The Missing Middle Initiative (MMI) and the Ontario Real Estate Association (OREA) partnered to author a report, “A Pathway to Development Charge Reform” that looks at seven practical recommendations on how to lower development charges (DCs) in a fiscally responsible way that does not increase property taxes.
In the report, the seven recommendations in OREA’s roadmap to reducing development charges are:
1. Provide immediate relief to homebuyers and accelerate housing construction through a two-year DC suspension program.
2. Lower tax bills and interest costs by reducing infrastructure construction costs through alternative financing mechanisms, such as municipal service corporations and municipal utility districts.
3. Substantially lower the price of new homes by removing tens of thousands of dollars in interest costs and tax-on-tax by implementing a transparent direct-to-buyer DC billing model that exempts DCs from Harmonized Sales Tax (HST) and Land Transfer Tax (LTT).
4. Lower the price of new homes by removing population growth-related costs from DCs.
- Remove community-wide services, such as long-term care, public health and emergency services, from DC eligibility.
- Create a performance-based funding model based on population growth.
5. Reduce DCs and eliminate waste in the system by increasing transparency and standardizing methodologies across municipalities.
- Eliminate non-committed, aspirational, or unfunded wish list projects from DC background studies.
- Prevent hidden DC escalation by ending automatic indexing and requiring council votes on rate changes.
- Standardize key assumptions to reduce disputes and improve fairness.
6. Reduce cost pressures on municipalities by improving coordination of infrastructure planning, including transit and roads, between all levels of government.
7. Improve accountability and public trust by increasing transparency and reporting of DCs.
- Enhance transparency standards through uniform reporting and disclosure.
- Establish independent oversight through a DC Inspector’s Office.
The full report can be downloaded here or from OREA's website.
