municipality of clarington 2020 development charges

Council Presentation

April 6, 2020

Municipality of Clarington

2020 Development Charges Background Study

Agenda

• Introduction

• Study Process

• Legislative Changes

• Development Charges (D.C.) Calculation Methodology

• D.C. Background Study Findings

• D.C. Impacts and Municipal Comparisons

• D.C. By-law Policies

• Next Steps

2

Development Charges

• The purpose of development charges (D.C.) is to recover the capital

costs associated with the increase in need for service arising from

residential and non-residential growth within a municipality

• Municipalities are empowered to impose D.C.s via the Development

Charges Act,1997, as amended (D.C.A.)

• The Municipality of Clarington’s D.C. By-law 2015-035 came into effect

on July 1, 2015

• Under the requirements of the D.C.A., a D.C. by-law expires 5 years

after the date it came into effect (i.e. June 30, 2020)

Introduction

3

Study Process

4

D.C. Background

Study and proposed

D.C. by-law available

to public

Public Meeting of

Council

September 2019

– February 2020

Growth forecast,

data collection,

preparation of D.C.

calculations

Developer

Consultation

D.C. By-law

AdoptionJune 15, 2020

February 19, 2020

May 11, 2020April 6, 2020

Council

Presentation

April 15, 2020

Legislative Changes

5

Changes to the D.C.A.

• More Homes, More Choice Act (Bill 108) was introduced in the Ontario

Legislature on May 2, 2019 and received Royal Assent on June 6, 2019

• An Act to amend various statutes with respect to housing, other

development and various other matters, including:

• Schedule 3 – Development Charges Act

• Schedule 12 – Planning Act

• With respect to D.C.A. amendments, the Act redefines eligible

services, the determination of the charge for developments

arising from Site Plan or Zoning By-law Amendment approvals,

and timing of collection for specific types of development

More Homes, More Choice Act

6

• Sections of the Act pertaining to D.C.A. that have been proclaimed

include:

• Sched. 3 - Section 1, subsections 3(4), 5(1) and 13(5) and sections

14 and 15 came into force on the date of Royal Assent

• Sched. 3 - Subsection 8(1), sections 9 and 12, and subsection 13(6)

come into force on January 1, 2020

• February 28, 2020 – Province released an updated draft regulation

related to the D.C.A. and the Planning Act regarding Community

Benefit Charges (C.B.C.)

• This regulation is posted on the Environmental Registry of Ontario

for public comment which is open until March 30, 2020

• Proclamation of the remaining sections the Act, and posting of final

regulations, will require municipal compliance within one year of

proclamation (based on current draft regulation)



7


• Notable sections proclaimed include:

• s. 5(1) – provides for transition of ineligible D.C. soft services to a

C.B.C., under the authority of the Planning Act

• By-laws expiring after May 2, 2019 may remain in force as they apply to

soft services until the earlier of: when the bylaw is repealed, the day the

municipality passes a C.B.C. By-law, or the prescribed date

• s.s. 8(1) – installment payments for rental housing development

(that is not non-profit housing), institutional development and non-

profit housing development, and the date when the amount of the

charge is determined (application of Site Plan or Zoning Bylaw

Amendment, where applicable)

• Includes provisions for interest on installments, unpaid amounts added

to taxes, changes in development type, prescribed amount of time


8


• Payment in installments

• Rental housing and institutional developments pay D.C.s in 6 equal

annual payments, commencing from the date of occupancy

• Non-profit housing pay D.C.s in 21 equal annual payments,

commencing from the date of occupancy

• Determination of the D.C.

• D.C. for developments proceeding through Site Plan or Zoning Bylaw

Amendment will be determined based on the charges in effect on the

day of the application

• Applies if building permit issuance occurs within 2 years of planning

application approval

• D.C. for developments not proceeding via these planning approvals will

be determined at the earlier of building permit issuance or occupancy


9

• Changes to Eligible Services

• Eligible services imposed by the Municipality of Clarington include:

• Services related to a highway (i.e. roads and related services);

• Fire protection services;

• Parks development services, not including land (draft regulation);

• Recreation services (draft regulation);

• Public library services (draft regulation);

• Administration services (i.e. D.C. Background Study); and

• Storm water drainage and control services (area-specific D.C.)

