Building bump: Slumping industry can't handle cost hike: developers.

• Author: Macdonald, Darren
• Position: NEWS

More and more houses are being built outside the city limits of Greater Sudbury to avoid the city's development charges and other fees.

For example, hundreds of people commute each day from West Nipissing, where building homes is much cheaper, even factoring in added transportation costs.

"West Nipissing has issued 10 new housing permits this year, and have averaged 50 to 60 homes over the last several years," said Kristi Arnold of Dairon.

By comparison, only nine new housing permits have been issued in Sudbury in 2014, she said.

"That's down 59 per cent from last year," she said. "And (2013) wasn't a good year "

A public meeting in May focused on a plan to increase development charges by 16 per cent to $17,163 per single family home. Rates for apartments and other multi-unit buildings would go up by nine per cent to $10,098. Development charges are fees builders must pay to cover the added cost of infrastructure to accommodate new commercial, residential and industrial construction.

The charges help fund projects like the $60-million biosolids plant, the $5.7-million South End Library and the proposed $125-million Maley Drive extension. The charges soared in 2009, when the charge for building a single-family home increased from around $3,000 to more than $14,000, although the increased was phased in.

Without revenue from development charges, city staff estimates that property taxes would have to increase by around $4 million, or 2 per cent.

But presenters argued that the hike in fees is harming their industry and the city is getting less in tax revenue as a result.

"This is a big step in the wrong direction," he said. "At a time when governments are subsidizing job creation, this tax is holding development back."

Terry Del Bosco, of Tulloch Engineering, said city council may be unaware of all the "water cooler talk" in the industry about building outside of town because Sudbury is too expensive.

"A lot of my clients are moving out of the city - Sturgeon Falls, North Bay, or even Markstay," Del Bosco said. "They find it cheaper."

Ken Kalviainen from Noront Design and Drafting said he recently worked on a house being built just outside the city limits. When he went to buy a building...