Developers must pay more: report

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This article was published 01/09/2016 (3358 days ago), so information in it may no longer be current.

A consultant’s study has concluded Winnipeg isn’t recovering the cost imposed on civic services from new development and it recommends a series of growth fees to lighten the financial burden on property taxpayers.

Two reports from Hemson Consulting released Thursday make the case Winnipeg hasn’t been able to construct the infrastructure it needs because it doesn’t have the money; and it doesn’t have the money because new developments haven’t been paying their share for civic services.

The Hemson reports say without new development fees, property owners will face increasingly higher property taxes — the argument Mayor Brian Bowman has been making since he first raised the issue in February in an address to the Winnipeg Chamber of Commerce.

“The key question is, with a growing city, how are we going to pay for that growth?” Bowman said to reporters following the release of the Hemson reports. “Is it going to be primarily on the shoulders of all existing property owners or it is going to be rebalanced so growth is being paid for by those responsible for that growth?”

Bowman and 11 councillors met behind closed doors for two hours Thursday to hear the presentation from Hemson Consulting teams. Four councillors — Janice Lukes, Jeff Browaty, Russ Wyatt and Jason Schreyer — did not attend the meeting because of other commitments or they were out of town on vacation.

Inner-city Coun. Ross Eadie viewed the findings positively. He has argued for years that suburban residential development is putting an unfair financial burden on existing homeowners.

The recommendations have turned Bowman and Eadie — a harsh critic of the mayor during his first two years in office — into unlikely allies.

“What I’ve been saying since before I was elected to council in 2010, is that growth doesn’t pay for growth,” Eadie (Mynarski) said.

The Hemson reports, he said, are “a sound professional document that proves out what I and many other councillors have been saying for years.”

Hemson Consulting was awarded the contract for the study in late May, charging city hall $149,800 for the three-month project.

The reports propose that to balance the city’s financial situation, a series of new fees should be charged on residential and non-residential developments. For an 1,800-square-foot home, Hemson calculated the charge at $18,302; for an 850-square-foot condominium unit, the charge would be $8,647.

There are numerous charts sprinkled through the combined 155 pages of the two reports. Based only on the proposed fee on new single-family homes, the city could expect to collect more than $34 million in the next 10 years to offset the cost of infrastructure.

Potential additional millions of dollars would be raised from the construction of apartments and condominiums, and non-residential developments including new office space, retail, new manufacturing and institutional centres such as long-term-care facilities.

The proposed fees in Hemson’s final report are considerably less than what the consultant had speculated only two weeks ago in a briefing to the development community: a $30,000 charge on a new residential building lot.

An explanation for the change in amounts wasn’t clear in the reports and provided ammunition for critics who believe the fees are arbitrary and without foundation.

“If you have a badly constructed fee, then it’s just a tax no matter what the number is,” said Mike Moore, president of the Manitoba Home Builders Association.

Developers have argued existing fees cover the cost of basic services for new neighbourhoods and the property taxes generated by new homes contribute to city coffers. Moore and others said a proposed growth fee is unwarranted and is being driven by Bowman to balance the city’s budget.

Moore said the final recommendations were predictable, as they had been foreshadowed by the Hemson team in two recent meetings with the development industry. Moore said the development industry has its own consultants who will review the Hemson data and recommendations. He said a critique of the Hemson documents will be released next week.

Bowman acknowledged the issue of a new development fee has divided councillors.

Eadie said some councillors who favour the fees want some development to be exempt — such a downtown or affordable housing.

Several councillors, including Brian Mayes, Lukes and Browaty, were cautious about the recommendations.

Lukes and Browaty said the data and conclusions need to be analysed.

Bowman said he’s satisfied the report makes the case for development fees, but was clear council has to decide if fees should be implemented. There are also the questions of what the fees should be, on what type of developments they should apply, if any development should be exempt and when it should take effect.

Bowman said the civic administration has been directed to produce a report outlining various options for council’s consideration “as soon as possible,” adding he wants the debate and a decision reached before city hall considers the 2017 budget.

Bowman said consultations will continue among councillors and with the development community, but he also said he’s relying on the opinions of homeowners to make his case in support of development fees.

“We have an obligation to all current homeowners in Winnipeg to keep their taxes as low as possible,” Bowman said.

“The question is, whether or not we want all current homeowners to pay more or do we want those responsible (for growth) to pay more.”

aldo.santin@freepress.mb.ca

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