Dire financial consequences as legislation restricts ability to collect development charges, increases infrastructure needs and changes definition of ‘affordable housing’
January 15, 2023 – Brampton City Council has expressed concern over the economic impact of the recently passed Bill 23, also known as the More Homes Built Faster Act.
A staff report presented to the council in November 2022 estimated that the city’s revenue losses as a result of the bill will be equivalent to an 80% property tax increase over the next 10 years. The bill makes several changes to the Development Charges Act and the Planning Act, which the government hopes will speed up the construction of new homes to address a housing shortage.
However, the bill also restricts municipalities’ ability to collect development charges on new types of housing and development projects, which are used to fund services and infrastructure.
Additionally, the bill makes it more difficult for municipalities to deny development proposals and changes the definition of “affordable housing” from being based on income to market value. Staff estimates that these changes will require an additional 40% tax increase to meet the increased demand for infrastructure.
Moreover, the bill removes development charges from affordable housing, which could cost the city an additional $260 million to $800 million, equivalent to a five to 16 percent tax increase. The bill also sets a target of 113,000 new homes and rental units by 2031 for Brampton, which staff estimates would require $2 billion in new infrastructure to accommodate, above the $200 million the city was previously forecasting for expected growth over that time.
Thus, staff is estimating an additional 40% tax increase would be required to meet that demand. Furthermore, Bill 23 also makes land acquisitions and growth-related studies ineligible to be funded by development charges, which would cost taxpayers almost $9 million to fund growth-related studies and up to $210 million for land acquisition costs over the next 10 years.
In summary, the City of Brampton is concerned that the recently passed Bill 23, or the More Homes Built Faster Act, will have a significant economic impact on the city, resulting in a large property tax increase over the next 10 years.
The bill includes changes to the Development Charges Act and Planning Act that the government hopes will speed up the construction of new homes, but it also restricts municipalities’ ability to collect development charges, making it harder for municipalities to deny development proposals, and changes the definition of “affordable housing”.
The bill also sets a target of 113,000 new homes and rental units by 2031, which would require $2 billion in new infrastructure to accommodate. The city estimates that all of these changes would require an 80% property tax increase over the next 10 years to absorb the financial hit.