“money makes the world go around.”
The moment I learned about Ontario’s Government’s effort to build more housing fast – Bill 23: The More Homes built Faster Act, I was reminded of the expression above.
Of course, focusing only on the speed part of execution, the negative consequences of dizziness/disorientation would invariably follow.
With constant news about the lack of housing, an initiative like Bill 23 seems to provide quicker and necessary answers for our city, Toronto and beyond.
However, one particular item in the Bill needs to be updated: Eliminating development charges.
As the name indicates, build “faster”, the Bill had many provisions to speed up the building process.
One of the provisions in the Bill, the elimination of development charges, is unprecedented and could bring many negative consequences to all of us and future generations.
There would be many potential repercussions of removing developers’ fees, leaving the cityscape vulnerable to unforeseen housing, infrastructure, and urban development challenges.
As the dust settles(?) on this contentious debate, the city must brace itself for the consequences of this drastic change, seeking a delicate balance between progress and stability in its architecture and urban evolutions.
Here are the seven detrimental impacts for the city, and item #6 hits me personally.
1. Strain on Infrastructure:
Development fees often help fund essential infrastructure projects, such as roads, public transportation, and utilities, necessary to support new developments.
Without these fees, the burden of financing these projects may fall on the city’s budget or taxpayers, leading to delays or inadequate infrastructure to accommodate the growing population.
For example, the city had to allocate more funds from its already tight budget to maintain community benefits.
The development of parks, recreational facilities, and cultural spaces became delayed or scaled back, leaving residents feeling the absence of crucial amenities that had once enriched their daily lives.
As development continued unchecked, the city’s green spaces faced increasing threats.
Environmental initiatives, once supported by developers’ fees, lost their momentum.
The cost of preserving and restoring green areas now fell upon the taxpayers, further burdening them with additional expenses to protect their cherished natural spaces.
2. Reduced Affordable Housing:
Although the mandate of Bill 23 is to increase housing stocks fast, whether those housing would be affordable enough to own would be entirely a “separate” discussion.
There have been many oppositions to the Bill from housing advocates. The latest CBC News illustrates the exact argument.
Development fees are sometimes utilized to fund affordable housing initiatives. Removing these fees could hinder the city’s ability to provide affordable housing options, exacerbating the existing housing affordability crisis and widening the gap between the rich and the marginalized communities.
3. Environmental Impact:
Development fees can be used to finance eco-friendly projects and ensure sustainable urban planning.
By eliminating these fees, developers may have fewer incentives to incorporate environmentally friendly features into their projects, potentially harming the city’s efforts toward sustainability.
4. Decreased Community Benefits:
Development fees are often channelled towards community benefits, such as parks, recreational facilities, and cultural spaces.
Eliminating these fees may lead to fewer amenities and services for residents, impacting their quality of life and sense of community.
Small businesses often play an integral role in fostering community engagement and nurturing local partnerships.
As developers’ fees dwindled, so did the opportunities for small businesses to contribute to community benefits and initiatives.
This reduced presence in community development could lead to a sense of disconnection between these businesses and the neighbourhoods they serve.
5. Potential Over-development:
The absence of development fees might create an incentive for increased development without adequate planning or consideration of the city’s long-term growth and environmental impact.
Uncontrolled development could lead to overcrowding, traffic congestion, and a loss of green spaces.
6. Impact on Small Businesses:
This point resonates personally.
As a small architecture office owner, I often experience difficulties competing against larger firms for potential projects, especially in public projects.
Mandating development charges is one way to level the playing field for all sized architecture firms to pause/consider whether to enter the ring of highly competitive matches.
Eliminating development fees in Bill 23 may disproportionately benefit larger developers, making it challenging for smaller businesses to compete in the market.
This could result in reduced diversity in the architectural landscape and fewer opportunities for local entrepreneurs.
With developer fees removed, larger corporations and established developers have a financial advantage over small businesses.
These bigger players could afford to undertake larger projects without the added financial burden, making it difficult for smaller businesses to compete and secure viable projects.
Reduced Profit Margins are another negative impact facing small businesses. For them, every penny counts.
Eliminating development fees meant that the costs associated with essential services like road maintenance, public amenities, and infrastructure upgrades were no longer shared with developers.
This expense increase could significantly erode small businesses’ already narrow profit margins, making it harder for them to sustain operations or invest in future growth.
7. Inequitable Distribution of income:
Development fees can help address income inequality by directing funds to underserved areas.
Without these fees, there might be a concentration of development in affluent neighbourhoods, exacerbating existing disparities in the city.
The absence of development fees limited the types of projects that small businesses could take on.
With fewer opportunities in the market, these businesses faced a lack of diversification in their project portfolio, leaving them vulnerable to economic downturns that might impact specific sectors.
Final Thought
Eliminating development fees in Bill 23 could have far-reaching detrimental consequences for the city, affecting its infrastructure, affordable housing options, environmental sustainability, community amenities, and small businesses.
It’s essential for policymakers to carefully consider the potential negative impacts and explore alternative solutions to strike a balance between supporting development and ensuring the well-being of the city and its residents.
As I am reminded of the importance of money in our “world going around” power, eliminating (huge) money from developers’ expenses leaves me with dizziness…not in a good way.
Life Outside of Design Studio 