Vaughan mayor slashes development charges up to 92%

Key Takeaways:

• The City of Vaughan has approved massive cuts to its development charges for residential developments, which historically were among the highest in the Greater Toronto Area (GTA).
• Overall reductions range from 88% to 92% across various residential types, translating into substantial cost savings for developers and potentially for homebuyers.
• Mayor Steven Del Duca emphasized that high development charges were an unfair tax burden on homebuyers, particularly affecting young families wanting to live near where they grew up.

The Whole Story:

The City of Vaughan has approved massive development charge reductions, which historically have been among the highest in the Greater Toronto Area. 

From 2009 to 2021, the city’s development charge rates increased by 229%, and, since 2018, rates have increased another 66%. 

For example, prior to the changes, the city’s published development charge rate for low-rise residential was $94,466. The new City development charge rate applicable to low-rise residential will now be $50,193.

This step, which comes following a Member’s Resolution from Mayor Steven Del Duca to find solutions to this housing crisis, positions the city to address affordability challenges and to make life easier, particularly for young families.

What is changing

The council-approved staff report calls for the following: 

• That staff revise the development charge rates on all residential development applications to the rates in effect on Sept. 21, 2018, until Nov. 19, 2029, through the use of section 27 agreements.
• That staff lower development charge rates on low-rise residential developments through the use of section 27 agreements.
• That staff initiate a new development charge background study and Development Charge By-law.
• That Council approve a new Development Charges Rate Reduction and Deferral for Residential Development Policy.
• That staff stop charging development charge interest on residential developments.

“Development charges have become an unfair tax burden on homebuyers,” said Mayor Steven Del Duca. “Too many of our residents, in particular young families in our community, have seen their dream of buying a home close to where they grew up, disappear completely as housing prices have spiraled out of control.  We have a housing affordability crisis and it’s time for us to get real about the solutions needed to solve it. Today’s decision by Vaughan Council to dramatically reduce our development charges for the foreseeable future is a strong step in the right direction. I urge other municipalities to follow our lead and do the right thing.”

How big are the cuts

These adjustments apply to various types of residential developments, including high rise, low-rise and mixed-use buildings. According to the City of Vaughan, the reductions, which range from 88% to 92%, translate into substantial cost savings: $44,273 for single-detached and semi-detached homes, $36,318 for multiples, and $28,092 and $20,243 for large and small apartment units, respectively.

The policy also suspends development charge interest on residential developments. This announcement from Vaughan is one of the most comprehensive and leading measures taken to address the cost to build and development charges. 

According to Building Industry Land Development Association (BILD), in the GTA, fees, taxes and charges from all levels of government account for almost 25 per cent of the cost of a new home for the new homebuyer.

Based on BILD’s 2024 Municipal Benchmarking Study, Vaughan’s municipally added fees and development charges on new homes had been the highest in the GTA. These new DC rate reductions by the City of Vaughan, effective as of November 19, 2024, will lower the city’s DC rate to well below comparable towns and cities in the region.

“BILD recognizes and commends Mayor Del Duca and the City of Vaughan for taking bold action to address housing supply and the cost to build by lowering development charges,” said Dave Wilkes, President and CEO of BILD. “This will enhance the financial viability of future projects, unlocking potential investment and stimulating supply.”