The Ontario Real Estate Association (OREA) is urging all levels of government to reform development charges, saying the fees are contributing to higher home prices and limiting new housing supply.
In its new 60-page report, A Pathway to Development Charge Reform, OREA calls for changes to the current system without shifting the financial burden onto property taxes. Development charges were originally intended to fund infrastructure tied to growth, but the report argues they are now adding significant costs to new housing, affecting affordability across the province.
Rising costs and public concern
According to OREA, development charges have become one of the largest expenses in residential construction. The report highlights concerns around both affordability and how the fees are managed.
Recent polling released by OREA suggests Ontarians generally support the concept of development charges, but many question their impact. Two in five respondents (42 per cent) said it is unfair to pass these costs onto homebuyers, while 71 per cent believe they make housing less affordable.
Transparency also remains an issue. Only 22 per cent of respondents said municipalities clearly communicate how development charge revenues are used.
Proposed solutions
OREA’s report outlines seven recommendations aimed at balancing housing affordability with infrastructure funding.
Among the proposals is a two-year suspension of development charges to provide short-term relief and support construction activity. It also suggests alternative financing approaches, such as municipal service corporations and utility districts, to help reduce infrastructure costs.
Another recommendation is a direct-to-buyer billing model that would remove additional taxes applied to development charges.
“With today’s economic uncertainties and rising cost of living, homebuyers need some relief when making the biggest financial transaction of their lives,” said OREA president Kim Fairley.
Fairley said the province needs a development charge framework that supports both existing communities and future growth.
She also noted that while infrastructure funding is necessary, governments need to work together to address the factors contributing to rising development charges.
