New home prices may be rising by over $60,000 in some areas of Windsor due to newly proposed development fee changes. Today, we’ll break down what these fees are, why they might come into effect, and how you can entirely avoid them if you’re looking to build your first home in Windsor.
What Are Development Charges/Fees and Why Are They Rising?
A few days ago the Windsor Star posted an article talking about a consultant’s report heading soon to city council suggesting Windsor development charges should increase by more than 150%. These fees, which currently range from $30,000 to $47,000 for a single-family home, could more than double to between $76,000 and $117,000 depending on the area.
With news of these ridiculous hikes it’s obviously sparked concern among builders, developers, and housing advocates, who warn that the higher costs will further burden Windsor’s housing affordability crisis. With fewer new homes being built, the already limited supply of housing could worsen, driving up prices for buyers and renters. Critics argue that these increases disproportionately impact smaller builders and first-time developers, discouraging new construction and slowing much-needed housing growth.
What Are Development Charges?
- Development charges are fees that municipalities impose on usually vacant land that hasn’t been built on before. In theory these fees are supposed to fund the infrastructure needed to support them.
- This includes roads, sewers, water systems, parks, and emergency services like fire and police stations. It’s important to note that in Windsor-Essex, developers are actually responsible for paying for all the infrastructure as well on top of the developer fees. This means if they want to build on vacant land they’ll be responsible for paying for roads and sewers to access this land. The municipality’s responsibility only comes in after when it comes to the maintenance of these services.
- It’s important to note that development fees are not the the same as building permits, which are fees charged for the approval to start construction and ensure compliance with building codes.
Why Are Development Fees Increasing?
1. Expanding Windsor’s Sandwhich South
Expanding areas like Sandwich South (Hospital) need new roads, sewer systems, and utilities, requiring substantial funding.
2. General Inflation
Like almost everything in Canada, things are getting more expensive which means the City of Windsor needs even more money to fund their operations and orders.
Inflation is a factor but it’s important to point out that all across Ontario, development fees have been growing much faster than the rate of inflation. For comparison, the rate of inflation within the GTA was roughly 41% while the increase rate of developments fees is nearing 1000% which isn’t evenly remotely close to the rate of inflation.
3. Shifting the Burden
By increasing development charges, the city avoids raising property taxes, which would be highly visible to current residents and politically unpopular. Raising property taxes is more noticeable and affects all homeowners. By targeting new builds, the costs are shifted to developers and then aspiring first time home owners which can be a much more “hidden” cost.
How to Avoid Windsor’s New Development Fees
Option 1: Buying an Existing Home in Windsor & Building New
Avoid Development Charges: Buying an existing home in Windsor eliminates the need to pay these fees entirely. If your plan is to build brand new, it might be worth looking into cheaper, rundown homes that can be demolished and rebuilt to avoid huge development fee’s opposed to building brand new on undeveloped land.
Adding Value with ADUs: Many Windsor homeowners are now building accessory dwelling units (ADUs) on their properties. These secondary units can act as your main residence and be brand new, custom built to how you prefer. This option avoids new development fee’s and still gets you a brand new home in Windsor. Additionally the existing ADU can be used as a rental property offering additional income or a granny suite for close relatives.
Option 2: Building in the County
Municipalities outside Windsor, such as Essex or Lakeshore, often have significantly lower development fees. In some nearby towns, development charges for a single detached home are closer to $10,000—a fraction of Windsor’s rates. This option is something more and more families are choosing as the cheaper housing is worth an extra 10-15 minutes on their morning commute every day.
3. Building In Development Charge Exemption Areas
The City of Windsor has designated a certain area within Windsor to be completely exempt from any new development charges. Although, empty lots in this area are hard to come by, it can be a huge advantage to avoid all development fees by building your new home within the white areas outlined in the graphic below.
How Sovereign Developments Can Help
At Sovereign Developments, we’ve dealt with the city and know these bylaws better than anybody (Our Founder was a City of Windsor Inspector for 30+ Years). Contact us today if you have any questions about building your first home within Windsor and we’ll be sure to answer any of your questions!
Conclusion
Windsor isn’t alone in raising development charges, but the scale of the increase is staggering. In Toronto, for example, new development fees for a single-family home are around $137,000. While Windsor’s fees are lower, they represent a much larger percentage increase. Whether through higher home prices, rents, or taxes, these costs ultimately fall on residents. With fewer homes being built and higher costs for buyers, Windsor’s housing shortage is likely to deepen, driving demand up and affordability down.
Windsor’s development charge increases might seem like just another fee, but the reality is that they’re shaping the housing market in profound ways. Builders and buyers alike need to adapt, whether that means exploring the county, buying existing homes, or taking advantage of creative options like ADUs. If you’re navigating these challenges, planning carefully and staying informed is your best bet to succeed in this changing market!