• Removal of 10% statutory deduction for all eligible services



10

• “Soft Services” will be removed from the D.C.A. and considered as part

of a Community Benefit Charge under the authority of the Planning Act

• These would include Parking Services, Animal Services and

portions of Administration Services, currently imposed under the

Municipality’s D.C. by-law

• C.B.C. can be used to recover D.C. ineligible services, parkland, and

community benefits for bonus zoning permissions, or municipalities can

maintain current parkland dedication policies

• C.B.C. to be imposed by by-law, requiring a C.B.C. Strategy, which

may be appealed to LPAT

• Draft regulation prescribes the maximum C.B.C. as a percentage of

land value for lower-tier (10%), upper-tier (5%) and single tier (15%)

municipalities



11

Development Charges

Methodology

12

Development Charges Methodology

13

D.C. Background Study

Findings

14

Growth Forecast

• Consistent with Region of Durham Official Plan to 2031

15

Net Population Residential Units Employment 2

Sq.m. of G.F.A.

Early 2020 98,394 36,112 21,861

Early 2030 128,526 47,843 28,314

Mid 2031 133,734 49,799 28,918

10-year (2020-2030) 30,132 11,731 6,453 408,000

11-year (2020-2031) 35,340 13,687 7,057 461,000

1. Excludes institutional population

2. Excludes No fixed place of work & work at home

Time Horizon

Residential 1

Non-Residential

Incremental Change

Increase in Need for Service

Proposed Services

• 10-Year Services (2020-2029)

• Fire

• Parks and Recreation

• Animal Services

• Library

• Parking

• Administration Studies

• 11-Year Services (2020-2031)

• Roads and Related

• Area-Specific Services (2020-

2031)

• Stormwater Management

Services

D.C. Service Definitions

16

Anticipated Capital Needs

Gross Capital Costs - $414.3 million

17

D.C. Recoverable$255.5 million

62%

Benefit to Existing Development$83.2 million

20%

Post Period Benefit$36.4 million

9%

Reserves$29.0 million

7%

Other (e.g. 10% Statutory Deduction)

$9.5 million

2%

D.C. Recoverable Costs by Service

$ 255.5 million

18

Roads and Related$164.1 million

64.2%

Parks and Recreation$69.8 million

27.3%

Library Services$9.1 million

3.6%

Fire Protection Services

$5.6 million

2.2%

Administration$3.7 million

1.5%

Stormwater Management$2.8 million

1.1%

Parking Services$0.3 million

0.1%

Animal Services$0.2 million

0.1%

Calculated Schedule of Development Charges

Municipal-Wide Services

19

Single and Semi-

Detached Dwelling

Apartments - 2

Bedrooms +

Apartments -

Bachelor and 1

Bedroom

Other Multiples Industrial Non-Industrial

Municipal Wide Services:

Roads and Related Services 11,554 6,151 3,776 9,470 32.74 99.95

Fire Protection Services 454 242 148 372 2.47 2.47

Parking Services 24 13 8 20 0.13 0.13

Parks and Recreation Services 6,900 3,674 2,255 5,656 - -

Animal Services 15 8 5 12 - -

Library Services 898 478 294 736 - -

Administration 301 160 98 247 1.63 1.63

Total Municipal Wide Services 20,146 10,726 6,584 16,513 36.97 104.18

Service

RESIDENTIAL NON-RESIDENTIAL (per sq.m. of Gross

Floor Area)

