GUELPH LAWYERS SMITHVALERIOTE LLP
Following word last week that the city's role in an upcoming Ontario Municipal Board hearing will be greatly diminished, it seems another OMB battle could be on the horizon.
In this one, the city would find itself in the hot seat, defending its actions against a complaint brought by local residential and commercial developers.
Lawyer Robert Mullin said developers are kicking around the idea of appealing city council's implementation last week of a significant and nearly immediate increase in development charges.
"We haven't ruled that out," said Mullin when asked about an appeal, which would be heard by the municipal board.
Mullin works for the Smith Valeriote law firm, which represents both the Guelph and District Homebuilders' Association and the Guelph and Wellington Development Association.
City councillors last Monday approved an update to the development charges bylaw, which will come into affect March 2.
While development charge increases will be phased in for industrial development, councillors refused to allow commercial and residential developers the same grace period.
Residential development charges for single and semi-detached homes will increase by more than 100 per cent, from about $11,700 to more than $24,000.
"We're talking about adding almost $13,000 onto the price tag of any home built in Guelph," Mullin said, suggesting the move will have a detrimental impact on his clients' ability to sell homes.
Mullin noted council's willingness to phase in increases in industrial development charges, but not commercial or residential, "is very difficult for us to swallow."
The lawyer conceded development charges -- which have remained at current levels since 2004 -- should be increased, but was hoping the city would agree to phase them in across-the-board.
"It was the phase-in we were seeking which was the most important goal," Mullin said.
Mark Godman agrees.
"A phase-in over a couple of years would certainly be easier to digest for our industry," said the president of the Guelph Homebuilders' Association.
Godman, of Ashton Ridge Homes, noted builders are already having trouble selling homes because of the economic downturn.
"It'll definitely impact home affordability," Godman said of the boost in development charges.
"It all gets added in so it affects buyers."
Lee Piccoli, president of Fusion Homes, agreed builders might have to challenge council's decision.
"To have a price shock such as this with the way the economy is . . . it's going to impact new home sales," Piccoli said.
During the council meeting last week, Piccoli proposed a trigger mechanism to be built into the bylaw which would see development charges increase proportionately as housing starts increased.
"That's the fairest way to do it," he said in an interview.
"We're in a period of unprecedented uncertainty."
Mullin said his clients accept that development must pay for itself, but collecting money through development charges relies on there being demand for new homes.
"Zero times anything is zero," he said.
123456 by the numbers
Revised charges: industrial charges will be phased in, with a final increase of $62.33 per sq. m. commercial charges immediately up by $51.52 per sq. m. residential charges vary; a single house goes immediately up by more than $12,000 per unit.
Source: http://news.guelphmercury.com/article/434007