Qualico’s decision to halt development defended

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This article was published 05/09/2016 (3355 days ago), so information in it may no longer be current.

The president of the Manitoba Home Builders’ Association says he doesn’t blame Qualico for pulling out of a Sage Creek development as the potential of growth fees looms over developers in Winnipeg.

Qualico indicated to the city it would not continue the development in southeast Winnipeg after Hemson Consulting released two reports, commissioned by the City of Winnipeg, suggesting the city isn’t recovering costs developers impose on civic services and that developers should be charged growth fees.

Mike Moore said Qualico’s move isn’t an attempt to leverage Mayor Brian Bowman to reconsider.

“It would be a business decision,” Moore said.

“Eric Vogan (Qualico vice-president of community development) explained it. He’s faced with a $3-million risk. He said to just go blindly ahead without knowing where these growth taxes are potentially going would be irresponsible on his part to do so. Development business people don’t make idle gestures. This is a business decision.”

Attempts to reach Qualico for comment were not successful.

In an email statement, Bowman said it was unfair for current property owners to be paying for new developments in suburban neighbourhoods.

“I have been clear that I do not think it’s fair that existing property owners are having to pay for all the infrastructure costs associated with a growing city through significantly higher property taxes. I believe these costs need to be better shared, and better balanced, so existing property owners, themselves, are not responsible for all these costs,” Bowman said.

But Moore said that’s not the case.

“(Current property owners) are not taking on the extra costs,” Moore said. “You have to remember that 100 per cent of all the infrastructure within the new subdivision is paid for upfront by the developer — the roads, the curbs, the gutters, the hydro, the water, the storm sewers, the sewer system. Everything. One hundred per cent of it, not to mention the roads on the outside surrounding the subdivision, are all paid for by the developer. The city puts up nothing in that. It’s all paid for upfront.

“The new homebuyer is paying for, when he buys his new home, is paying for 50, 60, 70 years of infrastructure. He’s likely to live there seven or 10 years, but he’s paying for all that upfront.”

Meanwhile, the report from Hemson Consulting concluded the model in Winnipeg works differently than Moore maintains.

“Unlike many cities in Canada which use charges to pay for first-round infrastructure, including a large number Manitoba’s municipalities, Winnipeg is reliant on property taxes and utility rates to fund these costs,” it read. “This reliance has led to competing funding priorities and a growing infrastructure deficit.”

Bowman’s statement also said Qualico’s decision was premature, as the reports were only released last week.

“Up until now, industry groups and homebuilders have been advocating for more time and more discussion before any decisions are made,” the statement read.

“It appears they now want decisions expedited in order to provide clarity and certainty moving forward.

“We need to take another deep breath. The concept of recouping the costs of growth through fees is not new. Every municipality neighbouring Winnipeg uses this tool, and just about every municipality in Canada uses it as well. Why should Winnipeg be any different?”

Jonathan Hildebrand, who manages communications for the mayor, said the fees would not be applied retroactively and that the public service is undertaking its own review of the report and will bring forward recommendations on how to proceed. He said the decision on whether to implement fees and how fees would be structured would go to council.

Bowman said he plans to meet with key industry groups, including the Manitoba Home Builders’ Association, in the near future to discuss the report.

— with files from Aldo Santin