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Condo developers aren’t exactly the easiest demographic to feel sympathy for, but the recent inactivity in Toronto’s real estate market paired with ridiculous building costs are severely impacting the number of units being built in the region — although with so much existing supply up for sale, buyers are likely unbothered.
As residents continue to question if they even want to settle down here given housing prices — the average home in the GTA went for $1,135,215 in September — the big companies building those houses are fighting their own battles, largely against municipal development charges that have skyrocketed by close to a staggering 1,000 per cent since 2010 in some municipalities.
Places like Vaughan have been called out for their especially high rates, with the fees on a single detached home now adding up to the price of an entire condo in other Canadian cities.
These charges are higher than a condo in Edmonton. Is Edmonton that bad?
— Probable Spam (@probably_spammy) November 18, 2024
But, apparently very attuned to the current discourse on the subject, the City’s leaders have decided to significantly cut these costs to invite more construction as the population surges, and hopefully also bring home prices down in the process.
What was formerly a $94,466 rate for the low-rise residential segment will now be reduced by about half, to $50,193, per staff recommendations approved by Council on Wednesday.
The rates for all residential development from the implementation of the new policy until November 29 will also be lowered to those from 2018, when they were a whopping 66 per cent lower than what they are now.
“Development charges have become an unfair tax burden on homebuyers. Too many of our residents, in particular young families in our community, have seen their dream of buying a home close to where they grew up disappear completely as housing prices have spiraled out of control,” Vaughan Mayor Steven Del Duca said this week in announcing the changes.
“We have a housing affordability crisis and it’s time for us to get real about the solutions needed to solve it. Dramatically reducing our development charges for the foreseeable future is a strong step in the right direction.”
He also went on to entreat other cities and towns in the province to take the same steps.
The move would likely be welcome in Toronto, development charges on single-family dwelling units have gone from $12,910 in January 2010 to $128,229 in September 2024, a 993 per cent jump.
