Hamilton's Residential Construction Industry Seeks Relief Amid Market Downturn

Strategic Insights -

Hamilton's residential construction industry is bracing itself for a severe market downturn, with the West End Home Builders' Association warning that projects across the city and region are on pause due to extreme difficulty in launching and selling units. The association is urging the city to temporarily cut development charges in half to help weather the storm, but city officials point out that offering breaks on the fees would mean the forgone revenue must be realized elsewhere, likely shifting the burden onto taxpayers.

Key Takeaways:

  • The West End Home Builders' Association is seeking a temporary 50% cut in development charges to help the industry weather the market downturn.
  • The association warns that without such relief, along with support from the provincial and federal governments, the prospects for the industry are grim.
  • The city is examining a range of measures to offer relief to developers, including deferring the collection of development charges and exempting two- and three-bedroom units from the fees.
  • The proposed bylaw changes have been open for public consultation, with feedback sought from the industry and the wider public.
  • Staff are also examining how the province's Bill 17, the Protect Ontario by Building Faster and Smarter Act, could supersede the city's potential moves on development charges.

Statistics:

  • Last year, Hamilton had 1,481 housing starts, down from 3,347 starts in 2023.
  • The city collects around $500 million in development-charge reserve funds, which cannot be raided to compensate for breaks on certain development charges.
  • The proposed 50% cut in development charges in Mississauga and Vaughan does not factor in those municipalities' regional fees.
  • The city's existing rates are competitive, according to general manager of finance and corporate services Mike Zegarac.

Sources:

  • The Hamilton Spectator article "Residential construction industry seeks relief from city”
  • Letter to the city officials from the Durand Neighbourhood Association, dated [no date mentioned]
  • The Protect Ontario by Building Faster and Smarter Act, Bill 17, [no date mentioned]