City applies to hike some development charges by nearly 800%
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Development charges for high-density buildings in Brandon related to water and wastewater could rise by nearly 800 per cent, a city application to the Public Utilities Board shows.
The application would see development charges increase from $1,614 to $12,863 for high-density units. For low-density units, the charges would rise from $2,496 to $17,407.
Evan Keller, president of Keller Developments in Brandon, said the charges align fairly closely with what was previously discussed and will have an adverse effect on development.
Evan Keller, president of Keller Developments, is shown at the company’s office on Middleton Avenue in Brandon on Friday. Keller said the proposed new development charges, on top of increased property taxes and Canada Mortgage and Housing Corporation premiums, are making the local housing market “very unattractive.” (Tim Smith/The Brandon Sun)
“I think it’s going to be crushing to development within the city,” Keller said.
“I think the city is underestimating how this is going to hurt housing, and I think they’re going to quickly have to change the path that they’re on, once the effects are felt.”
He said the charges, on top of increased property taxes and Canada Mortgage and Housing Corporation premiums, are making the local housing market “very unattractive.”
Marc Chapin, the city’s manager of land development, said the hikes are needed because the city’s water and wastewater infrastructure need maintenance and upgrades while the city grows.
“We’re not quite sure how it will impact development in Brandon,” Chapin said on Friday.
Chapin said the proposed changes were made after public consultation, and the city knows there will be a dip in developments once they come into effect.
A surge in development applications is expected beforehand as developers rush to finalize projects before new rates come into effect, the city and developers previously told the Sun.
“We might see a dip afterwards, but we believe the industry can sort of figure out how to live within the rates that will be applied to permits,” Chapin said.
“Without these rates in place, it’s difficult to be able to even facilitate development because we need the infrastructure below ground to be able to build the houses above ground.”
The high-density rates proposed by the city are slated to be phased in over a three-year period, which Chapin said will help the industry adjust.
He said the rates change the business model developers have had historically, but that Brandon’s rates still aren’t as extreme as they are in other cities.
Chapin said the charges vary for some city neighbourhoods, and related costs for some developments can vary as well.
The increases are subject to further approval.
Keller said other increases in the PUB application will also hurt the commercial market.
He said there are alternatives for developers, including building in neighbouring municipalities.
“It’s going to be hard for them not to look at being in a development just outside city limits, where the taxes are lower and there’s no development charges,” he said.
Keller said the city’s problems with water and wastewater are being dealt with far too late and at too high a cost.
The city should instead be advocating for more funding from other levels of government, he said.
Keller said looking long term, he thinks the issue will sort itself out and the city will have to backtrack.
“There’s going to be limited development. Not very many apartments are going to be built,” he said. “Housing is going to be slow, and people are going to be leaving the community because they can’t find a place to live.
“And at that point, this city is going to have to back off on the development charges.”
Chapin said he believes development in Brandon will continue past the initial dip and that more development in other municipalities may happen, but it isn’t a concern.
He said if the city didn’t increase the charges, the projects won’t disappear and the money for required infrastructure would have to come from other sources or the city would see reduced services.
“At the end of the day, the projects have to get paid for. It’s just how you get that money to allocate towards the infrastructure projects,” Chapin said.
He said the city is looking for infrastructure funding from Ottawa and the province.
“We understand that they’re really high, but we believe that we’ve done our due diligence to make sure that the rates are equitable,” he said.
A representative for the Construction Association of Manitoba didn’t return a request for comment before press time on Friday.
» alambert@brandonsun.com