Development charges bylaw appeal also anticipated
Ottawa Construction News staff writer
The Greater Ottawa Home Builders Association (GOHBA) has appealed Ottawa’s new official plan to the Ontario Municipal Board (OMB) and will likely appeal the new development charges (DC) bylaw once it passes in June, says Builder-Developer Council chair Josh Kardish.
The two appeals, while distinct, are also related, in that there are “items in the (official plan) policy document that directly correlate to the development charges appeal, and the issues with the DC growth assumptions and ties to the Infrastructure Master Plan,” Kardish said.
The official plan appeal relates largely to the wording of certain clauses that “are so restrictive and prescriptive, they are better suited in a zoning bylaw than in a policy document,” he said.
Among concerns are provisions that “set out the distance requirements between high rise towers,” Kardish said. This could result in a situation where the “first one in” can build, but “with the minimum distances you may sterilize other lands, and that may be an interpretation issue, and it is a concern.”
The GOHBA’s document outlines several detailed concerns with the official plan.
Meanwhile, Kardish said the development charges bylaw also has serious problems and, if changes aren’t made before city council approves the final version in June, the association will also likely file an appeal at the OMB.
The big issues with the development charges bylaw include road costs and road cost contingencies, how the indexing of principal reductions are allocated to financing, and how the city is allocating large capital grants in a manner that fairly distinguishes between benefits to existing communities and new developments.
Probably the biggest challenges, says Kardish, are the road costs and cost contingencies. Kardish says the GOHBA believes these costs have caused development charges to be overstated between $800 and $1,200 a door in the highest single family home category. However, these discrepancies may even be larger if all the issues are considered.
The issue of the allocation of debt for development charges is also a challenge, in that the city may be “double counting the principal and repayment on debt,” he said. “In this case, they are both eating away at the debt and they are simultaneously indexing the debt,” he said.
Grants from other levels of government for major projects such as the Light Rail Transit initiative, and their impact on what should be the fair development charges are “untested” but again, the question is whether these grants that benefit existing communities should be factored more accurately into the development charges calculations, he said.
“In calculating the proposed transit development charge, the city has allocated 100 per cent of the benefit of anticipated grants to the capital costs attributable to existing development or to increases in services exceeding the allowable 10-year historic service level standard,” Goodmans LLP lawyer Robert Howe wrote on behalf of the GOHBA in a May 9 letter to Ottawa’s mayor and city council.
“The regulations under the Act provide that grants must be proportionally allocated between the capital costs funded by the development charge on account of growth versus existing existing development, unless the party making the grant expressly earmarked the grant to benefit existing or new development,” the lawyer wrote. “GOHBA is not aware of any such earmarking in respect of the anticipated grants.”
Howe says in his letter: “Accordingly, GOHBA believes that the transit development is substantially higher than is permitted under the Act by approximately $2,500 per single detached unit, based on preliminary calculations by its consultant, Altus Group.”
Kardish says the GOHBA would like to continue discussions with the city to resolve the outstanding development charge bylaw issues. “The road contingency charge is patently unfair, and the two other items appear to be unfair, but there seems to be reasonable ways to get the charges down, so they are a little less of a hit to the young families and the people who buy homes, while allowing the city to achieve its goals.”
“There are reasonable methods to make the numbers palatable, but we’ve been rebuffed in the past few weeks,” he said.
If the city doesn’t change the development charges bylaw, the fees for a single or semi-detached home inside the Greenbelt will increase substantially. If things aren’t changed, the new charge for single family homes outside the greenbelt will be $30,832 (which is $5,517 more than the current level. However, “you have to add another plus or minus $2,400 for park development, so therefore the total true increase is about $8,000,” Kardish said.