Glen
Senior Member
Bingo!
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Filling Toronto's Fiscal Hole In One Shot
- Thread starter Glen
- Start date
Bingo!
js97
Senior Member
How would that fix the problem?
Housing Units are already pretty much unaffordable for your average working citizen.
The land transfer tax (exact same concept) was touted to fix our problems, but it only brought a fraction of revenue of what was expected/
If anything, it would do more harm than good by reducing development as profit margins shrink because at the higher price points, you shrink your potential purchasers.
And it's also not a direct 'tact-on' value. When you triple the initial investment/financing costs for development, the end result is exponential of that amount.
Example:
Originally, 10 dollars needed to finance a 100 dollar development (1 dollar development cost)
As you complete different phases of the building process, you receive more money to finance through downpayments, financing etc.
All of a sudden, you'lll need 12 dollars to complete a 100 dollar development. And this is mostly front end loading.
It's an increase of 20% for the initial investment. How do you think that will affect people willing to take risks?
And the end result? Less unionized jobs as less development will occur. Only the rich that can afford to be taxed and those living in the subsidized housing. I've said it once and can say it again. Look at NYC. But maybe that's what people are looking for?
Housing Units are already pretty much unaffordable for your average working citizen.
The land transfer tax (exact same concept) was touted to fix our problems, but it only brought a fraction of revenue of what was expected/
If anything, it would do more harm than good by reducing development as profit margins shrink because at the higher price points, you shrink your potential purchasers.
And it's also not a direct 'tact-on' value. When you triple the initial investment/financing costs for development, the end result is exponential of that amount.
Example:
Originally, 10 dollars needed to finance a 100 dollar development (1 dollar development cost)
As you complete different phases of the building process, you receive more money to finance through downpayments, financing etc.
All of a sudden, you'lll need 12 dollars to complete a 100 dollar development. And this is mostly front end loading.
It's an increase of 20% for the initial investment. How do you think that will affect people willing to take risks?
And the end result? Less unionized jobs as less development will occur. Only the rich that can afford to be taxed and those living in the subsidized housing. I've said it once and can say it again. Look at NYC. But maybe that's what people are looking for?
TOareaFan
Superstar
That is my point....they can't just be raised that high. The OP simply took current unit sales and arbitrarily increased the DC and created a phantom source of income. If, either, the purchasers or developers were asked to pay that much more per unit then it would affect (I would suggest dramatically) the number of units sold/started so the revenue source would go away.
If the developers had to bare the brunt of the increase they would simply look to develop in areas (ie outside of toronto) where the margins where higher......if it was unit purchasers who were expected to pay they would factor in that additional cost and more of them (not necessarily all of them) would end up buying elsewhere.
maestro
Senior Member
Typical Glen post. Toronto builds very little single family dwelling units. Certainly, not anywhere near the 10,000 a year you suggest. Most of it multi-family. Also, many fees are calculated by the square footage and the typical 416 dwelling is significantly smaller than the 905 dwelling
Glen
Senior Member
Wrong. Every condo built is a single family dwelling. Typical maestro post, clueless.
GraphicMatt
Looking forward to a FRESH START for Toronto
Look, I don't think this is a magic bullet or anything, but if Toronto can raise development fees on residential projects without negatively impacting forward growth - and I suspect they can - then why NOT do it? If it kills some of the rampant speculation in the TO condo market than that's an extra benefit.
Observer Walt
Senior Member
In Toronto and most other municipalities, charges for dwelling units are not based on square footage. They are however based on type of dwelling (single house, one-bedroom apt., two-bedroom apt., etc.) Charges for commercial development (as opposed to residential) are based on the square foot or square metre floor area.
SimonP
Active Member
No, "single family dwelling" refers to a standalone house in common English parlance. http://en.wikipedia.org/wiki/Single_family_dwelling agrees with this.
Observer Walt
Senior Member
It wouldl "kill" or at least reduce the sales of ALL development, not just "speculative" development, even if you could somehow identify those which are "speculative". Anything that drives up the price of housing reduces affordability, which is already becoming a serious issue in Toronto.
Observer Walt
Senior Member
No offense Simon, but don't rely on wiki. Rely on the development charges bylaw. All dwelling units are subject to the development charges bylaw, including detached houses, semi-detached houses, condo apts.,, multiple unit buildings, etc....
SimonP
Active Member
All dwellings are subject to the charge, but different amounts are charged for different housing types. See http://www.toronto.ca/finance/dev_charges.htm . A single detached dwelling pays much more than a condo or apartment. Every city does it this way (Markham's table, for example) Part of the reason why Toronto collects much less than other cities in development fees is the different types of housing stocks being built here.
PS. I do perhaps think too highly of Wikipedia, but I do have a bit of a bias that way
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