Toronto builders decry hidden fees on new homes

Housing development fees in Ontario are among the highest in North America, with some 30% of the purchase price in the Greater Toronto Area (GTA) going to various government fees, according to two new studies.

The Residential and Civil Construction Alliance of Ontario (RCCAO) and Residential Construction Council of Ontario (RESCON) produced joint studies, concluding that government fees, levies and regulatory costs were exceedingly driving up housing costs in Toronto and surrounding communities.

In a RCCAO study, Ryerson University Professor David Amborski concluded that municipal development charges alone now add between $30,000 and $50,000 to the price of a new home.

Oakville had the highest development charges for single- and semi-detached homes, totalling $50,458 on average. Next was Markham at $46,457, Milton at $43,399, Newmarket at $41,528, Vaughan at $41,245, Burlington at $40,181, and Brampton at $40,180.

To take such figures into perspective, the report noted that average development charges in the Greater Vancouver Area averaged $23,418. Other cities are even lower, such as the average of $7,475 in Calgary and $1,425 in Edmonton. In the U.S., the average development charge is $8,328, with the highest state (California) averaging $21,648.

While many of the development charges in Ontario are billed directly to developers, they are nonetheless passed on in the cost of the purchase price, the report said.

“We understand that government must be able to fund infrastructure investments, but this should not be at the expense of housing affordability,” said Richard Lyall, president of RESCON.

The reports recommend various alternatives, such as raising property taxes or implementing a land value capture tax.

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