August 3, 2016 – Developers already considering core projects after city waives fees…
A day after city council waived development fees in the city core, at least one developer says he’s sold.
Peter Valente, president of Remo Valente Real Estate and the Valente Development Corporation, says thanks to the elimination of development fees, he will soon build a multi-residential building on Ouellette Avenue near Erie Street.
“We’re probably going to be the first ones in with a new residential development there,” said Valente, who predicts he will start seeking approvals for his new construction project in six to eight months. “And I think it’ll be successful.”
Valente sees good times ahead for downtown Windsor, which already has a low vacancy rate — and falling. According to the Canada Housing and Mortgage Corporation, in October 2015 downtown Windsor’s vacancy rate was 6.6 per cent, down significantly from October 2010 when the vacancy rate stood at 15.8 per cent.
Some real estate agents feel the vacancy rate has fallen even further since.
“I don’t think there’s much rental supply downtown right now,” Valente said Wednesday. “If the city is looking to revitalize downtown the first step is new multi-family development, starting with rentals.
“Once you have new residents then there will be demand for a butcher shop, a hardware store, a grocery store and related services.”
Valente would like to see even more incentives for developers, such as property tax breaks for new buildings.
City council on Tuesday waived development fees, which help pay for such things as roads and sewers, roughly between Peter Street to the west, Pillette Road to the east and Tecumseh Road to the south. Rebates of 25 – 75 per cent already existed in those areas, but not many builders took advantage of the reduced costs.
An 82-page report prepared by Toronto-based N. Barry Lyon Consultants Ltd., which went to council Tuesday night, noted that dilapidated housing, fewer schools, higher crime rates and lower socio-economic standing hurt Windsor’s core neighbourhoods.
Unless drastic actions are taken little will change, says the report. Lower property values, higher foreclosures, and vacant properties make a large area less attractive for revitalization and new development.
Ben Klundert, past president of the Greater Windsor Home Builders’ Association, said the waived fees may also encourage his company, B.K. Cornerstone Design/Build, to try developing downtown.
“Some of the areas we may be looking at are in the downtown where we could put a store-front bottom with either apartments or condos or townhomes on the upper level,” he said.
Klundert said the waived fees coupled with the downtown expansion of the University of Windsor and St. Clair College makes the core a suddenly more appealing place to do business.
“The Home Builders’ Association applauds council’s decision,” Klundert said. “We believe downtown is going to be a very underdeveloped area for student housing. Dropping development charges goes a long way to helping people make that decision to build, because you can be much more aggressive with attracting students or first-time home buyers.”
In 2015, the city collected $8 million in development fees. But only a fraction of that will be lost with the newly waived fees, since so few new homes and commercial spaces are built on empty lots in the centre of the city. The report predicted that eliminating the fees would cost the city up to $55,000 a year.
Building a new single detached home elsewhere in Windsor costs $22,976 in development fees. In the city core, the majority of those costs have been eliminated for the next five years, after which council will reassess the issue.
That doesn’t mean there are no costs for development on vacant land, however. Development costs are broken into two categories: hard and soft. Hard costs are for roads, sewers and the like, while soft costs help pay for general government, police, fire, parks, libraries and more.
Developers must still pay soft development fees, which means $1,743 for a new single detached home built on an empty lot in the city core.
“The roads and sewers are already there,” said Tony Ardovini, the city’s deputy treasurer. “But somebody moving in will still use services like libraries, fire, police and parks. Most people build in green areas in the suburbs. These new incentives are only for vacant land in the core.