Cobourg to lower development charges to increase new home builds

Photo by Dan Jones.

By: Dan Jones, Northumberland 89.7 FM, Local Journalism Initiative Reporter

The Town of Cobourg has moved quickly to be eligible for a federal-provincial program aimed at incentivizing developers to build new homes.

The Town has until Friday to submit an application for its intent to participate in the $8.8 billion Canada-Ontario Partnership to Build with federal funding delivered through the Build Communities Strong Fund’s Provincial and Territorial stream.

Participating municipalities are being asked to reduce development charges of 30 to 50 percent. Currently Cobourg levies an approximate $35,000 development charge on each new home constructed. This fee is passed on to the home purchaser as it is amortized to their mortgage. For rental units, this is attached for rent payers. The municipality would be reimbursed dollar-for-dollar approved projects with decreased development fees.

Director of Development Chris Challenger presented to Council Tuesday at a special meeting explaining the funding envelope is open to not only housing, but water, wastewater, transportation and stormwater infrastructure, but that the program’s focus is increasing building permits.

“This program is really tied to building permits being issued, not necessarily planning approval. It’s very focused on the end result, which is building permits going out the door to developers,” Challenger said.

The provincial government is seeking to build 1.5 million homes by 2031 and is looking for municipalities to construct a mix of housing options, which are considered shovel ready.

The Town has identified five areas which could see increased housing development. Figures provided to Council suggest that housing development has stagnated since the COVID housing spike. Development charges collected: 2022-$1.858 million, 2023, $7.461 million, 2024 $647,000, 2025 $670,000.

Councillors were given a breakdown of their decreased development charges by 30 percent, 50 percent and 100 percent, unlocking potentially up to $50 million over a three year period.

Proposed projects are expected to be construction ready by 2030 and completed by 2035, giving municipalities time to advance priority projects and coordinate with builders. Challenger explained that Cobourg should develop cohesive proposals for funding.

Three area developers spoke to council, all in favour of reducing development charges, suggesting this would be great for new housing starts as it targets affordability. The federal and provincial governments have also temporarily suspended the HST on new homes for one year, providing more savings on new homes.

All municipalities are under tight deadlines to either opt in or out of the program, given municipal elections are in late October and Councils will enter their lame duck phase by August 21, when the election period officially begins.

Much debate among Councillors ensued as Miriam Mutton said it will be the provincial and federal taxpayers who are footing the bill for offsetting the development charges.

Council voted 6-1, in favour, with Mutton casting the nay vote.