As the city loses the ability to collect some development charges due to provincial changes, staff is recommending council implement a new fee specific to high-density residential builds.
Known as a Community Benefit Charge (CBC), the fee would only apply to developments with at least five storeys and no less than 10 units, if approved by council.
Capped at four per cent of the pre-development land value, the CBC is expected to generate nearly $5.5 million to go toward city projects in its first decade.
“A number of the projects are not currently funded in the capital plan, and this new revenue will reduce the need to utilize tax, rates or other sources,” states a report on the agenda for council’s July 18 meeting. “Due to the restriction on the use of CBCs to fund only the costs directly benefitting the growth paying the charge (i.e. high density), capital projects will continue to require the majority of their funding from tax and rate sources. “
If approved, the fee would come into effect on Sept. 18.
"For projects to be funded by the CBC revenue, an analysis of the project benefit to eligible high-density residential growth must be completed," the report notes. "This analysis looks at the benefit split between non-residential and residential, the split between low/medium density and total high-density, and the split between eligible and ineligible high density."
Around that same time as the proposed fee would begin, changes in provincial legislation mean the city will no longer be allowed to collect development charges to put toward parking projects and some other things, reducing revenue by about $750,000 per year.
Between the DC changes and new CBC, the city will be “slightly worse off” in recouping the cost of growth, noted Gary Scandlan of Watson and Associates Economists Ltd. during a presentation to council in April.
“I think at the end of the day we’ve lost revenue,” he told council.
