The big news this week for Toronto city builders is that the city has put forward a proposal to substantially increase development charges. Here's a tweet storm that I published earlier today on the topic, and here's a summary of what the new fees might look like:
To translate this into a specific example, let's assume that you're building a 300 unit apartment building with 180 one bedroom suites and 120 two bedroom suites.
Under these proposed DC rates, this would translate into charges of about $9.6mm for the one bedroom suites and $9.8mm for the two bedroom suites, totaling over $19.4mm in DCs alone. But keep in mind that there would be other charges on top of this for parkland dedication, community benefits, and a bunch of other things.
The Institute for Housing Studies at DePaul University recently published
When our cost consultant ran the numbers back in 2019, the estimate was that about a quarter of the price of a new condominium in Toronto was going to government fees and taxes. But with the above increase and with the introduction of policies like inclusionary zoning, I am sure that the number is higher today.
These are easy fees to hide. Most people don't know they exist. And a lot of people don't seem to like new development and new housing. Property taxes on the other hand are highly visible and highly sensitive. So that tax tends to be left alone, especially by comparison.
But these increases are hugely impactful. It means that developers across the city will now need to start looking at increasing rents and prices in order to try and offset it. If they can't, they won't build. And if they can, it will mean that the housing that does ultimately get built will be that much more expensive.
of the “socioeconomic factors affecting demand for housing in Chicago.”
Here is the change in population in the City of Chicago from 1950 to 2016:
And here is a comparison between Chicago and the five biggest cities in the US. Note the “sun and sprawl” phenomenon. Also note that the list below is for city proper boundaries.
One particularly interesting set of stats is the decline of children (population under the age of 18) in the city:
Since 2010, the city has lost over 40,000 children and teenagers.
But, if you break it down by neighborhood market type, it is the low-cost and moderate-cost neighborhoods that lost the population. The high-cost neighborhoods were up.
The study posits that the old trend of moving to the suburbs after you have kids may not be for everyone – provided, of course, that you have the means. And it goes beyond Chicago. DC is predicting a 25% increase in K-12 students within the District.
