Comment
Hard cash
The County has had a peculiar relationship with development charges. Not in the quirky or oddly amusing sense of the term, rather more in the every-steplands- in-another-bucket meaning.
Development fees are new-ish to the County. The general idea is that development charges (DCs) are assessed by the municipality and paid by developers to expand things like roads and waterworks or libraries and parks. Specifically, their purpose is to fund the growth of municipal capacity to accommodate the additional humans that development implies—so the burden doesn’t fall upon existing residents, who presumably have bought, paid for and maintained their existing infrastructure. That is the notion anyway.
The province was compelled, after some hijinks and shenanigans in some corners, to put some order to the patchwork of development fees across Ontario in 1997 and set rules about how they were assessed, collected and used.
Prince Edward County, however, didn’t get around to imposing DCs until ten years later. It had had its hands full wrestling ten sets of zoning, planning and such regulations into one set of rules. So the County’s development charges regime—such as it was—came into effect in 2008. Just in time for the housing market collapse. Banks
around the globe failed, credit markets froze solid, and the Great Recession set in. Bad timing.
New home starts fell 16 per cent in Prince Edward County the year after it adopted DCs, 29 per cent the next year and 32 per cent the following year. The new home building market only bottomed out in 2012 when the County saw fewer than half the new homes from the peak in 2007.
An important side note: While the County adopted some DCs for roads and such in 2008, it sidestepped these regulations for waterworks connections. These fees were gathering significantly more revenue than allowed under the Province’s Development Charges regulations. (One can detect the whiff of hijinks.) This wasn’t fixed until 2017.
In 2012, the County finally relented to the collapse of the new home building sector, discounting DCs by half—for certain kinds of new homebuilding—in a late and desperate attempt to breathe new life into the sector. Those discounts remained in place until 2019.
It was at this moment that Council discovered DCs were more than a source of revenue— but could also be used as a currency. DCs have since been used as currency to spur private investment for a range of public purposes, from affordable housing to docks around Picton harbour.
But as Council learned last week, what it thought was a non-cash carrot—meaning it didn’t have to borrow or add it to the tax levy—actually means hard currency. It is an important lesson.
Some context: The municipality will fund the owner of Tip of the Bay up to $250,000 for repairs and restoration of the docks and boardwalk around this property. Some folks believe the County should renege on its commitment—that the terms and owners have changed since the deal was struck. This would be shortsighted, counterproductive and likely fruitless.
The owner of this property has invested energy and resources into improving this public space. Moreover, they have contracted with the municipality to operate the adjacent marina properties. They are partners with the municipality in the redevelopment of these assets and their efficient operation. They have worked with the municipality in good faith and transparently. We need more partnerships like this. We can’t afford to burn them.
Ultimately this public money will be invested in public assets—for the benefit of all. Furthermore, it is surely invested and employed more efficiently than could be done by the municipality on its own.
So the issue here isn’t with the deal or the owner of the property, but rather the difficult lesson that DCs are real money. When Council chooses to discount DCs or invest future fees into public infrastructure today—it must be clear about the goods and services being exchanged, the terms and conditions— as if it were using cash.
They know this now.
It all gets more serious when it comes to the special arrangement devised for Wellington. Last year, Council approved a special and distinct development charge to fund about $100 million in waterworks expansion and renewal in the village. Part of this unique arrangement is that developers will pay some of the DCs upfront (that is before homes are built rather than when the individual building permit is issued).
Many months have passed, and details about this arrangement remain opaque. We need light into this arrangement. Who is paying what? For what? What are the terms? Discounts?
Residents understand that mistakes happen. They get that some lessons must sometimes be learned the hard way. What they don’t understand is when questions are raised, and few answers are forthcoming. It makes the mistakes harder to accept.
Comments (0)