October 18, 2017

Winnipeg
8° C, Clear

Full Forecast

Advertisement

Advertise With Us

Impact fee puts $2M in city coffers

Officials split on whether to spend revenue due to court challenge

City hall has collected almost $2 million in impact fee revenue from developers and builders since May 1, twice as much as officials were projecting to the end of the year.

New figures to the end of September show that builders and developer paid $1.96 million on permits taken out on 216 residential units on the city’s suburban fringes.

“It’s more than what city hall was expecting, but it’s likely a lot less because so much more work was done before May,” said Mike Moore, spokesman for local homebuilders and the residential development industry.

A year ago, council approved a controversial new fee on new home construction, to be applied May 1.

Subscribers Log in below to continue reading,
not a subscriber? Create an account to start a 30 day free trial.

Log in Create your account

Add a payment method

To read the remaining 451 words of this article.

Pay only 27¢ for articles you wish to read.

Hope you enjoyed your trial.

Add a payment method

To read the remaining 451 words of this article.

Pay only 27¢ for articles you wish to read.

City hall has collected almost $2 million in impact fee revenue from developers and builders since May 1, twice as much as officials were projecting to the end of the year.

New figures to the end of September show that builders and developer paid $1.96 million on permits taken out on 216 residential units on the city’s suburban fringes.

PHIL HOSSACK / FREE PRESS FILES</p><p>Council approved a new fee, at the rate of $5,084 for every one thousand square feet, on new home construction in some areas.</p>

PHIL HOSSACK / FREE PRESS FILES

Council approved a new fee, at the rate of $5,084 for every one thousand square feet, on new home construction in some areas.

"It’s more than what city hall was expecting, but it’s likely a lot less because so much more work was done before May," said Mike Moore, spokesman for local homebuilders and the residential development industry.

A year ago, council approved a controversial new fee on new home construction, to be applied May 1.

The fee is added to permits taken out for new home construction in 10 suburban fringe areas, at the rate of $5,084 for every 1,000 square feet.

The fee is supposed to offset city costs associated with services required as a result of new development, including recreational and leisure facilities, transit and other infrastructure.

Similar charges for other types of development — industrial, commercial, office and institutional space — are supposed to come into effect in those same suburban areas no sooner than November 2018, followed by charges for all development in all areas of the city by November 2019.

The residential development and homebuilding industries opposed the fee and filed a legal challenge in January.

They argue the city doesn’t have the legal authority to impose the fee and that the industry already pays for growth-related infrastructure. Both sides are preparing affidavits in support of their positions.

No hearing dates have been set.

Right now, the $1.96 million is sitting in a dedicated reserve account waiting for council to allocate the funds to the appropriate infrastructure projects, but the politicians and administration are divided on when the money should be spent.

Coun. John Orlikow, chairman of council’s property and development committee, said he would like to see council allocate the $1.96 million to specific capital projects.

He acknowledged there are others on council and in the administration who want to wait for the outcome of the legal challenge before spending that money.

Orlikow said he sees no reason for caution, explaining the city’s experts and its legal staff told council it could impose the new fee.

"If we didn’t believe our legal case was solid, then we shouldn’t have done this," Orlikow said.

"My opinion is that money is available now. We don’t need to wait for (the outcome) of a legal case — we know we’re in the right, and we should go forward with this."

Orlikow said despite the court challenge, he hopes to form a working group with representatives of residential developers and homebuilders.

It would provide council and the administration with recommendations on how the impact fee would be applied to other types of development and make recommendations on future fee rates based on market conditions.

The working group is supposed to make recommendations on which projects should be funded by the new fee.

While council approved the fee to be charged in 10 suburban areas, permits were only taken out in five.

The report shows most of the impact fee revenue has been collected from new residential construction in two areas: Waverley West (69 units) and Old Kildonan (63 units). Combined, developers and builders paid $1.2 million in impact fees.

aldo.santin@freepress.mb.ca

Read more by Aldo Santin.

Advertisement

Advertise With Us

History

Updated on Saturday, October 7, 2017 at 9:19 AM CDT: Edited

You can comment on most stories on The Winnipeg Free Press website. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to The Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to The Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective January 2015.