South Huron council split on boosting development charges

By John Miner

Split on whether to triple development charges, South Huron council is asking for more information before making a final decision.

A consulting company hired to analyze the cost of future development estimates that South Huron’s current development charges of $6,467 for a single-detached house need to be raised to $19,131.

The development charges are intended to cover the additional costs the municipality will face for water, sewer, fire protection, parks and recreation and services related to roads as a result of future development.

If the higher development rates aren’t charged, it is estimated the municipality will forego $545,000 a year in revenue, money that will likely have to be raised from property taxpayers, Tina Chitsinde, a senior project coordinator with Watson and Associates, told a special council meeting in May.

The Watson and Associates’ report indicated that neighbouring Lucan and Middlesex Centre currently have development charges set above $40,000 for a single detached house, while North Middlesex and North Perth are more than $30,000.

Developers with subdivision projects in South Huron have come out strongly against the proposed increase.

In a letter to council, Mohamed Abuhajar, project coordinator for INCON, developer of the Buckingham Estates and Windermere Community subdivisions in Exeter, said the increase would make lots commercially unsellable.

“This increase is not merely excessive - it is economically destructive and will have immediate, irreversible consequences for our projects, the builders we partner with, and the long-term growth objectives the municipality is actively pursuing,” Abuhajar wrote.

Don de Jong, President of Tridon Properties Ltd., wrote that his company understands and supports the need for the municipality to plan for growth and to ensure that infrastructure is appropriately funded.

But de Jong said they are concerned about the magnitude of the proposed increases and escalation in costs for certain services.

“These increases, when layered together, represent a substantial new cost burden on residential development that will inevitably be reflected in higher housing prices for future residents.”

Opposing the proposed development charge increase, councillors Marissa Vaughan and Wendy McLeod-Haggitt said some of the projects used in the calculation will likely not be needed, given the slowing housing market in South Huron.

Vaughan pointed to the plan for a $9-million water tower to serve the east side of Exeter by 2039.

“To change the development fee numbers today for growth that may or may not occur 10 to 15 years out, I don’t think it is realistic,” Vaughan said.

McLeod-Haggitt said there have been foreclosures and forced sales of homes in Exeter with one local law firm handling 10 home foreclosures since January. If people are losing their homes, they are not going to be going out and buying new ones.

“Maybe we need to pull back on some projects, reschedule them, and move them around and not be as aggressive as some of the projects have been.”

Coun. Ted Oke said a 300 per cent increase in development charges is more than he is willing to stomach at the moment. He suggested looking at removing some municipal projects from the calculations or finding a way of phasing in the charges.

Oke said South Huron also needs to ensure it is competitive with the development charges in neighbouring municipalities.

Arguing for raising the charges to the suggested level, Coun. Aaron Neeb said the $19,000 cost reflects the actual additional costs to the municipality of the development.

“For a $500,000 house, the proposed charge adds 3.8 per cent to the costs, an amount that does not necessarily make it more or less affordable,” he said. “But it will make it less affordable for our property owners that have to pay that extra tax or user fees.”

Deputy Mayor Jim Dietrich said he didn’t know how the municipality could advance without the updated charges. Not only does South Huron need to cover the costs of pipes, but there will also be additional expenses for fire protection, recreation, and roads.

“It will end up in taxes if we don’t move forward with these charges,” he said.

Council passed a resolution asking staff for a report on the actual population growth of the municipality for 2024-25, the impact of removing a $9-million water tower and $20-million wastewater treatment plant upgrade from the development charges calculation, and details of the implementation dates and their expiry for development charges levied by neighbouring municipalities.