Tuesday, August 27, 2013
Developers warn Metrolinx Big Move transit plan will add thousands of dollars to cost of new homes
The provincial agency has recommended a one per cent sales tax, a five-cent-a-litre gas tax, parking levies, and a 15 per cent increase in development charges to raise $2 billion annually for transportation infrastructure over the next 25 years.
It would boost rapid transit in the Greater Toronto and Hamilton Area (GTHA) from the current 500 kilometres of lines to 1,700 kilometres, and improve access so that 75 per cent of residents would be within two kilometres of a stop.
But the Ontario Home Builders’ Association, the Building Industry and Land Development Association and the Hamilton-Halton Home Builders’ Association say the scheme “makes transit-oriented communities less affordable by imposing additional charges, levies and taxes on new home buyers and new businesses.”
“We strongly oppose the proposed revenue (tax) tools which disproportionately target new home buyers and new businesses across the GTHA,” the industry groups say in a July 8 letter to Metrolinx president CEO Bruce McCuaig obtained by the Star.
“This is an inequitable and unfair approach that will embed the cost of infrastructure, meant to last upwards of 75 years, into the . . . mortgages of new home purchasers or onto the costs of new employment centres,” the missive said.
Metrolinx countered that “developers are a major beneficiary of growth therefore it is not unreasonable to ask them to help pay for it.”
“During our (public) consultations across the GTHA we consistently heard about the need for more public transit and the impact of congestion,” said the agency’s Anne Marie Aikins, noting gridlock costs the local economy $6 billion a year in lost productivity.
“People told us they were willing to pay more for transit if they knew it was going exclusively to pay for more transit in their communities. We listened,” Aikins said.
“We acknowledged that there will be a cost to households for this needed investment in transit — that’s why we are upfront about the costs,” she said.
Indeed, when Metrolinx unveiled its investment strategy for bankrolling transit in May, it insisted the cost of the Big Move to the average household would be $477 a year in additional levies.
The builders said raising sales tax rates and development charges would “erode affordability” and mean “new home buyers and new businesses will take on costs that are completely disproportionate to existing residents and businesses.”
They calculate that a new house in Markham, for example, could see an extra $15,000 in charges. That’s over and above the $118,400 in average government-imposed fees now included in the price.
“There is no new money to be found in a system where nearly one-quarter of the price of a new home can be attributed to taxes, charges and fees,” said the letter signed by Joe Vaccaro of the OHBA, Bryan Tuckey of BILD, and Mathieu Langelier of the HHHBA and copied to Ontario Premier Kathleen Wynne and senior cabinet ministers.
The industry representatives point out that current development charges total $19,956 per home in Toronto, which city council is expected to double. In Oakville, it’s now $58,929 a house while in Brampton the charges are $63,505, Markham $62,391, Ajax $35,590, and $35,682 in Hamilton.
“A 15 per cent increase to these charges represents nearly $10,000 in new taxes in a number of GTA communities,” they added, vowing to lobby the government on “the far-reaching impacts of these proposals on new home buyers, new employers and renovation consumers.”
Metrolinx’s Aikins, for her part, emphasized that “it will be worth the investment at getting better mobility for residents and businesses.”
“We ensured fairness,” she said. “The costs and benefits of the investment strategy were distributed fairly across all population groups. Tools were selected so that no one group pays too much or benefits too little.”
Wynne’s minority Liberal government has a consultative panel studying Metrolinx’s recommendations and getting feedback on the viability of the plan.
The premier has said road tolls or some other charges loom, but there’s no firm timetable yet for when the Big Move could begin.
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