue to ask for this to be reviewed by the courts, we hope there would be some transparency from the city."

According to the growth-fee bylaw approved by council in 2016, "the fee amounts increase on Jan. 1 of each year by the rate of construction inflation for the previous year, as determined by the chief financial officer," City of Winnipeg communications manager David Driedger said via email.

They should read the bylaw. It's in the bylaw, it's right there. Unfortunately, they were surprised. Nothing was hidden.- Coun. John Orlikow

That bylaw also caps  annual increase at five per cent a year, he said.

Former MHBA president Mike Moore, who still represents the organization and the Urban Development Institute as a consultant on its legal challenge of the growth fee, questioned the basis for the hike.

"How is five per cent construction inflation calculated? Because inflation certainly isn't five per cent," Moore said in a telephone interview on Friday.

Council property chair John Orlikow (River Heights-Fort Garry) said the hike should not have come as a surprise to developers.​

"They should read the bylaw. It's in the bylaw, it's right there," Orlikow said. "Unfortunately, they were surprised. Nothing was hidden."

The city collected $4.1 million in growth fees in 2017, Driedger says. And, according to the city budget, it expects to collect $11 million this year.

The cash will remain in a reserve account until the legal challenge concludes, council finance chair Scott Gillingham (St. James-Brooklands-Weston) said at budget time.

The home builders filed affidavits in this challenge in November. The city has yet to respond, Moore says.

In the meantime, the city continues to meet with developers to determine how to expand growth fees to industrial, commercial and retail developments.

One such meeting has taken place and a second is planned, Orlikow says.​

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