Development levies/fees in HRM

[halifaxboyns]

(from the Herald online)

Builders will oppose new home fees in HRM

By BILL POWER and MICHAEL LIGHTSTONE Staff Reporters
Wed, Sep 14 - 4:54 AM
Proposed new fees for builders of homes and apartment buildings in Halifax were described Tuesday as an unacceptable cash grab on the part of the municipality.

"If the municipality is having financial problems, it should get its own house in order before adding hundreds of dollars to the cost of buying a home," Paul Pettipas, executive director of the Nova Scotia Homebuilders’ Association, said in an interview.

Consultants working for the municipality have recommended new fees — $2,000 for each home and $1,600 for each apartment — to cover the expansion of fire protection, library and recreation costs in newly developed areas.

There is also a 90-cent-per-square-metre fee for non-residential uses.

The new fees would generate about $3.5 million for the municipality.

Pettipas made his comments just hours before Halifax regional council agreed by a 17-1 vote to ask the province to amend its municipal charter so city hall can move ahead with the new fees.

If the province agrees, it could still be years before the legislation is changed, Richard Butts, the city’s chief administrative officer, told council.

A consultant’s study says growth in Halifax Regional Municipality "should pay for itself" and not burden existing taxpayers.

Capital cost contributions are paid by developers "and are intended to recover the growth-related portion of infrastructure that is needed" in a particular area, says the report.

Coun. Sue Uteck (Northwest Arm-South End) opposed sending the request to the Dexter government because she feels the municipality needs more input from the local development sector.

Pettipas said builders of homes and apartments in the municipality will oppose the new fees every step of the way.

The rest of the story is here.

[halifaxboyns]

I would also add this as part of the discussion - from CBC Calgary from a few months ago

City eyes higher fees for urban sprawl
The City of Calgary is proposing suburban housing developers pay higher fees to cover the cost of city-delivered services such as water and sewers.

A proposed new five year development agreement would result in developers shouldering more of the cost of servicing new communities - costs developers say will be passed on to consumers who buy homes in new suburbs, boosting new home prices by several thousand dollars.

The levy will double to more than $15,000 per house.

Mayor Naheed Nenshi says the higher fees better reflect the cost of bringing services like roads, sewers, water and police to those communities. Right now he says new communities actually cost the city millions of dollars.

"Every single new house costs $10,000 to $15,000 more than we ever get back in the taxes on that house and we build 5,000 of them every year." he said. "So we can't do it any more. We have to come up with an agreement that is more fair so that we can pay for water and sewer and transit and roads."

Rest of the story here.

[worldlyhaligonian]

Makes sense, if you are dropping $500,000+ on a McMansion, what's $2000 going to mean. These people already are subsidized by us on the peninsula.

I'm against sprawl and in favour of high density peninsular development... HRM should be kicking back money to those who live closer to downtown!

[someone123]

Problem is that unless the article is wrong, the proposed fee structure won't actually promote development that is less costly to service. The proposed apartment fee is 80% as high as the house fee even though apartments are much cheaper to build and service on average than houses. A $2000 fee will similarly hit low-end, first time homebuyers much harder than the people buying expensive-to-service Kingswood-style McMansions.

The HRM should impose fees based on where a new development is located and what it needs in terms of new services. The regional centre (Peninsula + inner Dartmouth) should be exempt from the fees to encourage urban infill that will be good for the city's bottom line. The exurban McMansions will have to pay their way, which is only fair. To reduce the pain of the fees they should be brought in gradually. As they grow there will be more and more of a shift toward urban infill.

Unfortunately I expect council to continue to take the easy way out and avoid correctly dealing with this issue. There will be plan after plan to give the appearance of progress but no real changes.

[halifaxboyns]

Originally Posted by someone123

Problem is that unless the article is wrong, the proposed fee structure won't actually promote development that is less costly to service. The proposed apartment fee is 80% as high as the house fee even though apartments are much cheaper to build and service on average than houses. A $2000 fee will similarly hit low-end, first time homebuyers much harder than the people buying expensive-to-service Kingswood-style McMansions.

The HRM should impose fees based on where a new development is located and what it needs in terms of new services. The regional centre (Peninsula + inner Dartmouth) should be exempt from the fees to encourage urban infill that will be good for the city's bottom line. The exurban McMansions will have to pay their way, which is only fair. To reduce the pain of the fees they should be brought in gradually. As they grow there will be more and more of a shift toward urban infill.

Unfortunately I expect council to continue to take the easy way out and avoid correctly dealing with this issue. There will be plan after plan to give the appearance of progress but no real changes.

I would have to agree - I think if you are going to encourage urban infill, the fee should not apply to anything in the regional core. The value of the land, combined with increasing value as more development occurs will be reflected in the property assessments and so the property taxes should be more than adequate.

This fee should have been split up so that you had the serviced greenfield areas paying one rate and the unserviced greenfield paying an even higher rate since the unserviced rural areas are the most expensive to service for roads or any services.

I suspect you probably won't see this issue dealt with in a fair way until a new regional plan comes along; which if it takes 5 years to research, consult and then get approved; would be starting around 2021, to get in place for when the current one expires in 2027.

[fenwick16]

I agree with halifaxboyns and someone123. Having development fees is a good idea, but the ones proposed might not be high enough. Having development fees based on servicing cost to the municipality might help to discourage growth in areas that are expensive to service (or at least compensate the municipality for the added servicing expense).

