Impact fee income declines in early 2019

Hey there, time traveller!
This article was published 28/04/2019 (1971 days ago), so information in it may no longer be current.

Revenue generated from impact fees on new Winnipeg residential development declined during the first quarter of 2019, compared to the same period a year ago.

A report to Friday’s finance committee shows city hall collected $3.267 million from 317 permits between Jan. 1 and March 31 of this year, compared to $3.5 million from 372 permits in 2018 — a 6.7 per cent decline in revenue and 14.8 per cent decline in the number of permits issued.

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

The industry has since filed a legal challenge, with a court date expected in October.

The fee is aimed as offsetting 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.

An increase of 3.5 per cent went into effect Jan. 1, putting the rate at $59.48 per square metre, or $5,524.83 per 1,000 square feet.

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 $19.8 million — money that’s sitting in a reserve account pending the outcome of the legal challenge.

aldo.santin@freepress.mb.ca