Toronto, December 1, 2021 (GLOBE NEWSWIRE) – Greater Toronto Area, December 1, 2021 – A study of 16 municipalities in the Greater Toronto Area (GTA) found that there are currently more than $ 5 billion in available cash reserves (as at the end of 2019) levied on taxes on new housing. The study was conducted by Altus Group for the Building Industry and Land Development Association (BILD).
The City of Toronto alone has amassed $ 2.6 billion in reserves (including development charges, cash in lieu of parks, and section 37 cash contributions) by collecting significantly more than charges on new housing and commercial space development than it has spent, but it continues to seek to raise rates and increase the costs of new housing.
“This is a story of missed opportunity for the City of Toronto, and indeed for any city in the GTA that has accumulated large surpluses in development charges, park collections or section 37 royalties, ”said Dave Wilkes, President and CEO of BILD. . “Either municipalities should deploy these funds for the purposes for which they were raised – more infrastructure, services, affordable housing and parks – or they could make a significant dent in the housing affordability challenge facing the region. is faced by reducing, or at least capping, fees on new homes. There is a clear opportunity to resize reserves and in so doing help address the housing affordability challenge facing the entire region.
The study, titled New Homeowner Money in the Governmentʹs Bank: How Unspent Municipal Reserves are Impacting Building Livable, Affordable Communities in the GTA, examines trends in the collection and use of various government housing charges in the GTA. The study examined 16 municipalities, including a mix of upper-tier, single-tier and lower-tier municipalities, and found that:
- For the 2013-2019 period, the municipalities studied saw their combined development charge (DC) reserve fund balances increase to $ 3.25 billion in 2019, an increase of $ 1.35 billion from 2013. The City of Toronto was responsible for the majority of the increase in DC Reserves, as the City’s DC Reserve Fund balance increased by $ 839 million during the same period. Development charges are levied on new homes and commercial space to help the municipality pay for infrastructure and services related to growth. Durham Region ($ 695 million) and the City of Vaughan ($ 482 million) have also built up significant cash reserves in DC.
- Parkland’s cash income and expenses increased Parkland CIL’s reserve fund balances by almost 300% over the period 2009-2019, from $ 375 million in 2009 to $ 1.48 billion in 2019. Again, the city of Toronto experienced the largest increase to $ 1.03 billion in 2019, up 372% or $ 815 million from 2009. The other large, high-density municipalities of population have also accumulated large reserves of Parkland CIL – Mississauga ($ 133 million), Brampton ($ 98 million), Vaughan ($ 72 million) and Markham ($ 59 million). Parkland CIL are cash payments imposed on new developments to allow municipalities to acquire parks and other forms of open space.
- At the end of 2019, the City of Toronto had a surplus of approximately $ 303 million in its Section 37 reserve fund, with more than 70% of that balance going to four downtown Toronto neighborhoods. The use of section 37 in “905” municipalities has generally been found to be relatively limited. Section 37 contributions are intended to help municipalities provide community infrastructure in denser areas than is normally allowed.
“Municipal fees and charges are by far the largest component of government-imposed taxes and fees, which account for 22 to 24 percent of the cost of a new home,” Wilkes said. “In the city of Toronto, that percentage jumps to almost 27% with the introduction of the new inclusionary zoning tax passed earlier this month. Overall, taxes and other charges on new homes in Toronto have increased much faster than property taxes. Development charges have increased 606% since 2009, while property taxes have increased only 22%.
BILD calls on municipalities in the GTA to invest the funds they have already raised to facilitate the growth and support the housing construction the region needs both for current residents and for the estimated four million new residents who will be living in the GTA over the next 30 years, before further increasing taxes and charges on new housing.
With over 1,300 member companies, BILD is the voice of the residential construction, land development and professional renovation industry in the Greater Toronto Area. The construction and renovation industry provides more than 230,000 jobs in the region and $ 26.9 billion in investment value. BILD is proudly affiliated with the Ontario and Canadian Home Builders Associations.
For more information or to schedule an interview, contact Justin Sherwood at email@example.com or 416-371-6005.
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