1 Term Paper: The City of Regina’s Development Levies Ashley Paton 500489817 PLG710 Professor Craig Binning November 10 th , 2015 Disclaimer: The views and opinions expressed in this paper are those of the author and do not necessarily reflect the official policy or position of the City of Regina. The information and analyses in this report are based only on what data was available and accessible at the time.
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City of Regina's Development Levies and Servicing Agreement Fees
Report and analysis completed as part of PLG710 - Municipal Finance at Ryerson University in Toronto, ON.
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Term Paper: The City of Regina’s Development Levies
Ashley Paton
500489817
PLG710
Professor Craig Binning
November 10th, 2015
Disclaimer: The views and opinions expressed in this paper are those of the author and do not necessarily reflect the official policy or position of the City of Regina. The
information and analyses in this report are based only on what data was available and accessible at the time.
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November 11th, 2015 To: Members of Executive Committee Re: Policy and Strategic recommendations for Development Levy and Servicing
Financing Agreement Fees for Infill Development _______________________________________________________________________ RECOMMENDATIONS
1. That the Executive Committee approve the removal of the existing infill
Development Levy exemption zone, as per report EX15-22
2. That there be an exemption of Servicing Agreement Fees and Development
Levies for the development of secondary, laneway and garden suites on infill
properties
3. That there be an exemption of Servicing Agreement Fees and Development
Levies for the redevelopment of brownfield sites on infill properties
4. That the impact of laneway and garden suites on existing infrastructure and
transportation capacities, as well as the potential impacts of a Development Levy
exemption, be looked at in coordination with the review of the Laneway and
Garden Suites Guideline following the Laneway and Garden Suites Pilot Project
5. That the City create quantifiable housing targets for purpose-built rental,
affordable ownership, entry-level ownership, secondary suites, and affordable
rental and transitional housing as part of an update to the Regina Comprehensive
Housing Strategy (2013).
PURPOSE
The purpose of this report is to discuss the options available to the City of Regina as they
move towards the removal of their infill development levy exemption zone and to explore
possible exemptions to Development Levies (DL) in order to achieve the strategic goals
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and objectives outlined in the Official Community Plan (OCP) Design Regina, 2013
while still ensuring the long-term financial viability of the City. This report follows the
orders of the Executive Committee made on November 4th, where they directed the
Administration to provide a supplemental report that would contain information on
different models including area-specific rates and associated financial implications (City
of Regina, 2015).
BACKGROUND
The City of Regina is the second-largest city in the province of Saskatchewan and as
outlined in Design Regina (2013), the City’s Official Community Plan (OCP), the city is
planning and managing growth for a population of 300,000 over the next 25 years (City
of Regina, 2013, p. 3). Servicing Agreement Fees (SAF) and DLs are charges levied by
the City to pay for the capital costs brought on by population growth. SAFs are levied at
the subdivision stage via a Servicing Agreement between the City and the developer
while DLs are levied when a development permit is issued on lands that do not require
subdivision but would otherwise be subject to SAFs.
DECISION HISTORY
On October 14th, 2015, the City Planning and Development Department put forward a
series of recommendations to the Executive Committee including an update to the
“Administration and Calculation of Servicing Agreement Fees and Development Levy
Policy” which would see the introduction of a three-year phase-in for a new Greenfield
SAF and DL rate which would be set at $379,000, effective January 1, 2016 (EX15-22,
p.6, 2015). The staff report EX15-22 also recommended changes to the method of
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calculating the share of capital costs allocated to greenfield and infill development, which
would place less stress on the mill rate to pay for growth-related infrastructure projects.
The monies collected from SAFs and DLs for projects that would accommodate one type
of growth over another, either Greenfield or infill, would be allocated 100% to the
appropriate projects, while the monies collected from SAFs and DLs for projects that
accommodate both greenfield and infill growth would be allocated to both types of
projects based on their share of growth, as seen below.
Source: City of Regina, 2015
Since 1989 there has been a large exemption zone for the charging of DLs as seen below.
This area shown in green is the area that the recommendations below will be applied to,
whenever the term “infill” in used.
Source: City of Regina, 2015
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Based on the public consultation done as part of the EX15-22 report, it was noted by both
the public and City staff that there is a need for a differential rate for infill development
and that the exemption zone shown above should be removed. The recommended updates
proposed in the “Administration and Calculation of Servicing Agreement Fees and
Development Levy Policy” have their benefits in proposing a fair and equitable way to
splitting costs between taxpayers and developers.
Lands already exempt from DLs, as per section 4.7 in the proposed “Administration and
Calculation of Servicing Agreement Fee and Development Levy Policy (Appendix A)”
waive off-site levies, or DLs. If a DL exemption is not given for brownfield sites, these
lots have the potential of staying vacant for several more years with the possibility of
becoming more contaminated, leaving unlocked potential in some of the city’s most
central locations and possibly creating a health hazard for nearby residents. The impact
of a DL exemption on brownfield sites could lead to the revitalization of derelict
neighbourhoods and could have positive benefits on the tax base.
Financial Implications
As per the EX15-22 Staff report, the $379,000/ha rate is for residential, commercial, and
industrial. This rate is applied below to a non-exhaustive list of vacant lots that were
previously service stations.
