Richmond Hill Council Discusses Development Charges Reduction Program Application

Richmond Hill council discussed whether to apply, before a June 19 deadline, to a provincial-federal Development Charges Reduction Program tied to housing-enabling infrastructure funding. Staff recommended submitting an application for two projects — the Vogal Road Bridge and an operations centre expansion — while bringing any final agreement back to council for approval in August.

Topics Discussed

1. Development Charges Reduction Program application

Council considered staff recommendations on the Development Charges Reduction Program application (File: SRCM26.12). Staff said participating municipalities must reduce residential development charges by 30 to 50 per cent for three years. For Richmond Hill, staff modelled a 50 per cent reduction in citywide residential development charges and a 100 per cent reduction in area-specific residential development charges in the Hefford area.

Director of Financial Services Gigi Lee said, "The city has a limited window to determine whether to participate in the provincial federal DCP, which is the development charges reduction program."

2. Proposed projects and funding structure

The application was based on two projects with a combined cost of about $47 million: the Vogal Road Bridge and an operations centre expansion. Staff said senior governments could fund up to 90 per cent of eligible costs, with the city covering at least 10 per cent plus any ineligible costs or overruns.

Councillor Karen Cilevitz asked about timing, saying, "The transfer payment agreement has to be signed by August 21st. Is that correct?"

3. Financial impact and municipal exposure

Staff said the estimated three-year revenue impact from a 50 per cent reduction in residential development charges is about $44 million. Councillors focused on whether the city's exposure was larger than the net figure presented by staff.

Councillor Carol Davidson said, "So how I I'm so confused by the 6.4 number. It's actually 44 million we're not going to get plus the 4.7 we're short because the funding would never be 100%. So that's to me closer to 50 million that we're in the whole not 6 million."

Davidson also warned that the cost could ultimately fall on residents, saying, "In my mind, we can potentially think that we're going to have to go back to taxpayers for anywhere between 7 and 12% tax increase. That's where the rubber hits the road because now we may be pricing existing residents right out of the neighborhood."

Staff said the estimated three-year revenue impact from a 50 per cent reduction in residential DCs is approximately $44 million.

4. Risks: clawbacks, uncertain uptake and housing outcomes

Council discussed the risk that projected housing units may not materialize, which could trigger a clawback of funding. Gigi Lee said, "The projected housing units may not materialize because as we all know we don't build the units. So it creates a potential scenario where the province will claw back the funding."

Councillors also raised the possibility that developers could rush to take advantage of lower charges before 2027. Davidson said, "So potentially we could get a deluge of people wanting 50% off because if not between now and 2027, why not?"

Mayor David West argued the program should at least be pursued because it is intended to support housing construction. He said, "The program is designed to accelerate housing and in a time where we're it's very bleak out there when it comes to meeting our housing targets and building housing for people to live in."

5. Deadline pressure and council direction

Council repeatedly returned to the June 19 application deadline and whether applying would preserve flexibility while leaving the final decision for August. Joe DiPaola said, "I think we'd be highly criticized if we didn't ... at least try and put projects forward that could potentially benefit from this funding."

Cilevitz said, "I truly do believe that ... we would be putting Richmond Hill at a competitive disadvantage if we did not at least apply for this."

Mayor West said the city had made clear it would prefer full funding, adding, "If the government gave us 100% of the funding for us to drop our DCs by 50%. I would have done this the day before yesterday."

Motions

• Development Charges Reduction Program Application (File: SRCM26.12) — Passed: Council agreed to submit the application, with any final agreement to return to council for approval.
• Staff recommendations A and B related to the funding application — Passed.

Attendees

Councillors identified in the discussion: - Michael Shiu - Simon Cui - Godwin Chan - Karen Cilevitz - David West - Scott Thompson - Castro Liu - Carol Davidson - Joe DiPaola

Staff identified in the discussion: - Gigi Lee, Director of Financial Services