Development Charges and Politicized Transit Planning (Updated)

Updated November 26, 2015 at 11:00 pm: A follow up article by Jennifer Pagliaro includes reactions from Mayor Tory. My comments appear at the end of this article.

The Toronto Star’s Jennifer Pagliaro reports that the Building Industry and Land Development Association (BILD) will challenge Toronto’s planned increase in Development Charges for the Scarborough Subway Extension (SSE) at the Ontario Municipal Board (OMB).

[BILD is] challenging the planning foundation for the three-stop subway — which council controversially approved last term over a seven-stop LRT that was fully funded by the province. BILD is raising red flags about the city’s ridership projections.

Bryan Tuckey, BILD’s president and CEO, says homeowners across the city should not be on the hook for a “political decision.”

“The ridership numbers that we have demonstrate that what’s needed in that area is light rapid transit,” Tuckey, whose background is in city and provincial planning, told the Star.

“We want to have fair and accountable use of development charges.”

This action has implications well beyond the Development Charges (DCs) for the Scarborough Subway and touches on the whole question of transit financing and planning that for years has been more about political gamesmanship than about the actual needs of the City of Toronto.

We know that the development industry does not like paying one cent more than they have to, and preferably less, in taxes. In that sense they are no different than other taxpayers.

However, while homeowners can only express their opposition by voting for politicians with vague promises to fight waste at City Hall, and hope that their “champions” like Ford and Tory will “do right” by them, their only real recourse is at election time. Elections are fought on signature platforms like SmartTrack and “Subways Subways Subways”, and voters don’t get to cherry pick the platform lines they really want. Elected politicians claim they have “a mandate” when their victory may simply depend on “not being the other guy”.

Development Charges, on the other hand, have specific rules about how they are calculated and an appeal mechanism neither of which is available for general property taxes (or many other taxes Council can or could levy of which the Land Transfer Tax is one obvious example). As the Star notes, most of the City’s share of the SSE ($910m) will come from the subway property tax yielding $745m. This tax will rise to 1.6% in 2016 and then stay on tax bills for decades. The amount coming from DCs ($165m) is much smaller, but developers have an appeal option through the OMB.

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