We Killed the Development Charges & the Pro Forma Still Died
I’m a non-market housing developer, and I have a confession to make: I have never paid full municipal development charges.
Not because I’m reckless.
Not because I’m a trillion dollar company.
But because somewhere between the third staff report, the fifth “affordable housing framework,” and the seventh councillor nodding gravely about “the crisis,” the charges… disappear.
Development charges, green space levies, application fees. All very serious, very important tools for city-budgets. Unless, of course, you show up with:
1) a CMHC viability spreadsheet labeled “Pro Forma (FINAL_v12_REAL_FINAL.xlsx)”
2) a calm explanation that yes, charging us $45,000 per unit will, in fact, result in zero homes.
At which point the municipality leans back and says:
“Well… we do have some flexibility. This will be our financial contribution to the funding application.” And suddenly I’m a master negotiator. A savant. A real estate mogul in sensible shoes.
Like all of you, I’ve seen municipal development charges grow exponentially for the same reason our city’s infrastructure is held together by hope and a 1997 capital plan: municipalities are broke. Like structurally, spiritually, and actuarially broke. Decades of “flexible” growth boundaries for R1 development have created what is essentially a slow-motion Ponzi scheme. New subdivisions are brought in to pay for the pipes, roads, and ice rinks of the last subdivision, which was built to pay for the one before that, all while pretending this is “growth” and not a municipal version of refinancing your credit card with another credit card.
When the math finally stops mathing, and land taxes don’t go up, the only legal lever left is development charges allowed by the province, which now exist less as a planning tool and more as a municipal cry for help wrapped in a fee schedule.
That said, before anyone thinks I’ve cracked the code, let me be clear: The pro formas are still brutal with no development charges.
Even with reduced or waived charges: Land values are completely unhinged. Everyone is pricing sites as if dog-crate high-rises for investors are inevitable. Prices are marketed as “affordable” but still require a household income that includes two professionals, a side hustle, a bank robbery and emotional support parents
So yes, I can negotiate my way out of municipal charges.
But I can’t negotiate crazy land speculation. I can’t negotiate interest rates that destroy prehistoric construction financing. And I definitely can’t negotiate a “moderate market price” that’s affordable to, you know… most Canadians.
In conclusion:
Land values need to come down and correct themselves across all cities and towns and follow wage growth patterns. Public land is the only land that hasn’t read the speculative real estate blogs. It was genuinely refreshing to hear that Build Canada can now buy land because at this point, the only rational buyer left is the one not expecting a 400% return by Tuesday. If we don’t make public land competitively 100% non-market, the profit-driven market won’t want to build enough “supply.” And non-market housing will continue trying to deliver deeply affordable homes on land priced for imaginary billionaires with imaginary returns.
Anyway, see you at the next council meeting, I’ll be the one politely asking for another exemption while pointing at a pro forma that’s quietly screaming.
