Lakeshore approves development charge cut to secure federal-provincial funding

Lakeshore is cutting development charges in half if the municipality secures an infrastructure grant.

Lakeshore council has voted in favour of slashing development charges in principle to secure millions of dollars in infrastructure funding.

Council met Tuesday, reviewing a report recommending support to cut development charges (DC) by 50 per cent in order to secure nearly $53-million in federal-provincial funding through the Canada-Ontario Development Charge Reduction Program — an initiative meant to spur housing starts.

The DC reduction is conditional on the grant application’s approval and would only be in effect once the higher level funding is secured to replace the lost municipal revenue.

This program was announced in March and is an $8.8 billion program to support municipalities in housing-enabling infrastructure projects.

In Lakeshore, this funding would be used to help pay for the Eastern Communities Water and Wastewater project. This project has an estimated cost of $74.5 million and construction is expected to begin in 2028 to support housing growth in Comber and Stoney Point.

To qualify, the municipality needs to reduce development charges for all residential housing types for three years.

Administration was recommending a 30 per cent reduction; however, council voted to change that to 50 per cent to up the chances of being successful in the application process.

Councillor Ryan McNamara says it’s great to know that if the municipality is unsuccessful, the development charges will remain in place.

“There’s a lot of chatter out there saying you’re signing up for a rate reduction, you’re going to lose revenue, and you’re not guaranteed any money on the other side,” said McNamara. “So, I want to make sure our residents understand we are agreeing to this in principle if we get the funding. If we don’t get the funding, we don’t have a loss and it’s a substantial financial windfall for us if this moves forward.”

Councillor John Kerr says losing DC revenue means the burden falls on taxpayers.

“I’m a fan that new build pays for new build. So having said that, when this said 30 per cent reduction should the grant application be successful, that to me is an easy dollar switch. That makes sense. Put up $3 million, get $30 million. Okay, that’s a deal, we’re up plus $27 million. That benefits everybody,” said Kerr.

Justin Rousseau, the interim CAO, said the municipality is constantly working to increase housing infrastructure, such as through the Housing Accelerator Fund.

“We have a HAF grant that is tied to a number of housing start applications — 900 over three years,“ said Rousseau. ”Certainly, 30 to 50 per cent reduction in DC’s not only would benefit this particular grant to get housing kickstarted here in Lakeshore, it would also help with the HAF grant and the housing targets as well.”

The grant would cover a maximum of 90 per cent of the eligible costs, meaning Lakeshore would still need to contribute at least 10 per cent of eligible costs.

Based on projected growth presented to council, over 800 new homes could be built during the three-year DC reduction period.

Current DC rates range from roughly $40,600 per single-detached home to $13,400 for special care units.

Municipalities have until June 19 to apply to the program.

On Monday, Kingsville council unanimously approved cutting DCs by 50 per cent.

Amherstburg and Tecumseh council are expected to meet next week to decide next steps on the application process.