City hikes fees for developers, closes loophole

The City of Ottawa is significantly hiking the fees it collects from new construction to pay for roads, transit and other projects, and is closing a loophole some builders were using to pay lower fees on new student apartment buildings.

New fee structure includes separate class for student apartments

Developers will pay nearly $31,000 to build a detached home inside the Greenbelt, and nearly $25,000 to build a row house. (Reuters)

The City of Ottawa is significantly hiking the fees it collects from new construction to pay for roads, transit and other projects, and is closing a loophole some builders were using to pay lower fees on new student apartment buildings.

Under the new structure, the development fee on a detached house within the Greenbelt will rise by 23 per cent to $30,977, while a row house will cost the builder an extra 28 per cent, or $24,748.

The fees on a single or semi-detached house outside the Greenbelt will rise less dramatically to $36,338.

The bulk of the revenue will go toward roads and transit, but the steep increase in urban areas is specifically meant to cover new parks planned at such locations as Westgate Shopping Centre, Scott Street and Heron Gate.

The city has $7.5 billion in projects planned for the coming decade, of which one-third could be covered by development charges. The money pays for most of the arterial roads and water mains in new suburbs and other growing areas.

When fees have fallen short in the past, projects on the city's to-do list have been pushed back, such as the widening of the Airport Parkway or realignment of Greenbank Road in Barrhaven.

Student apartments treated as nursing homes

The new fee structure also closes a loophole that had been bothering Rideau-Vanier Coun. Mathieu Fleury.

According to Fleury, the builder of a student apartment building on Rideau Street paid development fees at a rate intended for retirement homes, then built a tower where units have no kitchens.

"This is a small niche group that just doesn't want to pay what they should be paying in development charges, and in the end we have less desirable units," Fleury said.

Coun. Mathieu Fleury says some developers were using a loophole to avoid higher fees for student apartments. (Radio-Canada)

The city collected $4.4 million for that student apartment tower, but would have earned nearly $1 million more under a new category created for rooming units.

Extra fees for roads in Barrhaven, Stittsville

Residents in Barrhaven have been waiting for Greenbank Road to be realigned to the west and widened, but the city has no money for it and pushed it off until 2030, while it widens Strandherd Drive instead.

Coun. Jan Harder acknowledged some 35,000 people live in homes that were built on the premise that Greenbank would be fixed, and are frustrated by having to use an old bridge and by a lack of bike paths.

Barrhaven has seen a lot of development south of the Jock River, but residents haven't seen the fix to Greenbank Road they were promised when they moved in. (Kate Porter/CBC)

She proposed staff look at a special charge on new developments in Barrhaven to speed up the Greenbank project.

Coun. Glen Gower made a similar pitch to collect extra fees to extend Robert Grant Boulevard to serve new neighbourhoods in Stittsville, a project that's not on the books until after 2031.

Provincial changes put fees in flux

The new fee structure would typically last five years, and the rush is on to implement them before the existing structure expires June 11. But the city isn't expecting the new fees to stay in place through to 2024.

Last Thursday, the Ontario government threw municipalities for a loop when it announced cities would no longer be allowed to charge development charges for "soft services."

So the fees being approved now are simply a stand-in until the city can come up with an entirely new system for collecting fees for parks, libraries and other amenities communities need.

The city also plans to update the fees for infrastructure such as roads, transit and pipes once it comes up with a new priority list for the transportation links it wants to build.


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