Before you decide to develop your piece of land, there are many costs you need to know about. Whether you wish to sever a portion of your land to create a new lot or develop a 300 lot plan of subdivision, the cost to develop can be overwhelming.
The costs will depend largely on the type of development application – is it for an Official Plan Amendment, a rezoning, a plan of subdivision or a plan of condominium? It depends on the conditions of the site – does the site contain any significant wetlands, or is it home to an endangered species? What was the former use of the site? Does it contain any hazards? These factors determine the range of technical studies required as part of your development application. Municipal staff will review the studies and evaluate the suitability of the site for development. Lastly, the municipality in which you are developing also affects your cost, as application fees differ from municipality to municipality. The following is a list of the normal costs associated with development. Although this list is not exhaustive, it will give you a good sense of the cost of developing land.
1) Municipal application fee: the cost for planning staff at a municipality to process, review and evaluate your application. Here is an example of Planning Application Fees for the City of Kawartha Lakes.
2) Local Conservation Authority fee: if your lands are located within an area regulated by a Conservation Authority, there is a cost from the conservation authority to review and evaluate your application, as well as a Permit Fee, if your property is regulated. Here is an example of the Review Fees for the Kawartha Region Conservation and Permit Fee
3) District Health Unit fee: the health unit charges a fee to inspect the site where development is proposed on either partial or private services;
4) Cost of maps, preliminary survey, technical studies in support of the application, cost of copies;
5) Cost of consultant to provide professional services in order to guide your development through the approval process to maximize project success and minimize obstacles;
6) Costs for fulfilling conditions of consent, a plan of subdivision or a plan of condominium (your development application may receive draft approval and can only receive final approval once a set of conditions has been satisfied by the municipality). Some examples of conditions include:
- Official Plan Amendment and/or rezoning
- Entrance approval (including culvert, road improvements, inclusion of signs)
- Site Plan
- Parkland dedication or payment of cash-in-lieu of the parkland
- Registration of plan
- Registration of deeds
7) Review fee to ensure conditions have been met;
8) Costs associated with site plan approval, including drafting of the plan by a qualified design technician and execution of site plan agreement
There is one more fee before you can start building, and it seems to be the most startling cost for most landowners: Development Charges
What are Development Charges?
It is a charge imposed on land developers, by a municipality, to help offset the capital costs of providing infrastructure and services to new development. The Province of Ontario passed the Development Charges Act in 1997 allowing municipalities to pass by-laws to impose charges to new development.
Most new development must utilize existing infrastructure, such as:
- Roads
- Libraries
- Stormwater management
- Parks and recreation
- Emergency Services (i.e. Fire, Police, Ambulance)
- Public Transit
Development charges are one-time charges that apply to all new development (residential, commercial, industrial, etc) to help recover some of the costs incurred in providing the above infrastructure. You are required to pay development charges if you: 1) erect a new building; 2) make an addition or alteration to an existing building which increases the gross floor area or number of units; and 3) redeveloping a property which results in a change of use.
Collection of Development Charges
The lower and upper-tier municipalities and District School Boards (Public and Catholic) normally collect development charges at the time a building permit is issued
How much will it Cost You?
There are several factors that determine how much you will pay for development charges including the:
- Type of Development: Is it residential or non-residential (commercial or industrial)?
- Size of Development: How much of the site area will be developed? What are the number of units being proposed? Is it a single-detached dwelling or apartment building?
- Location of Development: Which municipality is it located in? Is the development located in an urban area of the municipality or outside of the urban area?
Below are three real-life examples (each a different form of development) of the costs incurred as a result of Development Charges:
Example #1
| Type of Development | Size of Development | Location of Development | Rate of DC | |
| Non-Residential (commercial storage building) | 1 storey building at 3000 ft² | Urban Area | $5.80 per ft² of gross floor area | |
| Total Charge | $17,400 |
Example #2
| Type of Development | Size of Development | Location of Development | Rate of DC | |
| Residential | 13 single detached dwellings | Outside of urban area | $20,940 per unit | |
| Total Charge | $272,220 |
Example #3
| Type of Development | Size of Development | Location of Development | Rate of DC | |
| Residential | Two (2) three-storey apartment buildings containing 33 and 27 units, respectively | Outside of urban area | Region:Two bedroom units $12,239Township:$8,110 per unit | |
| Total Charge | $1,221,000 |
Summary
Knowing your fees prior to submitting an application is most beneficial as it will help determine the type of development you wish to pursue. Application fees, review fees, permit fees, development charges, etc, add up quickly. Consulting a professional planner who understands the process and the types of fees that will be required for your type of development from the get-go can help you decide whether developing your piece of land is right for you.