Vaughan "Dramatically" Drops Development Charge Rates

On Tuesday, Vaughan Mayor Steven Del Duca and Members of Council approved substantial reductions in development charge rates in the name of encouraging development and building more homes for their growing population.

Before the reductions, Vaughan had some of the highest development charges in the Greater Toronto Area. From 2009 to 2021, Vaughan's development charge rates increased by a whopping 229%, and another 66% since 2018, according to figures from the City.

The City also shared that, prior to Tuesday, the development charge rate for a single low-rise home (single- or semi-detached) clocked in at $94,466. Now, that charge has been nearly cut in half, to $50,193 — a $44,273 difference.

“Development charges have become an unfair tax burden on homebuyers. Too many of our residents, in particular young families in our community, have seen their dream of buying a home close to where they grew up, disappear completely as housing prices have spiraled out of control," said Mayor Del Duca in a news release. "We have a housing affordability crisis and it’s time for us to get real about the solutions needed to solve it. Today’s decision by Vaughan Council to dramatically reduce our development charges for the foreseeable future is a strong step in the right direction. I urge other municipalities to follow our lead and do the right thing.”

The change is in line with a Member’s Resolution put forth by Mayor Del Duca in mid-September, to "find solutions to this housing crisis, position the City to address affordability challenges, and to make life easier, particularly for young families," according to the press release. Most importantly, it asked City staff to report back with options to amend Vaughan’s current Development Charges By-Law, which they did at yesterday's meeting.

Council's adoption of the staff report means that staff will be revising the development charge rates on all residential development applications to the rates in effect on September 21, 2018, until November 19, 2029. Staff will also initiate a new development charge background study and Development Charge By-law, and Council will approve a new Development Charges Rate Reduction and Deferral for Residential Development Policy. Finally, staff will stop charging development charge interest on residential developments.

The Building Industry and Land Development Association (BILD) has stated that they applaud the City of Vaughan for their efforts to support increased home construction.

“BILD recognizes and commends Mayor Del Duca and the City of Vaughan for taking bold action to address housing supply and the cost to build by lowering development charges,” said Dave Wilkes, President and CEO of BILD. “This will enhance the financial viability of future projects, unlocking potential investment and stimulating supply.”

Wilkes goes on to acknowledge the barrier that increasing development charges has created for developers and builders. “The solution is clear: to fix the Greater Toronto Area’s housing crisis, we must first fix the cost to build in order to jump-start stalled construction and get housing starts back on the right trajectory,” said Wilkes. “[...] The economic viability and social fabric of all communities across the GTA are at stake.”