Councillors vote to maintain exemption for the University of Guelph
Developers and at least one business group are saying that a proposed increase in development charges could make Guelph a more expensive place to live.
At Monday evening’s special meeting of council, councillors got their first look at proposed increases to the city’s development charges — fees that developers pay for many building projects across Guelph, with those funds going toward long-term capital costs and costs associated with an expanding city.
According to city staff, more than $100 million in development charges were collected between 2014, when the last change in development charges were made, and Nov. 30, 2018. During that same time frame, the city has spent a little under $90 million from those funds.
Under provincial legislation, municipalities must review and update their development charge bylaws every five years.
However, with some categories seeing double-digit increases in this update, some expressed concern that this could lead to fewer people making the decision to live in Guelph.
“The cost of residential building could drive up the cost of living in Guelph,” Kithio Mwanzia, head of the Guelph Chamber of Commerce told councillors, adding that this could make the city less desirable to live in, which in turn would make it more difficult for businesses to obtain and retain top talent.
Mwanzia said that a recent survey of local employers found that 65 per cent of them said their biggest challenge was recruiting and keeping top talent.
Audrey Jacob — appearing on behalf of Silvercreek Developments, Guelph-Wellington Development Association and Guelph and District Home Builders’ Association — agreed that housing costs would go up, and suggested that the city should instead phase in the increases over a two-year span.
The City of Toronto, which approved its new development charge rates in November, will be phasing in the increases through 2020.
However, the night’s final delegate, Laura Murr, pointed to a 2004 study from Watson and Associates — the same consultant hired by the city for the development charge study that led to the proposed increases — that determined “development charges represent a minor component of overall housing costs when compared to land and construction costs.”
Looking toward housing affordability, delegate Lin Grist says the city should look at including a provision for it in the new bylaw.
“If you want it to happen, then you need to put it into the development charge bylaw,” she said of incentivizing developers to include affordable units in their projects.
“Policy’s lovely for direction of travel … but unless you actually do it, it doesn’t have the heft of a bylaw.”
While there is not a specific exemption for affordable housing in the new bylaw, there is a proposed exemption for accessory apartments, with staff citing the province’s Promoting Affordable Housing Act from 2016.
“Despite that the regulation has not yet been finalized by the province, staff are recommending updating the bylaw to reflect this pending exemption as it is supporting affordable housing and a current policy gap that staff struggle to explain to the development community,” staff add in the report.
Last year, councillors voted in favour of changes to the city’s official plan, laying out revised affordable housing targets for Guelph.
Another issue potentially facing the city is a financial shortfall that was discovered during the study leading to the new bylaw.
City treasurer Tara Baker told councillors that Guelph can expect to see $50 million in the next decade in tax-supported growth costs. However, she noted the study found a shortfall of $1.25 million this year that will need to be added to the capital budget, up for a vote by council Jan. 30.
The treasurer added that a funding strategy to ensure shortfalls like this are taken care of will be developed in time for the 2020 capital budget.
The new development charge bylaw will be up for a final vote by council on Feb. 11.
100 vs. 25
One institution was slated to start paying development charges — however, council voted in favour of an amendment that would keep the exemption in place.
Currently, the University of Guelph is exempt from all development charges. However, staff recommended this change, and that the university receive a 25 per cent reduction in charges. When it comes to community beneficial developments, such as recreation, library or park infrastructure, the full exemption would still apply.
Following a question from Coun. Cathy Downer, Baker said that based on a five-year average, the full exemption costs the city about $200,000 per year.
Appearing as a delegate, Don O’Leary, the university’s vice-president of finance, administration and risk, said the university needs to maintain its exemption from development charges, given what the institution brings to the city.
“The university is a significant economic generator and allows the economy to thrive,” he said, adding that the school supports approximately 12,000 local jobs and brings nearly $800 million worth of economic activity to the city every year.
Making the university have to pay development charges, O’Leary said, would have a negative impact on any growth on campus, especially in light of last week’s announcement by the province that tuitions would be cut by 10 per cent.
O’Leary added that the university already gives the city an annual grant of $1.6 million to help offset the costs the university places on city resources, and that the school is willing to look at increasing that number.
Another reason that O’Leary said councillors need to consider in this issue is one of fairness. Another post-secondary institution in Guelph, Conestoga College, is exempt from development charges because it is a Crown corporation under the provincial government. The university is designated as an educational institution.
Council voted in favour of the amendment to give the university a full exemption 8-4, with Couns. Bell, Christine Billings, Rodrigo Goller and Mike Salisbury voting against. Coun. Dan Gibson was absent for the vote.