Planning and development fees in Halifax haven't increased in several years, and that's a problem.
A report headed to Regional Council on Tuesday afternoon recommends the municipality move forward with the second phase of a fee review and develop a standardized policy for its planning and development fees.
Those fees haven’t been updated in several years, and there’s currently no process in place to regularly review them to keep up with inflation. So while the operational cost of the city’s planning department has increased over the years, the fees paid by builders and developers have stayed stagnant.
That means HRM has had to increasingly rely on property taxes to foot the bill for processing development applications.
“Planning and Development fees are currently not recovering even the direct costs to provide the service,” reads a consultant report from BMA Management.
Development fees currently range from $330 per unit for intermediate and minor planning applications, up to $1,100 per unit for major applications (with a refundable $1,500 advertising deposit). That’s substantially lower than most comparable municipalities across Canada.
In 2015, only 47 percent of the cost of service—or $3.3 million in program costs—were recouped from the development fees. Other cities, such as Calgary, Edmonton, Winnipeg and Ottawa, operate on a full-cost recovery system to process the same applications.
BMA found at least 10 different HRM staffers and up to 220 hours can be spent on a single moderately-complex planning application, which works out to only $1.50 to $4.55 per hour (depending on the fee) recovered in operational costs.
Some of the current problems with HRM's system include: using four categories for subdivision applications instead of a base fee plus per unit cost like other municipalities; the same fee for different types of applications requiring substantially different amounts of work; only one Site Plan fee for all of downtown Halifax regardless of the size of the renovations; and needlessly complex fees for simple items like a homeowner who wants to build a deck.
Low fees can also drive speculation, writes BMA, in turn wasting staff time, contributing to higher property tax subsidization and slowing the local real estate market.
Last year, HRM processed 641 major and 2,951 minor development applications. Those files were competed on time 69 percent of the time and 37 percent of the time, respectively.
If approved today, staff will return to council with a new fee policy offering a consistent framework for establishing revised fees.