High municipal development charges are creating a major barrier to housing affordability in Canadian cities, according to a new report from the Canada Mortgage and Housing Corporation.
Blacklock's Reporter says analysts found some fees reaching six figures, adding tens of thousands to the cost of new homes and apartments.
“Research and market intelligence shows this cost may be passed on to homeowners and renters and can be a significant constraint to housing affordability,” said Mathieu Laberge, CMHC’s chief economist, in a Housing Observer report.
“New data collected by CMHC shows development charges account for a significant part of the cost of a new housing unit in some cities.”
CMHC’s pilot project collected development charge data from municipalities in British Columbia, Alberta, Ontario and Québec, the first time the agency tracked fees on new homes nationwide.
The findings reveal dramatic variation across the country.
Apartment development charges ranged from $8,584 in Montréal to $130,200 in Toronto, with other high-cost municipalities including Brampton at $97,676 and Pickering at $77,106.
Charges for single detached homes were even higher, ranging from $40,597 in Laval to $180,600 in Toronto. Ottawa, Newmarket, and Port Moody also recorded fees above $68,000 per unit.
CMHC noted that these charges fund a wide array of municipal projects, including libraries and daycare centres, often unrelated to servicing or protecting property.
“Ultimately Canada must build its way out of this housing crisis while ensuring access to quality municipal infrastructure,” CMHC wrote.
“By learning from these insights and fostering more consistency, all levels of government can shape policies that help Canadians access a home they can afford.”
Conservative MP Scott Aitchison said the findings highlight the need for dramatic reform. “One of the biggest impediments to getting homes started and getting homes built is the cost of local government,” he told the Commons human resources committee.
Cabinet has targeted construction of 3.9 million new homes beyond ordinary rates to restore affordability by 2031, requiring at least 650,000 starts per year. CMHC’s February Housing Market Outlook noted the target is likely unachievable, with urban starts last year totaling 227,697 and Canada’s all-time record at 273,200 in 1976.
