City impact fee numbers decline in second quarter

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This article was published 02/09/2019 (1844 days ago), so information in it may no longer be current.

Impact fee revenue has declined for the second consecutive quarter.

Winnipeg city hall is reporting the controversial charge on new residential development in the suburbs generated $2.81 million during the second quarter of 2019 (April 1-June 30), down 16.5 per cent from $3.37 million for the same period in 2018.

In a report to the Sept. 9 finance committee meeting, city administration notes the revenue was based on 293 permits during the second quarter where the impact fee was charged — down from 387 permits in Q2 2018 (a decline of 24.3 per cent).

The impact fee was approved by council in October 2016, after a stormy debate between city hall and the home construction industry, and went into effect May 1, 2017, on new homes in 10 areas, mostly in the suburban fringe.

Industry members have since filed a legal challenge, with a court date expected in October.

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.

The initial rate in 2017 was $54.73 per square metre ($5,084 per 1,000 square feet). There was an automatic five per cent increase in the fee amount effective Jan. 1, 2018 ($57.47 per square metre). An increase of 3.5 per cent went into effect Jan. 1, 2019, putting the rate at $59.48 per square metre.

While 10 areas were identified, new residential construction to date has occurred only in six: Wilkes, Waverley West, Old Kildonan, Transcona West, South St. Boniface, and North Henderson.

Council has to decide if, and when, the impact fee should be applied to other types of development (commercial, industrial, institutional) in those same 10 areas and, eventually, across the city.

Since the fee went into effect, city hall has collected a total of $22.6 million — money that’s sitting in a reserve account, pending the outcome of the legal challenge.

The Q2 fall — in both dollar amount and number of permits — is greater than the decline in the first three months of 2019, compared to the same period in 2018 (6.7 per cent drop in revenue and 14.8 per cent decline in permits in neighbourhoods where fee is charged).

aldo.santin@freepress.mb.ca