The Missing Middle with Mike Moffatt and Sabrina Maddeaux

Why Ontario Cities Are Sitting on 10 Billion in Cash

Feb 19, 2025

Uncover the mystery of Ontario's $10 billion in unspent infrastructure funds. The discussion highlights how development charges are driving housing prices up, particularly affecting young potential homeowners. Explore the political dynamics at play as municipalities sit on vast reserves while struggling with timely investments. Misleading claims about rising charges spark debate, revealing a stark disconnect between intent and reality. As public awareness grows, the pressure mounts for change in municipal policies impacting housing affordability.

19:01

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Quick takeaways

Development charges significantly inflate home prices, hindering young people's ability to purchase property and contribute to the housing crisis.

Ontario municipalities hold over $10 billion in unspent development charge revenue, highlighting issues of fiscal management and delayed infrastructure investment.

Deep dives

Impact of Development Charges on Home Prices

Development charges significantly contribute to rising home prices, which poses a challenge for young people trying to purchase homes. These taxes, which include community benefit charges and parkland dedication fees, can add over $200,000 to the cost of a home. Since these charges are typically paid upfront when builders receive permits, developers often incur substantial financing costs while waiting to sell properties. As a result, the cumulative effect of these taxes is not only higher prices but also a reduction in the overall number of homes being constructed.

Intro

2min

Understanding the $10 Billion Infrastructure Cash Surplus

2min

The Financial Flexibility of Municipalities and Its Impact on Housing

5min

Challenging Misconceptions About Development Charges

2min

Development Charges and Housing Crisis

8min

In this episode, Sabrina Maddeaux and Mike Moffatt discuss the complexities of development charges in Ontario, highlighting how municipalities have accumulated over $10 billion in unspent infrastructure funds. They explore the implications of these taxes on housing affordability, the political dynamics influencing their increase, and the growing public awareness of the housing crisis.

Chapters:

00:00 Introduction

01:28 Understanding development charges

02:10 The accumulation $10 Billion in unspent infrastructure funds

04:28 Cities are sitting on huge piles of cash but it’s totally above board

06:30 The impact of development charges on housing affordability

08:11 The economy doesn’t care about your intent

09:30 Mike gets in a fight with a city councillor over dev charges

11:20 How a pile of cash improves bond ratings

13:00 Public awareness and pressure for change

15:00 Why Conservatives okay with such high D.C.s

17:07 Shout out to Burlington, Vaughn and Mississauga