Cutting development fees won't solve housing affordability alone
Federal housing agency says slashing municipal development charges could help but won't be enough.
Slashing municipal development charges won't be a cure-all for housing affordability across Canada, according to the Canada Mortgage and Housing Corp.
Development charges are fees cities impose on developers to pay for infrastructure that supports new builds. The federal government is spending billions encouraging municipalities to cut these fees in half to boost housing supply and improve affordability.
The CMHC analysis finds that reducing or eliminating development charges could increase viable projects in some cities by up to 14 per cent. However, cities that already have high development charges would see the biggest gains, while other municipalities would see only marginal improvements.
The agency concluded that development fees have a place in many cities' budgets and that eliminating them entirely won't restore affordability. The impact varies significantly depending on existing fee structures and local market conditions.
Edmonton residents watching housing prices should take note: local development policies matter, but they're only part of a much larger affordability puzzle.