Cobourg decreases development charges in bid to increase new housing builds

By Dan Jones LJI
Northumberland 89.7 FM

The Town of Cobourg moved quickly to be eligible for a federal-provincial program aimed at incentivizing developers to build new homes at a special council meeting on June 16.

The Town has until June 19 to apply for its intent to participate in the $8.8 billion Canada-Ontario Partnership to Build with federal funding delivered through the Build Communities Strong Fund’s Provincial and Territorial stream.

Participating municipalities must reduce development charges by 30 to 50 percent. Currently, Cobourg levies an approximate $35,000 development charge on each new home constructed. The developer usually passes the fee on to the home purchaser as it is amortized into their mortgage. For rental units, it is paid by the tenants. The municipality would be reimbursed by the program dollar-for-dollar for approved projects.

Director of Development Chris Challenger presented to Council at a special meeting on Tuesday, explaining the funding envelope is open not only to housing but also to water, wastewater, transportation, and stormwater infrastructure, and that the program’s focus is on increasing building permits.

“This program is really tied to building permits being issued, not necessarily planning approval. It’s very focused on the end result, which is building permits going out the door to developers,” Challenger said.

The provincial government is seeking to build 1.5 million homes by 2031 and is looking to municipalities to construct a mix of housing options that are considered shovel-ready. The Town has identified five areas which could see increased housing development.

Figures provided to Council suggest that housing development has stagnated since the COVID housing spike. Development charges collected: 2022-$1.858 million, 2023- $7.461 million, 2024-$647,000, 2025-$670,000. Councillors were given a breakdown of their development charges reduced by 30 percent, 50 percent, and 100 percent, unlocking potentially up to $50 million over a three-year period.

Proposed projects are expected to be construction-ready by 2030 and completed by 2035, giving municipalities time to advance priority projects and coordinate with builders.

Challenger said Cobourg should develop cohesive funding proposals. Three area developers spoke to council, all in favour of reducing development charges, suggesting this would be great for new housing starts as it targets affordability.

The federal and provincial governments have also temporarily suspended the HST on new homes for one year, providing additional savings. All municipalities are under tight deadlines to either opt in or out of the program, given municipal elections are in late October, and Councils will enter their lame-duck phase by August 21, when the election period officially begins.

Much debate among Councillors ensued as Miriam Mutton said it will be the provincial and federal taxpayers who will foot the bill to offset the development charges. Council voted 6-1 in favour, with Mutton casting the nay vote.