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Mario Fazio's picture

Fees to build new homes

Thu, 05/02/2019 - 12:20 -- Mario Fazio

Many people assume that the local municipality are the ones who create new roads and subdivisions for builders to purchase lots and build their new homes.

In fact, all roads and  subdivisions are brought to you by private developers, not local municipalities. Everything from purchasing the raw land, environmental assessments, zoning change requirements, surveys, engineering drawings, to physical installation  of all of the infrastructure of the roads including pavement, curbs and sidewalks, and utility services, are paid for by the private developer. Municipalities have standards that developers must meet, including building road infrastructures that last for 25-50 years, as well as include all the water management studies and water control for the new subdivision.

On top of paying for every single infrastructure item, builders must also provide, free of charge, parkland and future school site (s) land . The developer must also pay for all of the local municipal fees to administer, draw up subdivision agreements, legal fees, municipal engineering fees, inspection fees, and all other provincial and regional fees.

Once the new lots are ready, and a building permit is applied for by a new home builder, there are more fees to pay to the municipality. These fees include building permit fees, development charge fees, home inspection fees  and in some cases fees to increase expansion of current municipal services to the area.

So when you are wondering why new home prices are going up all over the province and lot sizes keep shrinking, look to your local, regional and provincial governments for explanations .

After all, they get everything paid for by the developer/ builder, and are handed new roads, parks, school sites and building lots to tax and create more revenue for the municipality.

All the municipalities have to do is maintain them after the developer warranties expire. The large development fees that are paid by the builders,  were originally supposed to be an insurance fund for maintenance, paving and upgrading the valuable assets that were given to the municipality. All municipalities have different fee structures, and all are under pressure to continually increase these fees . Some municipalities are doubling or tripling the fees. Fees that were introduced in the Late 1960’s as a insurance fee for future road maintenance are now being used for other purposes, and the infrastructure that they were meant to maintain is decaying at a rapid pace.

Perhaps it’s time to privatize all roads, and have local home owners look after the upkeep in order to get reductions in municipal taxes. It seems to work for toll roads. Just look at the beautifully maintained highway 407, or any other toll road.

Again, if you are buying or selling real estate alway use the services of a experienced Realtor that has your best interests at heart.

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