Area-Specific Services - Clarington Technology Park

Service Per Net Hectare

Stormwater Management Services (Quality Control) 22,293

Stormwater Management Services (Quantity Control) 14,050

D.C. Impacts and Municipal

Comparisons

20

Municipality’s Current and Calculated Development Charges

Single Detached Residential Dwelling Unit

21

Service Current Calculated


Roads and Related Services 7,882 11,554

Fire Protection Services 911 454

Operations Services 884 n/a

Parking Services 45 24

Parks and Recreation Services 7,154 6,900

Animal Services n/a 15

Library Services 844 898

Administration 428 301

Total Municipal Wide Services 18,148 20,146

Residential (Single Detached) Comparison

Municipality’s Current and Calculated Development Charges

Non-Residential Development (per sq.ft. of gross floor area)

22



Roads and Related Services 27.76 32.74

Fire Protection Services 5.19 2.47

Operations Services 5.05 n/a

Parking Services 0.26 0.13

Parks and Recreation Services - -

Animal Services n/a -

Library Services - -

Administration 2.46 1.63

Total Municipal Wide Services 40.72 36.97

Industrial (per sq.m.) Comparison



Roads and Related Services 62.08 99.95

Fire Protection Services 5.19 2.47

Operations Services 5.05 n/a

Parking Services 0.26 0.13

Parks and Recreation Services - -

Animal Services n/a -

Library Services - -

Administration 2.46 1.63

Total Municipal Wide Services 75.04 104.18

Commercial/Institutional (per sq.m.) Comparison

Municipal D.C. Comparison

Single Detached Residential Dwelling Unit

23

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$ p

er

un

it

Residential Development ChargesPer Single Detached Dwelling for Greater Toronto Area Municipalities

as of February 18, 2020

Upper Tier Lower/Single Tier Education

BB=Built Boundary & GF=Greenf ield.1. A component of the charge has been conv erted f rom a per hectare charge to a hy pothetical single detached unit .

2. Upper tier charges ref lect proposed 2020 charges.


Square Foot of Retail Gross Floor Area

24

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$ p

er

sq.f

t.

Non-Residential Development ChargesPer GFA of Retail Floor Area for Greater Toronto Area Municipalities


Upper Tier Lower Tier Education

BB=Built Boundary & GF=Greenf ield.1. A component of the charge has been conv erted f rom a per hectare charge to a hy pothetical charge per sq.f t. of G.F.A.



Square Foot of Industrial Gross Floor Area

25

$-

$10

$20

$30

$40

$50

$ p

er

sq.f

t.

Non-Residential Development ChargesPer GFA of Industrial Floor Area for Greater Toronto Area Municipalities


Upper Tier Lower Tier Education

BB=Built Boundary & GF=Greenf ield.1. A component of the charge has been conv erted f rom a per hectare charge to a hy pothetical charge per sq.f t. of G.F.A.


D.C. By-law Policies

26

D.C. By-Law Policies

• The Municipality’s D.C. by-law(s) will continue to provide for calculation

and collection of the charges at the time of building permit issuance

• Rental housing and institutional developments would pay D.C.s in 6

equal annual payments, commencing from the date of occupancy

• Non-profit housing would pay D.C.s in 21 equal annual payments,

commencing from the date of occupancy

• Municipality’s current policy allows for deferrals for apartment buildings

with at least 3 stories

• D.C. for developments proceeding through Site Plan or Zoning By-law

Amendment will be determined based on the charges in effect on the

day of the complete application

• Charges to be frozen for a maximum period of 2 years after planning

application approval

Timing of Collection

27


• The D.C.A. allows municipalities to charge interest on installment

charges, and on charges determined at Site Plan or Zoning Bylaw

Amendment application

• In this regard, the Municipality is establishing a Municipal Interest Rate

Policy to be consistent with the approach used by the Region of

Durham and area-municipalities

Interest Charges

28


• The Act provides for some mandatory exemptions but also allows

municipalities the ability to provide it’s own exemptions

• Exemptions set out certain classes of development that will not be

required to pay D.C.s. These exemptions may be determined by:

• Use (e.g. places of worship, farm buildings)

• Geographic area

• Development type

• Service exemption

• The Act is specific in identifying that the revenue forgone may not be

made up by increasing the D.C.s for other classes of development

• In effect, it is a loss of revenue to the municipality which will have to be

funded via taxes, rates, reserves or other financial resources

D.C. Exemptions

29


• The D.C.A. provides statutory exemptions for:

• Industrial building expansions (may expand by 50% with no D.C.)

