New-home permits, impact-fee revenue surge

Hey there, time traveller!
This article was published 07/11/2019 (1829 days ago), so information in it may no longer be current.

The third quarter of 2019 was a bounce-back period for city hall and the impact fee imposed on new suburban home construction.

The city reports that between July 1 to Sept. 30, there were 349 building permits taken out for new homes on the city’s suburban fringe, for a total value of $4.1 million – a 14.8 per cent increase in the number of permits taken out during the same period in 2018, and a 34.2 per cent increase in the dollar value of those permits.

Since the fee went into effect on May 1, 2017, the city has collected $26.7 million for new home construction on the city’s suburban edge.

The third quarter results marks a reversal for the impact fee for 2019, where the revenue had declined for two straight quarters compared to 2018.

A copy of the Q3 2019 impact fee report can be found at: http://wfp.to/94S

The impact fee was approved by council in October 2016, following a stormy debate between city hall and the new home construction industry. The industry has since filed a legal challenge, which remains before court.

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.

While there has been pressure from Mayor Brian Bowman to spend the money, council decided to keep the revenue unspent in a dedicated reserve fund pending the outcome of the court case.

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 January 1, 2018 ($57.47 per square metre, or $5,338 per thousand feet). An increase of 3.5 per cent went into effect on Jan. 1 of this year, putting the rate at $59.48 per square metre, or $5,524.83 per thousand square feet.

There were 10 suburban areas were the fee was to be collected but to date, construction of new homes has only occurred in six of those areas.

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.

The largest share of the permits, and the dollars collected, has come from new construction in Waverley West (35.7% of permits, 34.6% of dollars), with the remainder from: Old Kildonan (22.9% permits, 24.9% dollars), South St. Boniface (19.5% permits, 19.2% dollars), Transcona West (14.2% permits, 12.9% dollars), and Wilkes (7.6% permits, 8.4% dollars). There was one permit taken out for a project in North Henderson.

aldo.santin@freepress.mb.ca