Development Charges in the City of Ottawa are set to increase, inside the greenbelt and outside of the greenbelt.
The City of Ottawa is hiking the fees on new home construction by 11 per cent, a month after the federal government introduced new funding tied to municipalities freezing development charges.
Council approved a plan to increase development charges by $4,700 to $6,200 on new single and semi-detached homes.
"We looked closely at the situation and I think the idea of freezing development charges at this time is very challenging for us," Mayor Mark Sutcliffe said after the council meeting.
Under the plan, the development charges on single and semi-detached homes inside the Greenbelt will increase from $43,494 to $48,265, while they will increase from $51,376 to $57,596 on homes built outside the Greenbelt.
The new development charge fees will be transitioned in over 90 days.
The development charges are one-time fees levied on new residential and non-residential properties to help pay for infrastructure, including roads, water and sewer infrastructure, transit and parks.
Ottawa's move to increase development charges comes after the federal government launched the new $6 billion Canada Housing Infrastructure Fund in April, which requires municipalities to freeze development charges for three years to qualify for funding.
"I hope we still get the infrastructure funding, but we have to calculate are we better off freezing development charges and losing out all the revenue that we would need from that to build better communities – are we better off doing that to get the infrastructure money or are we better off foregoing the infrastructure money and having the development charges.
Clearly, by a significant amount, we are better off increasing development charges to pay for the infrastructure in new communities than we are in accessing the infrastructure fund."
Patrick’s Comment on this news.
The city’s number one source of revenue is property taxes, so if development charges are frozen, property taxes would need to be increased to pay for the new infrastructure.
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