Address Lot Size (ft2)*
Lot Size (ha)
Development Levy Charge
1005 Pasqua Street NA NA NA 1035 Pasqua Street 20,048 0.1863 $70,589
3134 Dewdney Avenue 13,511 0.1255 $47,572 2809 Dewdney Avenue 10,139 0.0942 $35,699 2700 Dewdney Avenue 13,523 0.1256 $47,614 367 Albert Street North NA NA NA
2165 Albert Street 18,732 0.1740 $65,955 15th Avenue and Albert Street NA NA NA
101 Victoria Avenue East 12,125 0.1126 $42,692 106 Victoria Avenue East 45,465 0.4224 $160,082
802 Dewdney Avenue East 23,341 0.2168 $82,184 1775 Dewdney Avenue East 18,925 0.1758 $66,635 1920 Victoria Avenue East 43,729 0.4063 $153,970 2020 Victoria Avenue East NA NA NA
Total 263,553 2.4485 $927,969 *Source: City of Regina’s Assessment & Taxation Records
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This $927,969 of revenue that could be collected from the development of these vacant
and contaminated lots would be surplus to the city as the current policy allows for these
properties to be exempt from paying anything.
Development Levy Rate Exemption for Affordable Housing Units
Goal 1 in the City of Regina’s Comprehensive Housing Strategy (2013) is to increase
the supply of affordable housing, including affordable ownership and rental units.
Affordable housing is defined as a household spending 30% or less of their pre-tax
income on shelter costs (Canadian Mortgage and Housing Corporation, 2014).
Affordable housing is subsidized from the Federal and Provincial levels of government
and the number of units built is dependent on funding from these levels of government.
If a DL exemption is not given to affordable housing developments, developers might be
encouraged to build in Saskatoon rather than Regina because of their existing incentives,
which has several impacts on the City’s potential tax base and the City’s ability to
achieve their affordable housing goals.
Financial Implications
The City of Regina does not currently have a defined set of targets for affordable
housing but the City of Saskatoon does. Regina and Saskatoon have similar Provincial
funding sources and incentives in order to encourage developers to build affordable
housing. Therefore for the purposes of calculating the financial impacts of a possible DL
exemption, Saskatoon’s target of 70 “affordable rental and transitional housing” and 100
“affordable ownership” will be used (City of Saskatoon, 2013, p.9). The City of
Saskatoon differentiates between purpose-built rental, affordable ownership, entry-level
ownership, secondary suites, and affordable rental and transitional housing. For each of
these different types, the City has set annual targets to meet. The City of Regina, in their
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public consultation should explore the possibility of different exemptions or discounts
based on these different types.
# of Units (per year)
2016 Development
Levy Rate without
exemption (per unit)
2016 Development
Levy Rate with exemption (per
unit)
Potential lost Development Levy revenue for City
because of exemption
170 $24,267.37 $0 $4,125,453
The Saskatchewan Provincial Housing Strategy outlined a few different funding
programs and incentives for both municipalities and homeowners including the
Province’s Rental Development Program that funds up to 70% of the capital costs for
new affordable rental units, the Province’s Rental Construction Incentive (RCI) that
matches grants of up to $5,000 per affordable ownership home constructed, and Head
Start on a Home that provides incentives for developers to construct entry-level homes
(City of Saskatoon, 2013, p.4). The City could explore a way of diverting a portion of
these funds to the infrastructure projects needed to accommodate the increased densities.
CONCLUSION
The City of Regina continues to experience a steady increase of population and in order
to achieve the intensification and infill targets outlined the OCP the City needs to look for
ways to incentivize secondary suites, affordable rental and ownership housing, and
redevelopment on brownfield sites. At the same time the City faces extensive and
expensive linear infrastructure upgrades needed as a result of increased densities and
diminished capacities of the existing infrastructure. Exploring the possibility of DL
exemption zones or discounts, specifically for affordable housing units and brownfield
sites, following the removal of the existing exemption zone that covers the entire existing
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city would help the City to achieve the policies of the OCP and of the Province’s several
strategic goals. Creating targets and reporting on the progress of achieving these targets
for this would aide the city in being more transparent and accessible to the public.
Respectfully submitted,
Ashley Paton, Planner II, City Planning Department
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REFERENCES
Canadian Mortgage and Housing Corporation. (2014). Housing in Canada online - definitions. Retrieved from http://cmhc.beyond2020.com/HiCODefinitions_EN.html
City of London. (2015). Our city - the London plan. City of Regina. (2010). Population, employment and economic analysis of Regina.
Retrieved from http://www.designregina.ca/wp-content/uploads/Population_Employment_and_Economic_Analysis_of_Regina_-_2010.pdf
City of Regina. (2013). Comprehensive housing strategy. City of Regina. (2015). Laneway and garden suites guidelines/pilot project. Retrieved
from http://www.designregina.ca/currentprojects/laneway-and-garden-suites/ City of Regina. (2015). Proposed 2015 city of Regina budget highlights. Retrieved from
Markusoff, J. (2014, December 16). Analysis: digging into the numbers on secondary
suites. Calgary Herald. Saskatchewan Ministry of Social Services. (2011). A strong foundation – the housing
strategy for Saskatchewan (provincial housing strategy). Retrieved from http://publications.gov.sk.ca/documents/17/76213-2011-19-Housing-Strategy-for-Saskatchewan.pdf