Developer Cost Items in New Communities
I thought this article would be useful the next time the debate comes up on what the developer/home owner pays for in the costs of suburban development. From first of 2 articles.
Developers foot the bill for building their communities. On top of that, they also pay levies for infrastructure impacts at the regional or citywide level.
At the community scale, developers pay for:
-New roads -- majors, collectors, local roads and lanes. This includes curbs, gutters, sidewalks, pathways, boulevards, medians, street lights and signs.
-Water and sewer pipes and connections -- those that run in the street, as well as those that run to and from your house.
-Stormwater infrastructure -- the catch basins, pipes, ponds and pumping stations that serve to clean, store and transfer stormwater run-off
-Electrical feeder mains that service communities
-Parks and school sites -- this includes gifting the lands as well as landscaping the parks with grass, trees, shrubs, playground equipment, benches, trash receptacles, lighting, irrigation and fencing
-Environmentally sensitive areas are also given up and protected in addition to park space. This can include protection and enhancement of wetlands.
-Trees -- street trees, boulevard trees and lot trees.
-Land for community associations.
-Property taxes, as well as planning, engineering and inspection, and regulatory fees.
-Maintenance -- developers typically maintain these items for periods of one to three years after completion. At the close of their maintenance period, this infrastructure is given to the city (not sold to the city, as some believe).
-Special amenities for master-planned communities will also include features like water parks, tennis courts, hockey rinks, lakes, basketball courts, volleyball courts, additional play and open spaces, gardens, entrance features, resident association facilities, gyms and water features. Many of these are paid for, owned and maintained within the communities by developers and transferred to resident associations.
The items listed are ones that are fully financed, constructed and paid for by developers.
Of course, while this might be a very extensive list of what is required within a local community, what about impacts that new communities have on existing roads, pipes and infrastructure outside of that community?
What about new recreation centres, libraries, fire halls, and transit needed to service growing areas?
The additional burden on infrastructure outside of new communities gets paid for through development levies.
The recent media focus has been almost exclusively on the increase of these levies, which fund regional or citywide infrastructure improvements.
These costs are established between the city and the development industry -- and paid to the city, which manages these funds.
A catchment or service area is defined by the city for the infrastructure, typically extending beyond the boundary of any one particular community.
The city determines the cost of that service or amenity and charges it back to the developer on a per hectare basis.
What is included in these levies?
- Transportation infrastructure (including land costs if needed).
- Traffic signs and road markings
- Transit (buses).
- Trunk lines for stormwater.
- Regional stormwater treatment facilities.
- District (regional) and community parks.
- Area libraries.
- Regional recreation centres.
- EMS stations.
- Police stations.
- Fire stations.
While school sites are provided by developers, the schools, themselves, are funded by the province, as is the city's LRT.
So, what does the city (in other words, taxpayers) pay for?
The city pays to service and maintain the assets it owns. It takes on the maintenance and life cycle costs of infrastructure, delivers services to its citizens, and builds assets that benefits the city, in parts or as a whole.
"...cities that expect a grand new art gallery or concert hall to revitalize them while their sewer systems are falling apart are kidding themselves" - Joel Kotkin