There are only a few places that cities can turn to for revenue – property tax from residents and businesses, developer levies and fees in new communities, monthly utility payments from property owners, user fees, and federal and provincial government grants. But what are levies in particular? They are fees paid by Developers to cover a proportionate cost of necessary infrastructure for new developments.
The City of Regina currently uses development charges (referred to as Service Agreement Fees or SAF) to fund the infrastructure investments required for or triggered by new growth. This includes such things as roads, water, sewer, storm drainage, parks, pathways and recreational facilities. Currently residential, commercial and industrial Developers pay these development charges when building in new areas around the city. In certain cases, when new infrastructure is built that will benefit both new and existing residents (such as a dog park), development fees and property taxes may split the cost.
A new Servicing and Agreement Fee and Development Levy Policy was approved by City Council in December 2015 to address the rapid growth of Regina and the increased utilization of existing services and demand for new infrastructure
The new policy supports Design Regina and outlines development charges that will support Regina growth to 235K and 300K neighbourhoods. It also charges and supports growth from a system-wide infrastructure perspective. With the new policy and need to support the rapid growth, the fees increased significantly. Service Agreement Fees grew nearly 600% from the 2006 original $74K/ha to $442K/ha in 2014 – and it will likely still rise in future years. In 2016, the Development Charge levied by City of Regina reached $380K/ha with a schedule by the City of Regina to reach $450K/ha. Upsizing infrastructure expectations on Developers to meet future city growth is estimated to be an extra $70K/ha. Some of this investment is offset with rebates; however, this portion may come to an end when the population reaches 300K.
As discussed in “Regulation Adds Cost” these fees ultimately get passed onto the new Home Owner in the new community which raises the question around the affordability of new homes and who should pay how much for growth. Not only do new Home Owners benefit from the new communities in the City, but it also benefits those residents around it and the City overall.