CMHC: Development charges raises home costs up to 16%

Key Takeaways:

• Development charges add a meaningful cost to new homes, accounting for 8–16% of a new condo’s price and up to 9% of a single-detached home in Toronto, according to CMHC data.
• Charges vary widely across municipalities, creating inconsistent standards nationwide and introducing planning uncertainty for builders and developers.
• CMHC’s new dataset aims to improve transparency and policymaking, helping governments better evaluate how infrastructure is funded and how development charges impact housing supply and affordability.

The Whole Story:

New research from Canada Mortgage and Housing Corporation shows that development charges represent a significant portion of housing costs across Canadian municipalities, with charges accounting for 8–16% of the price of a new condo and up to 9% of a single-detached home in Toronto.

The data, released as part of CMHC’s Modernizing Housing Data Initiative, covers 30 municipalities and highlights wide variations in what is charged to homebuilders. The corporation said the findings underscore inconsistent standards in how charges are applied across jurisdictions.

“Understanding development charges is key to understanding housing supply and affordability across Canada. They shape both the cost of housing and the pace at which communities can grow, while being an important funding source for a broad range of municipal infrastructure,” said Mathieu Laberge, CMHC’s Chief Economist. “With this new data on municipal development charges and fees, CMHC aims to close data gaps and help inform decision-makers. However, inconsistent standards for how these charges are applied remain a challenge.”

For builders and developers, the research carries direct implications. Development charges fund municipal infrastructure—roads, water systems, schools and transit—but their variability across regions creates planning uncertainty and affects project economics. The CMHC data is intended to provide transparency and help policymakers evaluate alternative funding mechanisms for infrastructure.

The Modernizing Housing Data Initiative, created to close data gaps and develop more timely and granular housing data, represents CMHC’s effort to support evidence-based decision-making on housing supply and affordability. The development charges dataset is the first product of this initiative.