• Residential intensification:

• May add up to two apartments for a single detached home as long as

size of home doesn’t double

• Add one additional unit in medium & high density buildings

• Upper/Lower Tier Governments and School Boards

• Further statutory exemptions for second residential dwelling unit

(O.Reg. 454/19, once proclaimed)

• Exemption for the creation of a second residential dwelling unit

ancillary to existing residential buildings, and

• The creation of a second dwelling unit in prescribed classes of new

residential buildings, including structures ancillary to dwellings

Statutory D.C. Exemptions

30


Full Exemptions

• Hospitals and colleges or

universities

• Buildings used for research

purposes located in the Clarington

Science Park or the Clarington

Energy Park

• Buildings or structures used for

agricultural or agri-tourism

purposes and farm bunkhouses;

• Places of worship

• For existing industrial buildings,

enlargements of 100% or less, on

the same lot, whether or not it is

attached, excluding large industrial

• Existing commercial buildings less

than 250 square metres, located in

Revitalization areas, enlargements

of 50% or less

• The conversion of a heritage

building, located in Revitalization

areas or on the Jury lands

50% Exemption

• New industrial buildings on a

vacant lot

Non-Statutory D.C. Exemptions – Current exemptions proposed to

be maintained within the Municipal-wide D.C. By-Law

31


50% Exemptions

• Masonry-clad apartments or

mixed-use buildings, 6 or more

stories, located in the Bowmanville

West Town Centre, with a density

exceeding 100 units per hectare

• Masonry-clad multi-story mixed-

use buildings with 2 or more

stories, and a ground floor area

that is 50% or less of the total

GFA, located in Revitalization

areas

• Masonry-clad apartment or

retirement residence with 4 or

more stories, located in

revitalization areas

Non-Statutory D.C. Exemptions - Current exemptions proposed to

be discontinued within the Municipal-wide D.C. By-Law

32


• Redevelopment credits on conversions or demolitions of existing

buildings or structures are generally granted to recognize what is being

replaced on site (not specific in the Act but provided by case law)

• Redevelopment credits granted within 5-years of demolition

• Brownfield credits are available equal to the costs of assessment and

cleanup, but not to exceed the total otherwise payable, excluding gas

stations

• Expropriated land credit for a building relocated within the boundary of

the original lot

• Relocation of a heritage building refund upon re-designation on new lot

Redevelopment Credits – Current policy proposed to be

maintained

33


• D.C.A. allows for adjustment of charges to reflect underlying cost

increases and reduces municipal cash flow impact between statutory

by-law reviews

• Indexing can be:

• Mandatory – implemented annually commencing from the date the

by-law comes into force, in accordance the Statistics Canada Non-

residential Building Construction Price Index for Ottawa-Gatineau or

for Toronto, as appropriate

• Discretionary – index presented to Council annually for direction

• The current D.C. by-law provides for mandatory indexing of the charge

on January 15th of each year

• Timing of indexing to be moved to July 1st of each year to align with the

Region of Durham D.C. indexing provisions

D.C. Indexing

34

Next Steps

35

Next Steps

36

• Review feedback from stakeholders with Municipality’s D.C. Project

Steering Committee

• Release D.C. Background Study to public at least 60 days prior to by-

law passage (by April 15, 2020)

• Public Meeting of Council (May 11, 2020)

• By-law(s) Passage (June 15, 2020)

• Expiry of current by-law (June 30, 2020)

• Ongoing assessment of legislative changes, including benefits and

risks of imposing a C.B.C. under the Planning Act

municipality of clarington 2020 development charges

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