Waterloo Region - New home construction in the Region of Waterloo creates and supports thousands of jobs each year. These jobs are distributed across the economy. Although the bulk of the job creation is in the Construction Sector, there are also many jobs created and supported in Manufacturing, Trade & Transportation, Service and Government.

The current proposed Regional Development Charge increase of 89% will not only be detrimental to housing affordability in the Region, it will also most certainly lead to substantial job losses locally. This comes at a time when our fragile economy can least afford to sustain additional negative stimuli.

A recent report prepared by CMHC indicates that Government-imposed charges add 20-30% to the cost of new housing in Canada. This study did not take into account the proposed increases by the Region.

The CMHC recently announced a plan to assist municipalities with infrastructure loans for housing-related infrastructure projects. These low-cost loans are available immediately and should be used by the Region to undertake critical infrastructure projects that are needed for growth and that will provide job creation to the local economy.

WRHBA feels the time is right for the Region to consider alternatives to Development Charges for the following reasons:

1. New and upgraded infrastructure benefits the entire Region and delivers those benefits to the entire community over many years and not just new home buyers who are currently paying most of these costs up front.

2. The Region can finance the construction of infrastructure through debt instruments that match debt payments with revenues generated from this infrastructure. On the other hand, getting new home buyers to finance the construction of new infrastructure that becomes part of the public capital stock, through their own personal mortgage is neither efficient nor fair.

3. The increasing percentage of Government-imposed charges on new home buyers distorts real estate markets by placing upward pressure on housing prices at a pace that can ultimately create instability in the housing market, as has occurred in other real estate markets around the world.

4. The increasing reliance by the Region on cyclical revenue source such as Development Charges creates a “revenue trap”. At a time when expenditures on infrastructure should be increasing, the Region has experienced a substantial decline in DC revenue as the slowdown in new housing construction has accelerated.

WRHBA feels that since the residential construction sector plays such an important role in the health of the local economy, this is the ideal time for the Region to take a leadership role in re-evaluating their approach to financing basic infrastructure.

Since reliance on development charges undermines the very economic growth that the Region depends on by creating barriers to job creation, the Region should consider the following alternatives:

1. Making more effective use of the property tax base.

2. Accessing appropriate debt instruments and financing infrastructure over its lifespan so that everybody who benefits pays their fair share.

3. Establishing fair and realistic user fees.

WRHBA has been the voice of the residential construction industry since 1946. WRHBA is the tenth largest home building association in Canada and the fourth largest association in Ontario. For more information about WRHBA and its members, please visit our website at www.wrhba.com.