Toronto City Council has approved an increase to development charges that will be phased in over a two-year period in an attempt to manage the impact on community development.
Charges for residential and non-residential buildings have been increased. Half of the increase amount will be implemented on May 1, 2023, with the full rates coming into effect one year later.
Despite these aggressive increases in development charges spurred by a change in provincial law that requires municipalities to review their current fee structure, it is encouraging for missing middle housing supply that an amendment was approved that provides exemptions for multiplexes with four or fewer units. What this means is that development charges would be waived on second, third, and fourth units on a single lot.
The following scenarios are provided for further clarification on the new exemption:
- Should a homeowner decide to add a second, third or fourth unit to an existing dwelling, they are exempt from paying development charges on the second, third and fourth units;
- Should a homeowner demolish an existing single unit home and build up to four new units on that same lot, the rebuilt first unit would not be subject to development charges, and neither will be the second, third or fourth unit;
- Should a homeowner decide to build a new fourplex on a lot which did not formerly have any residential units, the first unit would be subject to development charges, but the second, third and fourth units will be exempt from those charges.
More information on how development charges apply to redevelopment and demolitions can be found in section 415-7 C) 1. a) on page 13 of the new development charge by-law.
This exemption was brought forward as a way to encourage more missing middle housing, something that TRREB has been strongly advocating for, and working closely with elected municipal officials and City staff for many years.
Source: Toronto Regional Real Estate Board.