Fees for new housing

In a recent article in La Presse entitled “Les redevances de développement ne respectaient pas loi” (Development fees may not comply with the law), André Dubuc refers to the opinion on development fees published on April 17 by the Cercle juridique of the Urban Development Institute of Quebec (UDI).

Several cities have adopted a by-law requiring a financial contribution for new housing before a building permit is issued. According to Jean-Marc Fournier, President and CEO of the UDI, “the current practice, which we have seen for several months, does not comply with the letter and spirit of the Act respecting land use planning and development.” The fee, which has been allowed since 2016, is intended to make developers pay for the cost of municipal services resulting from the city’s growing population. Under the by-laws adopted so far, the fee ranges from $4,000 to $6,000 per new housing unit, regardless of size. These amounts add to the cost of a new unit, which undermines its affordability, especially during a housing crisis, says the UDI.

Legal experts report that the growing number of municipal by-laws introducing a development fee in Quebec do not meet many of the conditions set out in the Act respecting land use planning and development, particularly those by-laws that do not establish a link between the fee and an increase in municipal services.

The situation is due to the lack of a strong legal framework in the Act that introduced the development fee, giving municipalities a great deal of leeway without any control mechanisms. There is also a risk that the by-laws will be declared invalid by the courts, in which case the contributions would have to be repaid. The UDI suggests that instead of charging a development fee, cities should make more use of taxation to increase their own revenues.

 

Click here to read André Dubuc’s article.