Developers and Development Charges

City council made a bad decision this week…well, they made three bad decisions, but I’m only going to focus on one. Last year, the city increased development charges (DCs). This was a fine move. New builds are taxing on our city services and our city finances. New development isn’t inherently bad, but it is costly, and shouldn’t be subsidized by the rest of us.

Well, nothing is permanent, it seems. Homebuilder associations threatened to take the city to the Ontario Municipal Baord, so the city caved, slashing the increases and promising to never ever do anything to make these perfect, sainted, benevolent developers even slightly inconvenienced ever again (essentially).

I’m not going to get deep into it right now…mainly because Rideau-Rockliffe councillor Tobi Nussbaum’s statement is pretty perfect. (And I’m stealing it in its entirety and I hope Team Tobi doesn’t mind.)

At City Council today, I voted against a settlement agreement to resolve an appeal to the City’s updated development charges bylaw. Ottawa updated its development charges in 2014 and the Greater Ottawa Home Builders’ Association (GOHBA) and other developers subsequently appealed the decision at the Ontario Municipal Board.

The Province of Ontario requires municipalities to review and update their development charges every five years. The City collects development charges from homebuilders to pay for the increased capital costs of services such as new roads, water and sewer pipes and transit to accommodate residential growth. As a result of the settlement, the City will have to reimburse $7.4 million in collected development charges to builders and can expect to forego tens of millions of dollars in future revenue.

I voted against this proposed settlement agreement for two main reasons:

ACCOUNTABILITY

The settlement agreement goes far beyond the 2014 changes to the development charges. It includes a clause that would prohibit Council from introducing any new projects to its development charge system prior to January 1, 2019, unless the appellants agree. By approving this settlement, the City is giving the appellants a veto power over what City Council can do in relation to development charges for more than three years, eliminating the opportunity to include new projects as part of the next development charges review, expected in 2017. To use a concrete example, although Council had the right to impose a development charge to help offset capital costs for childcare, Council will be forbidden to do so by this settlement agreement unless the appealing developers agree.

TRANSPARENCY

The 2014 Development Charges By-law amendment was the subject of considerable consultation, both with the industry and with the broader public. City staff recommended approval of it to Council in June 2014 without any suggestion of legal risk. Given that city staff is now recommending drastic alterations to the recently adopted development charges, either Council was not properly informed of any legal risks at the time the changes were passed, or the city should not agree to settle and instead proceed to a hearing at the Ontario Municipal Board on the basis of the rigorous research, transparency and consultation that underlined the 2014 review.  Either possibility raises significant process issues.

For a public regulator to grant veto power over its future decisions to the very bodies it regulates raises serious concerns. Considering that the settlement agreement was passed at the same meeting that Council considered directions for its 2016 budget, which includes a $36 million-gap that needs to be filled, such a voluntary ceding of Council authority is both legally and financially problematic.

The city is obligated to demonstrate the highest level of openness and transparency, particularly when dealing with the development industry. A settlement agreement, negotiated and debated behind closed doors, that alters a publicly-consulted set of rules and provides veto power to developers over City decisions, does not meet that test. The result of that failure is a loss of public trust.

Nussbaum and Somerset councillor Catherine McKenney were the only two to vote against this horrendous motion. Good for them.

I get council’s desire to settle. The OMB is a monster, and has consistently sided with developers and against democracy. The provincial government is severely hurting the city by giving the OMB such expansive powers. It seems not a significant debate about urban development goes by that someone doesn’t express concern that the OMB will punish the city for a decision we might (and, usually, should) make.

But that doesn’t mean we turn over the keys to government to developers. It already seems like city council is in the pocket of corporations. Now, we’re just that much closer to codifying it.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s