Homebuilders issue warning about proposed $12,000 hike in Ottawa development charges

The Greater Ottawa Home Builders Association warns a $12,000 increase in development charges on new homes will create an unexpected cost for homebuyers planning to buy a new home in Ottawa this year.

The Greater Ottawa Home Builders Association warns a $12,000 increase in development charges on new homes will create an unexpected cost for homebuyers planning to buy a new home in Ottawa this year.

The planning and housing committee will vote Wednesday on a new development charge bylaw. Development charges are one-time fees levied on new residential and non-residential properties to help pay for growth-related capital infrastructure, including roads, water pipes, transit, emergency services and parks.

Under the proposal, development charges will increase on new single and semi-detached homes within the Greenbelt from $43,494 to $55,678, while charges on new homes outside of the Greenbelt will increase from $51,376 to $63,337.

"The biggest concern here is it's an extremely high level of jump, in terms of the cost," Jason Burggraaf, executive director of the Greater Ottawa Home Builders Association, told Newstalk 580 CFRA's The Morning Rush with Bill Carroll.

Burggraaf says people expecting construction to begin on their new home in June or July will face a new cost pressure immediately.

"Those people who are going to be looking at their homes being built in June of this year, are going to be looking at an increased rate and an increased cost in their home," Burggraaf said.

"They bought that home months ago, with the understanding that their home was going to cost $40,000 in DCs and now that presumably is going to go up to $55,000 in DCs.  They're going to be on the hook for that increased costs if they want to get their house built."