[planarchy]

This is just the first stage to allow HRM to consider such fees. Debate on how and where they will charged will follow. Councillor Sloan has already suggested that any development within the peninsula be exempt. A big ask that is sure if be challenged, but certainly in the right direction.

[Keith P.]

The statement that the fee would be used by HRM to build things like libraries is simply ridiculous. We are about to spend $60 million on a gold-plated imported designer library. We don't need to be putting one on every streetcorner. This sounds simply like a tax grab by a money-hungry HRM.

[Waye Mason]

It needs to be more nuanced, that is for sure... it should reflect the cost of bringing services to the house, beyond water and roads.

So obviously infill in Dartmouth would not need a developer charge towards building a rec centre or a school, but development in Kingswood or BLT, where the schools are full and they don't have sufficient rec opportunities should have that charge, as an example.

[halifaxboyns]

Originally Posted by Waye Mason

It needs to be more nuanced, that is for sure... it should reflect the cost of bringing services to the house, beyond water and roads.

So obviously infill in Dartmouth would not need a developer charge towards building a rec centre or a school, but development in Kingswood or BLT, where the schools are full and they don't have sufficient rec opportunities should have that charge, as an example.

There are levies for those things as well; which aren't being discussed - they are already set. This is an additional fee.

Most cities have different ways of requiring these levies/fees be paid. When I worked in Fort McMurray, it depended on the subdivision. Sometimes the developer of the overall subdivision paid the levies up front as the roads and pipes went in; sold the lots on each street as a phase to one or two builders and then as the streets and construction was certified they would come in for their development and building permits. In other cases, you had the developers force the builders to pay the cost once the streets and pipes were certified and each phase opened up. So you might have one person come in for a house permit that was say $200 because the levies were paid up. But the next person was on a lot where it wasn't and they'd be nailed $1,900 because of the levies and be on the verge of tears at the counter. I'd end up going out to talk to them, but there wasn't much we could do.

If my memory serves me - in the subdivisions where the person applying for the permit had to pay the levies, when I left it was somewhere around $2400 (permit included).

For HRM; if you are building in the urban area where there is water service - there is what is called the sewer redevelopment charge. It's 30 cents a square foot for each floor; but it's applied to every structure (including garages).

Just to give you an idea of the cost now; let's say I'm building a typical suburban home.

My basement is lets say 800 square feet, unfinished and is 2.5m below grade. My main floor is at grade and is 1200 square feet. My upstairs is 1200 square feet.

My permit fee is:
Building permit
Basement = 10 cents/sq. foot *800 = $80
Main floor and 2nd floor = 30 cents/sq foot *2400= $720
Development Permit = $100.00
Plumbing fee = $50.00
Lot grading fee = $75.00
Sewer redevelopment charge (30 cents/sq foot/per floor) = (240+360+360) $960
Sewage Treatment = $880.00
Solid Waste = $229.70

Total cost = $3097.70 if I calculated it correctly.
That information is taken from here.

[worldlyhaligonian]

Originally Posted by Keith P.

The statement that the fee would be used by HRM to build things like libraries is simply ridiculous. We are about to spend $60 million on a gold-plated imported designer library. We don't need to be putting one on every streetcorner. This sounds simply like a tax grab by a money-hungry HRM.

Lol, start a group called stop building libraries (sbl)

[halifaxboyns]

Originally Posted by worldlyhaligonian

Lol, start a group called stop building libraries (sbl)

Don't give him ideas! Sorry Keith, I couldn't resist.

[Empire]

Originally Posted by halifaxboyns

There are levies for those things as well; which aren't being discussed - they are already set. This is an additional fee.

Most cities have different ways of requiring these levies/fees be paid. When I worked in Fort McMurray, it depended on the subdivision. Sometimes the developer of the overall subdivision paid the levies up front as the roads and pipes went in; sold the lots on each street as a phase to one or two builders and then as the streets and construction was certified they would come in for their development and building permits. In other cases, you had the developers force the builders to pay the cost once the streets and pipes were certified and each phase opened up. So you might have one person come in for a house permit that was say $200 because the levies were paid up. But the next person was on a lot where it wasn't and they'd be nailed $1,900 because of the levies and be on the verge of tears at the counter. I'd end up going out to talk to them, but there wasn't much we could do.

If my memory serves me - in the subdivisions where the person applying for the permit had to pay the levies, when I left it was somewhere around $2400 (permit included).

For HRM; if you are building in the urban area where there is water service - there is what is called the sewer redevelopment charge. It's 30 cents a square foot for each floor; but it's applied to every structure (including garages).

Just to give you an idea of the cost now; let's say I'm building a typical suburban home.

My basement is lets say 800 square feet, unfinished and is 2.5m below grade. My main floor is at grade and is 1200 square feet. My upstairs is 1200 square feet.

My permit fee is:
Building permit
Basement = 10 cents/sq. foot *800 = $80
Main floor and 2nd floor = 30 cents/sq foot *2400= $720
Development Permit = $100.00
Plumbing fee = $50.00
Lot grading fee = $75.00
Sewer redevelopment charge (30 cents/sq foot/per floor) = (240+360+360) $960
Sewage Treatment = $880.00
Solid Waste = $229.70

Total cost = $3097.70 if I calculated it correctly.
That information is taken from here.

In Halifax you have to pay a $7500 deed transfer tax on a $500,000 home (fee require to file one piece of paper). How much is it in Calgary?

[halifaxboyns]

Originally Posted by Empire

In Halifax you have to pay a $7500 deed transfer tax on a $500,000 home (fee require to file one piece of paper). How much is it in Calgary?

LOL = $135 for a $500,000 home.