Cornwall new home prices would jump 2.1% with development charges: study

(Newswatch Group/Bill Kingston, File)

CORNWALL – If the city puts development charges in place, home buyers would feel the pinch with an average 2.1 per cent increase in the price of new homes.

So says a city-commissioned study to be presented to council Tuesday night.

On a $250,000 home, that would lead to a new homeowner paying an extra $25 per month ($300 a year) on their mortgage.

Andrew Grunda from Watson and Associates Economists Ltd. will make a presentation following feedback from a public open house last month, suggesting the city have a five year phase-in for the development charge program.

The study anticipates 144 dwelling units will be built each year over the next 10 years, slightly more than the historical average of 120.

If it doesn’t put the charges in place, the consultant estimates the city would miss collecting $1.6 million to $1.7 million between 2017 and 2022 – money it would have to make up from existing taxpayers.

The development charge regime sees developers pay an up-front cost to build – money dedicated to city infrastructure improvements and maintenance. In most cases, that cost is passed down to the consumer in the form of higher prices for homes.

For building a new single family home, the fees would be $4,800 to $5,100 depending on whether the build is hooked into water and sewer (rural versus urban charge).

Just down the road in Eastern Ontario, development charges have been called into question in Brockville. Some developers there claim the charges have negatively affected the number of new builds. In 2009, the city even instituted a five year development charge holiday to encourage development.

After the Tuesday night presentation, the City of Cornwall still has to put the document out for public feedback and another public meeting needs to take place before any law is passed.

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