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3 | W aterloo C hronicle | T hursday,January 9,2020 w aterloochronicle.ca The City of Waterloo has shift- ed development charges in an at- tempt to "deincentivize" the con- struction of studio and one-bed- room apartments, with the hope more rental units for families will be built as a result. Development charges are fees imposed on development to fund growth related costs such as roads, water pipes and commu- nity centres. City staff say the city's portion is substantially less those levied by the region. At a meeting prior to the new year, Mayor Dave Jaworsky ex- plained it's a balancing act. "If you look at some of the things we've been challenged with over the prior terms of council, probably prior to my ar- riving here, certainly we were getting a lot of five-bedroom style, purpose-built student housing," he said. Jaworsky noted that the city had previously hiked develop- ment charges for units with four or more bedrooms in order to curtail larger units that were be- ing converted to condos or stu- dent pods, with locks on rooms. Rent for a five-bedroom unit was sitting well upwards of $3,000 - by no means affordable for an aver- age family, he acknowledged. But increasing development charges for larger units, thereby reducing them for units with one bedroom or less, has created somewhat of an imbalance at the other end, Jaworsky noted, with a larger number of studio and one-bedroom apartments being built in recent years. "What we've been finding, I think in the last term of council and this term of council, is really not a lot of family apartments be- ing created - two bedrooms, three bedrooms." After some discussion last fall as part of a development charge review, council opted to move to a two-tier development charge structure for apartment units, eliminating the category for one bedroom or less. The new, two-tier structure differentiates between apart- ment units with three or fewer bedrooms and those with four or more bedrooms. However the change, which took effect Dec. 31, has some de- velopers reevaluating the tenure of projects currently in the works. The previous development charge rate for units with one bedroom or less, set at $6,108, es- sentially increased more than $2,500 to $8,684 under the new structure. "The proposed increase of 42.2 per cent will have a direct and profound impact on the cost of housing for a specific subsection of the housing mar- ket that is considered more af- fordable, at a time when vacan- cy rates are at a record low and housing costs are exponentially rising," said Alicia Monteith, urban planner with Prica Glob- al enterprises, which owns nu- merous multi-residential buildings across the city. Monteith said projects such as Prica's 197-unit proposal for 203 Albert St., that's currently in the planning stages, could see costs rise by as much as $1 mil- lion, after the region increased development charges for apart- ments this past year by $2,937 per unit or 23 per cent. The com- bined impact is an additional $5,513 in development charges applicable to studio or one-bed- room apartment units in Water- loo. Still, total development charges for 203 Albert St., once estimated at under $4 million, are now closer to $5 million, Monteith said. While Monteith acknowl- edged the need for development charges to ensure that appro- priate services and infrastruc- ture are available, the feasibili- ty of the development of rental dwelling units is directly influ- enced by development charges, as those for rental accommoda- tions can't be offset by the sale of dwelling units, as with free- hold condominiums. "Projects that were otherwise deemed viable as frequently or as recently as eight months ago are either in jeopardy or are re- evaluating the form ... including the transition of rental housing to condominium units due to fi- nancial considerations," Mon- teirth said. Monteith also noted the prov- ince's proposed More Homes, More Choice Act is proposing significant changes to the Devel- opment Charges Act, as well as the establishment of a "commu- nity benefits charge", which could accommodate a portion of current fees. However Coun. Jeff Henry, chair of the city's finance com- mittee, said the city needs more two- and three-bedroom units in new apartment buildings. "I know from listening to this council table and the previous council table that there's been an increased interest on the plan- ning objectives side around fam- ily sized units being incorporat- ed into apartment buildings," he said. "And one of the levers that the city has is how we categorize development charges and how many buckets we slice these things in to..." Henry said he wasn't so sure if the move provides as much of a disincentive for developers to create one bedroom units as it does "reduce the disincentive" for family units in developer portfolios. CITY SHIFTS DEVELOPMENT CHARGES TO ENCOURAGE FAMILY APARTMENTS BILL JACKSON bjackson@kitchenerpost.ca Part of the master plan for this phased, six tower development proposed for the Erb Street West and Westmount Road area is accommodation for family apartments. The city wants to provide more incentive to developers to increase the number of family rental apartments in Waterloo. Killam Apartment REIT STORY BEHIND THE STORY Waterloo council opted to change its structure for development charges at a December meeting, resulting in increased fees for some developers who are still in the planning stages. YOUR CITY Visit waterloochronicle.ca for more coverage