South River is showing there may be occasions when it pays not to have development charges in a municipality.
Municipalities with development charges collect fees from developers to help cover the cost of infrastructure that will provide municipal services to homes going up.
Examples are new roads, water and sewer, and even the addition of having more people in a community who place pressures on existing services, such as police and fire.
South River's clerk-administrator, Don McArthur, says the small community has seen a bit of growth in the last couple of years, “and I think all of that is due to not having any development fees.”
It's also a statement backed up by Deputy Mayor Doug Sewell, who strongly believes the lack of development fees has triggered the small increase in new housing in the community.
McArthur says during the last two years, the tiny village has seen three quadplexes go up, each with four units, in addition to three single-detached family homes.
McArthur interacts with the public when people come into the town hall and acknowledges people trying to build a home already face plenty of additional costs.
“So another fee like a development charge upfront can be quite substantial,” he said.
“But I've had people comment to me that they're quite pleased they've been able to move forward in South River without that added (development charge) burden.”
McArthur says an important element to getting by without development charges, so far, in the village is that all the construction that has taken place involved fill-in projects.
“So if there was already a vacant lot or a business was looking to expand, the footprint was already there,” McArthur said.
“From the village's standpoint, that type of development doesn't put a huge strain on our resources or requires us to build new roads or new sidewalks or water mains.”
But McArthur notes that if South River was ever faced with a proposal to build an industrial park or an entirely new subdivision, the infrastructure costs associated with that type of project would mean town council would have to revisit the no development charge policy.
“For that, we would have to rethink our approach,” McArthur said.
“That type of development would require more roads and more maintenance in the long term. Usually, a large-scale development like that would see the developer absorb those costs. But once it's finished and once it's turned over to the municipality, the costs become the village's costs. And you want to make sure you're not adding a burden to the existing tax base by taking on new costs.”
However, McArthur adds this is not a situation the village faces, at least not yet.
And on the plus side, the addition of the new homes to date, with more likely expected in the near future, “assists our tax base without putting an additional burden on it.”
Rocco Frangione is a Local Journalism Initiative reporter who works out of the North Bay Nugget. The Local Journalism Initiative is funded by the Government of Canada.