Committee approves $4,700-$6,200 hike in fees on new homes built in Ottawa

Building a new home in the City of Ottawa will cost homebuyers an extra $4,700 to $6,200 in fees, as the city increases charges to help pay for new roads, water and sewer infrastructure, transit and parks.

The planning and housing committee approved the new 2024 Development Charges Bylaw Update, which covers the one-time fees levied on new residential and non-residential properties to help pay for capital infrastructure. Council will vote later this month on the plan.

Under the new bylaw, the development charges on single and semi-detached homes inside the Greenbelt will increase from $43,494 to $48,265, while they will increase from $51,376 to $57,596 on homes built outside the Greenbelt.

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The new development charge fees will be transitioned in over 90 days.

The original plan called for a $12,000 increase in development charges, but staff say the updated increase of $4,700 and $6,200 is due to a recalculation of the number of homes expected to be built in Ottawa.

The Greater Ottawa Home Builders Association raised concerns about the increase in development charges after people had already signed contracts to build new homes.  Executive director Jason Burggraaf also suggested development charges should not cover certain projects, like aquatic facilities.

"There are many projects in the background study that arguably don't belong in the background study," Burggraaf said. "They disproportionately are costing to future home buyers as opposed to the general population overall."

The co-founder of Making Housing Affordable told the committee the higher fees could create a "bigger hole" in Ottawa's budget.

"We're driving urban sprawl, we're driving people out of the city with the high cost of housing in Ottawa, especially young families. It's really crushing our economy and our city budget," Dean Tester said.

City staff shared statistics showing how Ottawa's development charges compare to other cities in Ontario.   Development charges cost homebuyers $145,361 in Vaughan, $132,839 in Markham, $124,876 in Brampton, $118,308 in Mississauga and $97,041 in Toronto.  The graphic shows development charges in London are $44,076.

Ottawa's current Development Charges Act expires on May 22.