Toronto council greenlights deal to cut development charges by up to 60 per cent

“It can be built faster, it can be built in a more affordable way,” she said. “That’s what this development charge exemption is all about.”

Council voted on the motion from Chow following a deal struck between the federal and provincial governments that will see the city get $1.5 billion over three years to cover the revenue shortfall from cutting development charges, which are fees municipalities put on projects to pay for the infrastructure they’ll require, such as roads and sewers. The mayor appeared at a press conference Wednesday morning in front of a novelty cheque for $1.5 billion. 

“The bigger the units, the more affordable it is to build,” Chow said when first announcing the deal at a press conference Tuesday with federal Minister of Housing and Infrastructure Gregor Robertson and Premier Doug Ford at a condo construction site at Bloor and Yonge streets Tuesday, where all three were clad in hard hats and reflective safety vests. 

Earlier this year, the higher levels of government announced a combined $8.8 billion to reduce development charges by 50 per cent or more. 

Chow added that builders who make one in five units affordable will get 100 per cent of the development charges waived, up to 10,000 units, through the city’s Purpose-Built Rental Incentives Stream.

The motion that went to Toronto city council at its Wednesday meeting, brought by Chow and seconded by Coun. Shelley Carroll, outlined more details in the Development Charge Reduction Program.

Move heralded as a win for the city 

Members of council lauded the mayor for striking another intergovernmental agreement reminiscent of the 2023 “new deal” with the province, wherein Queen’s Park took fiscal responsibility for the Gardiner and DVP.

Coun. Gord Perks (Parkdale—High Park) said higher levels of government have, over decades, gradually forced more of the burden for costly public infrastructure maintenance onto cities, which he said are not equipped financially to shoulder them. Perks called this the “great download” and blamed it for the physical degradation of cities around the country. The new deal bucked this trend, he said.

This new funding from the provincial and federal governments to waive development charges is another move in the right direction, he said, calling it a “historic and revolutionary” rebalancing of government roles and responsibilities that will improve lives. 

Willowdale Coun. Lily Cheng said while the money will be helpful, it’s still not enough and won’t prepare Toronto communities for the population growth more housing could encourage. Her ward, which had 117,130 residents in the 2021 census, is expected to add another 150,000 people in the next 25 years, she said. A move like this, to add more density, could further deteriorate quality of life in the city, she said, if it can’t afford to add resources like libraries and child care nearby. 

“While I’m grateful for this upload, I really want to emphasize that when we incentivize housing and we want to see more neighbours, we have to find the money to support that growth,” she said. “We need to get back at that negotiating table and we need billions of dollars to get the services, the spaces we need to protect the quality of life of our residents.”

Bylaw amendments expected next month

Wednesday’s motion directed the city’s chief financial officer and treasurer to report back to council in July, with proposed bylaw amendments that would see all one-bedroom units get a discount of 40 per cent from current rates, and units with two bedrooms or more  independent rooms see a development charge cut of 60 per cent.

The condo market has experienced a historic downturn. For the first time in 30 years there were zero new condo projects launched in the Greater Toronto and Hamilton Area in the first quarter of the year, according to real estate market research firm Urbanation.

At Tuesday’s press conference, Robertson said the industry is experiencing some “tough times,” and the situation is keeping construction workers out of a job in both Toronto and Vancouver.

“I think we’re all having to adjust a lot faster and deeper than we might have expected,” Robertson said, to “try and make the best moves that we can possibly make to rebound and get our housing market back on track,” he added, and make homes more affordable.

Asked by a reporter if a plan for the federal government to buy 2,200 vacant condos and turn them into affordable homes in Vancouver amounted to a taxpayer-funded bailout for developers, he said it’s just one tool they are using.

Robertson cited Build Canada Homes, a new crown corporation devoted to building affordable housing, as the “main approach,” with 11,000 homes in the works. 

But “in a time like this” when apartments are empty and people are homeless, he said, they “need to take action.”

Ford said at the press conference that, combined with the recent HST break on new homes, the measures will save buyers $200,000 off the cost of a new home.

In Toronto, the funding will go toward new projects in the city like wastewater infrastructure and transit, he added. 

Some cities, including Vaughan and Burlington, have also made deals to cut development fees.

Amendment to boost worker safety passed

The mayor successfully moved a motion to negotiate agreements with nine trade unions working in the residential sector to codify better training regimens and safety protections. She said this could help reduce workplace deaths and injuries. She said 20 people die “traumatic workplace deaths” in construction every year in the city. She said she did not believe these results from these bargaining talks, which could raise salaries, would hike housing costs.

Coun. Stephen Holyday (Etobicoke Centre) also moved a successful amendment to have city staff track details of developments that made use of fee reductions and report on them annually.

Coun. Mike Colle (Eglinton—Lawrence) amended the item to request the province impose a time limit on projects using the program to ensure they get building faster.