-by Hub Staff

Mayor Ian Boddy cast the tie-breaking vote to table Councillor O'Leary's motion to extend development fee holiday for another two years, in response to correspondence from developers. Two years ago Owen Sound City Council passed a by-law reducing these charges to zero until March 1, 2017, and re-introducing the fees in increasing increments for the following three years. Deputy Mayor Wright asked why the moratorium had not resulted in more seniors' housing, and Councillor McManaman requested a staff report on any information which might be reason for changing their 2015 decision.

Full text of letter to Owen Sound City Council by Barry Kruisselbrink

In 2015, after considerable thought, the City of Owen Sound passed By-law 2015-080 to establish Development Charges. The By-law sets out the rates to be collected over a five year period for various types of building permits.

While contemplating this By-law, Council and Staff included policy to recognize several concerns that the City's tax base was not expanding and new growth was not at levels consistent with other competing municipalities. Section 10.3 was added to the By-law to
"encourage residential development within the City". This innovative policy essentially allowed for a two year holiday for Development Charge Fees. As noted in the By-law, this exemption is set to end March 1, 2017.
Unfortunately, many of these same concerns are still reality. Growth, specifically new home construction, remains a hindrance for the construction industry. Over the past 2 years our firm has taken out 23 building permits for new single detached homes in Owen Sound. We would like this number to be higher but the current absorption rates do notallow for additional construction. It should also be noted that new subdivisions will also be delayed due to the current rate of new home construction.
We feel that given the current conditions in Owen Sound, adding more costs to pay for growth related infrastructure is not warranted
as there is simply very limited growth. Let the industry evolve and move towards a level that will benefit all parties. To put this into context, it will take nearly 10 years just to collect enough development charges to simply pay for the consultants studies detailed within the background study. Additionally, it will take around 150 years to collect sufficient funds to cover the over 17 million dollars in costs to be recovered from development charges for various city endeavors. It will also take over a year to pay for completing the Development Charge reports.
Keeping Owen Sound competitive is also an important aspect and cannot be disregarded. An adjacent Municipality has elected not to
implement development charges and also offers lower taxes once the home is built. It is difficult to attract new residents when costs are considerably higher before and after construction.
A legitimate concern in Owen Sound is jobs and ensuring there are sufficient employment opportunities in Owen Sound to attract people and keep them in the city. The residential construction sector is an important industry in Owen Sound. Barry's Construction directly works with over 500 individuals and purchases products from many local merchants. The point here is not to boast, but to make sure everyone understands how vital this industry is in Owen Sound. Barry's Construction is similar to other non –residential industries and provides many of the same positive spin-offs to the local economy.
As likely the largest tax payer in Owen Sound, with significant commercial and residential investments, it is crucial for our interests that taxes begin to be offset by growth and not just raised annually to make up for increases in wages and benefits. And to be very clear, with the current rate of development, the development charges collected will do next to nothing with respect to moving ahead the projects listed in the study. Encouragement for growth is needed, not higher fees.

Barry's Construction will continue to work and invest in Owen Sound and we appreciate the cooperation we have received from Council and Staff. It is obvious that our goals are not exclusive and it would be mutually beneficial to realize increased growth within the city. We would like to be part of the solution as a community partner.
As it appears many of the factors that originally prompted the new development charges policy remain the same, our feeling is that it
is not the time to increase home costs, and that continued encouragement may be the best approach. This type of policy incentive is
effective and will continue to demonstrate the city's efforts to stimulate growth.

Respectfully submitted,

Barry's Construction and Insulation