As the development of this city flourishes, so do its development cost assessment charges and fees

The use of special development charges and fees in Toronto’s commercial real estate market has exploded over the past decade, with the dramatic increase in commercial use raising concerns of a potentially negative impact…

As the development of this city flourishes, so do its development cost assessment charges and fees

The use of special development charges and fees in Toronto’s commercial real estate market has exploded over the past decade, with the dramatic increase in commercial use raising concerns of a potentially negative impact on existing buildings that have been converted into condos.

Although these fees and charges are designed to encourage development of mixed-use commercial properties that are generally non-residential, Toronto’s development cost assessments, the collection of development cost charges, are far beyond the development level. For example, the Toronto Real Estate Board cites $2.6 billion in development cost charges as being waiting to be collected in reserve for use in future commercial development.

Unlike other major Canadian cities, Toronto has no obligation to use a portion of its development cost assessment to facilitate the rest of the city’s tax base. This leaves many investors and developers, as well as a host of commercial real estate owners who may be feeling the effects of the deep recession in commercial real estate, frustrated with a system that continues to throw away value they’ve paid for in advance.

It’s not the best use of the City’s resources to give that money to a corporation that can usually spend it.

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