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Cities including Ottawa will be required to chip in 10 per cent of the cost of new infrastructure before they can draw from an $8.8-billion federal-provincial fund intended to spur homebuilding by lowering fees that are normally paid by developers.
On Monday, Ontario Municipal Affairs and Housing Minister Rob Flack and federal Housing Minister Gregor Robertson unveiled more details of the fund, which was first announced in March.
It’s intended to help cover infrastructure costs for municipalities that lower development charges paid by builders and used to finance the infrastructure that supports new housing, such as roads and sewers.
In Ottawa, the fees can run as high as $62,568 for a single-detached home outside the Greenbelt.
Municipalities are expected to slash those development charges by between 30 and 50 per cent for at least three years. In return, they’ll be eligible to apply for the federal-provincial funding over the next 10 years.
Rob Flack, Ontario’s minister of Municipal Affairs and Housing, speaks Monday at a news conference beside a new housing development in Ottawa. (Arthur White-Crummey/CBC)
But that money may not fully cover the cost of the infrastructure, and Flack said municipalities will be expected to cover the rest.
“Send your projects in, we’ll measure them, we’ll work closely with each application and each municipality, and let the games begin,” he said.
Municipalities can submit applications until June 19.
Ottawa Mayor Mark Sutcliffe says he is ‘going to fight to get as much of that money invested in Ottawa as possible.’ (Arthur White-Crummey/CBC)’Glass 90% full,’ Sutcliffe says
Ontario’s Big City Mayors (OBCM), which represents 29 municipalities in the province, said the new fund has the potential to help unlock housing projects.
But the organization also noted that the 10 per cent requirement could add to an already strained property tax burden for residents of cities that choose to take part.
“While we all share the same goal of reducing housing prices, it cannot come at the cost of increases to property taxes or on the backs of homeowners,” OBCM chair Marianne Meed Ward said in a statement.
The City of Ottawa collects an average of $204 million a year in development charges, the city confirmed to CBC.
Mayor Mark Sutcliffe, who attended Monday’s news conference, said he was not fazed by the 10 per cent contribution that will be expected from cities.
“We have a choice: We can look at it as the … glass being 10 per cent empty or 90 per cent full,” he said.
Sutcliffe said Ottawa is in a good fiscal position to manage the burden, and said its share of the new fund over the decade could total between $600 million and $700 million.
“I am going to fight to get as much of that money invested in Ottawa as possible,” he said.