Representatives from the development community took issue with some of the recommendations outlined in the city's Development Charge Background Study during a meeting at City Hall on Wednesday night. Eight public presentations were made in hopes of influencing the new development charges bylaw. PHOTO BY LIAM BERTI
New home development in North Bay is at one of its lowest points in the last 10 years, and developers think they might have a few ideas to address it.
While development charges might not be the driving force behind the dwindling housing development market in town, they certainly aren’t helping.
At least that’s according to the various developers and real estate representatives that turned out for a special public meeting at City Hall on Wednesday night to discuss the recent Development Charges Background Study from city staff.
“There are serious concerns in the community about this and through development charges, we can partly address it,” said Rick Miller of the North Bay and District Home Builders’ Association. “This is one thing that we do have control over, and therefore I think it’s important that we look closely at it.”
With the current development charges bylaw set to expire on December 15, the city is looking at how they should update the current fees and have outlined over a dozen recommendations in their tabled report.
To read more on the Development Charges Background Study being recommended to council, click here: http://www.baytoday.ca/content/news/details.asp?c=65362
With the chambers filled with people from the development community on Wednesday, eight representatives from the various committees voiced their concern with the recent study.
“To try and convince the general public or the building community that development charges don’t have a potential negative impact is, quite frankly, being irresponsible,” said John Lechlitner of Eastview Development Ltd.
The report bases its recommendations on population growth forecasts for the next 10 years, causing many councillors and representatives from the development community to oppose the optimistic prediction.
“We’re not in a slow market, we’re not in a stagnant market; we’re in a declining market,” Lechlitner said sternly. “The problem in North Bay is we haven’t seen any significant growth in recent years.”
Development charges provide municipalities with the power to apply fees to pay for increased capital costs related to growth. They help the city pay for infrastructure such as roads, wastewater services, police services, fire services and transit, to name just a few.
North Bay’s current maximum residential development fee is $9,814, which city staff recommends could increase $4,000 by year five of the new bylaw.
Lechlitner said up until now there have only been 27 new housing starts in North Bay this year, compared to 30 in Sturgeon Falls. He compared those numbers to this time five years ago, when North Bay had 78 new builds, while Sturgeon Falls had 60.
The city was projected to reach approximately 50 new builds in 2014, which the developers say will not be reached by year’s end.
Those who presented almost unanimously suggested on tweaking some of the recommendations. Most notably, in lieu of the recommendation for a two-year freeze on the development fees before a phase-in over the final three years, the developers suggested the current rates be frozen for three years with council reviewing the terms for the final two years of the bylaw.
“A slow painful death; that’s what the staff is really recommending,” said Lechlitner. “Staff are dangling a carrot by saying ‘let’s give a little bit of a deal right now, but we’re going to slam you later on.’
“A year or two doesn’t turn around the industry,” he continued. “It needs a long, concentrated approach to get the building happening in North Bay instead of its surrounding areas.”
Another area of contention was the city’s tiered recommendation to try and encourage entry-level housing development. The report recommends that homes 1,200 square feet or less be charged 60 per cent of the $9,814 development charge rate in effect for detached and semi-detached units.
The developers, on the other hand, think that should be changed to 1,300 square feet.
“We’re not advocating no charges; we’re advocating reasonable charges that will spur development,” said Lechlitner.
Instead of using Sudbury, Peterborough and Innisfil as comparables, as the report does, some developers said the city should instead be looking closer to home to get a better idea. Lechlitner suggested communities such as Sturgeon Falls, Callander, Powassan and Mattawa would be more appropriate instead.
The presenters did, however, commend city staff on recommending that developers defer on payments until a later date, instead of paying when the permit is issued. According to Lechlitner, that alone can lower the barrier for small companies.
“In a community like North Bay, a lot of the developers build two, three, four homes a year; not 100. They don’t have the financial resources to fund that,” he said. “Deferring tens of thousands of dollars is important to a small business.”
The developers all agreed that if development charges were eliminated, it would reduce the selling price of the homes too.
It was stated at the meeting that the city currently holds roughly $2.4 million in their development charge reserve fund.
Many councillors emphasized the need to explore the benefit of not charging development fees altogether, something that hasn't been done until now. Sault Ste. Marie, Timmins and Thunder Bay currently do not levy development charges.
On Wednesday night, Coun. Mac Bain referenced a text message conversation he had with the Mayor of Timmins, Tom Laughren, who told Bain that when the municipality eliminated development fees in the late 1990s it was due to the fact that the city was experiencing no growth. According to Laughren, banishing the charges did add incentive for developers thereafter and spurred growth.
The background study cost the city $40,000 from the development charges reserve fund. The completion of a background study is a mandatory component of passing a new development charges bylaw. At least one public meeting is also mandatory in order to see the new bylaw pass.
The study will now stay on the committee level before council is presented with a final recommendation report some time before October.
