toronto condos

Toronto may be raising the cost for developers to build new condos by a shocking amount

To some, the abundance of shiny new condos perpetually under construction in Toronto can certainly be infuriating, in its obvious ways.

Never-ending, disruptive work; suddenly impeded views and blocked sun; the trade-off between older, unique architecture and rich history (or, just as bad, green space) for concrete and glass towers; a general loss of the city's character to expensive cookie-cutter developments; and more.

But, as the city grows and our housing supply continues to fail to meet demand, these towers and their hundreds of thousands of new units are undeniably absolutely necessary, despite the fact that they are becoming less and less within financial reach for the average resident.

While the current average price for a shoebox in the Toronto sky is already exorbitantly high compared to most cities around the world, it may be about to get even worse thanks to a proposed increase for development charges.

Among the suggested multiple growth funding tools to help pay for new infrastructure and updates as the population expands is a hike in the development charges presented to developers building in the city be increased by a whopping 49 per cent across the board for residential projects.

This would give the city the necessary funds to build itself up to accommodate these new residents  — there are an additional 3.65 million people projected to immigrate here over the next three decades — but may obviously dissuade big companies from building homes here.

"The legislative framework provides financial tools for the city to collect funds as growth occurs on the premise that growth pays for growth," the city writes on its page on the potentially changing development change and other growth funding tools.

"This means that new developments (or redevelopments) should help pay for the municipal services and infrastructure that support residents and businesses."

Some might argue that huge developers' pockets are too thick and the business too lucrative, given current prices especially, for this to impact their decision-making all that much.

(The same was said about the vacant home tax the city is bringing in to try and crack down on ghost hotels and investors in the game for a quick and easy profit.)

Others are more concerned with the other end of the cost — the fact that if developers pay it, they will end up transferring it to buyers, driving prices even higher (something that more supply and factors like rising interest rates would hopefully assuage).

Of course, the money has to come from somewhere, and if it's not coming from developers and potentially then the sale price of a home after that, it would likely have to come from the property taxes after purchase.

It is worth noting that the jump, though a staggering one, is only a proposal at this point, though there is a lot of socio-political context to the suggestion to consider.

As one commenter states in a popular Reddit thread on the subject, "this is a case of NIMBYs passing the buck to non-homeowners."

"Many neighbourhoods in Toronto do everything they can to block new development," another adds, noting low property taxes in older areas where some residents are sitting on ridiculous wealth — and opposing new development in their backyard.

Amid the bonkers real estate market that Toronto has been experiencing for some time, there is obvious concern about any such changes from residents and housing advocates — especially in the case of much-needed affordable housing, which developers already tend to need great incentives to build.

Lead photo by

@wyliepoon


Join the conversation Load comments

Latest in Real Estate

Affordable housing specialists built this modernist $5 million Toronto home

This Toronto home is on sale for almost $1 million more than it was 3 years ago

Toronto neighbourhood set to grow so much that the city has to make a strategy to handle it

Striking rental building could be a game-changer for this Toronto street

Toronto's unattainable housing market might actually be cooling off

This $8 million Toronto home looks like it came out of a Disney movie

Here's where you can still find a home for sale in Ontario for less than $200k

New office tower proposed above one of Toronto's most prominent intersections