Many home-buyers feel as if the proposal to increase Toronto’s condo development fee is absurd; some developers even believe doubling charges would be “insane”. Regardless of opinion, condo-buyers can expect permit values to rise to $23,000 for a two-bedroom — $12,400 above current rates — if Toronto’s executive committee adopts the proposal. Since Toronto’s condo development fees are the lowest in all of the GTA, city officials believe that it is time to start charging more to cover growing infrastructure expenses. Even at doubling the price, however, Toronto’s condo development fees will only amass to 70% of projected infrastructure costs, meaning that fee hikes elsewhere may become a possibility in the future; one such suggestions is to increase street-level retail development fees by 32%.
Interestingly enough, Mayor Rob Ford believes that Toronto will still have the lowest fees in the GTA if the proposal is instated. For municipalities outside of the downtown core, residents pay an average of $32,000 per unit, which is higher than Toronto even with doubled charges. In saying this, however, Toronto is the only city to ask its residents to pay a municipal land transfer tax, which contributes approximately $350-million per year to city projects. Considering the $10,000 this tax adds to the average cost of a home, Toronto’s condo development fee hike could place downtown residency above the affordability price-point for many young home-buyers.
As developer Brad Lamb declares: “I think that the City of Toronto has feasted on the backs of condo buyers for too long, and with Section 37 charges and parks levies and educational levies and development charges and art charges and ridiculous Toronto Hydro hook-up fees, it has just become… actually disgusting.” Despite these objections, the city aims to collect $2.4-billion over the next decade through inflated condo fees; one third of this money will be placed into Toronto’s public transit funds. If the proposal moves forward, developers and home-buyers can expect to see the first increase in February, followed by an additional rise next July.