In pursuit of nearly $50 million in grants from senior governments, Windsor is prepared to slash the fees it charges developers by 70 per cent.
On Wednesday, city council voted unanimously to submit an “aggressive” application for funding from the $8.8-billion Canada-Ontario Development Charge Reduction Program.
Although the program asks municipalities to slash build fees by between 30 and 50 per cent, Windsor has committed to reducing its development charges by 70 per cent — more than any other municipality in Ontario so far, according to city officials.
Why Such a Deep Cut?
The application-based funding “will be competitive,” said Mayor Drew Dilkens. “There are over 200 municipalities in Ontario that collect development charges. This approval today … ought to put us amongst the top of the heap.”
Development charges are fees municipalities collect from developers and builders to pay for municipal infrastructure (roads, sewers, water lines, etc.) and services (libraries, public transit, and emergency services) to support growing neighbourhoods. Otherwise, existing taxpayers would bear those new costs, and property taxes would further rise.
Program Details
Announced on June 1, the joint funding initiative between the federal government and Ontario will cover up to 90 per cent of costs for new housing-related infrastructure, as long as municipalities cut development fees for three years and pay for 10 per cent of their projects.
Windsor has submitted five projects — the maximum number allowed — for funding. All of them are for road and stormwater infrastructure in South Windsor, primarily along or abutting Cabana Road and related to preparations for the new Fanscy Family Hospital or future economic development opportunities.
Project Costs and Funding
The total value of the projects, all of which are shovel-ready, is $122.8 million. The city is requesting $49.89 million from the development charge reduction program and has expressed willingness to cover the remaining $72.9 million.
If the province, which is managing the fund, only agrees to fund one or two projects, the city would still have to reduce its development charges by 70 per cent to receive any money. That wouldn’t be financially viable for the city, officials said.
“If discussions do not result in a successful application and a successful result, we will either come back to council or we will have to respectfully walk away from receiving funding,” said Janice Guthrie, the city’s treasurer and CFO. “We’re hopeful that they will approve all of the projects going forward. We feel we have a very strong opportunity to maximize grant funding.”
Expected Housing Impact
In a report to council, staff conservatively estimated reduced development charges could unlock the construction of 2,933 new housing units over the next three years. However, senior managers on Wednesday suggested developers have projects with more than 4,000 housing units in the pipeline.
