Development Charges

• When a developer applies to build housing or commercial spaces in Guelph, they pay development charges to the City. These development charges cover the costs of new infrastructure and services needed to support new homes and businesses.
• For instance, when you move into a newly built home, you probably assume you’ll be able to turn on your tap and get water to drink. You’ll rely on your toilet to flush and expect to have access to roads so you can travel to school, work, shopping or appointments. Additionally, when you call 911, you’ll rely on paramedics, police or firefighters to be there when you need them.
• The City of Guelph provides these services and more through the building of infrastructure that connects to newly built homes and businesses.
• Some of this infrastructure you may never see—like watermains, wastewater mains and stormwater mains. Other infrastructure and amenities you will see—like roads and sidewalks, paramedic stations, recreation centres, parks and libraries.
• As Guelph grows, development charges contribute to the costs of this new infrastructure, lessening the impact on current taxpayers and ratepayers. To see a full list of services supported by development charges, visit guelph.ca/dc.

• Every year, the City raises development charges to align with inflation. This adjustment helps cover regular increases in the costs of capital projects—such as new pipes, brick-and-mortar or asphalt—as well as wages for the people building infrastructure for the City.
• The Development Charges Act also requires municipalities to update their Development Charges Bylaw a minimum of once every 10 years. A Development Charges Background Study is required to support bylaw updates.

As of November 2024, Guelph’s development charges rates were at the lower end of municipalities in southern Ontario.

Recently, some people have asked about using property taxes and utility rates to cover the costs of new infrastructure needed to support growth.

• Development charges account for 27 per cent of the funding for the City’s 10-year capital budget—about $645 million.
• If the City removed development charges, this amount would need to be replaced by another source. The only sources of funding under the City’s direct control that could replace development charges are property tax and utility rate increases. These higher property taxes and utility rates would impact all residents, including low-income families and seniors.
• Additionally, it is unlikely to result in making housing more affordable. Banks and mortgage lenders do not just look at the cost of a home when considering whether someone qualifies for a mortgage; they also consider the property taxes and utility costs for the area. If the City raises property taxes and utility rates to pay for growth, it means housing may be less affordable, rather than improving from this change.
• It is also unlikely that lower development charges would reduce the final cost of the home. Previous studies in Ottawa and the GTA showed that areas with lower or no development charges did not have lower housing prices (Source: AMO. 2022).
• Housing is priced based on what home buyers are willing to pay (market price), so there is no assurance that lower building costs would result in lower prices in the short to medium term.

• To date, the City of Guelph’s policy has been that growth should pay for growth to the maximum extent possible under Ontario’s Development Charges Act, 1997.
• We are committed to providing both current and future residents and businesses with access to essential services and amenities—water, wastewater and roads, as well as parks, community centres and libraries—that ensure a high quality of life. Our policy has likewise been that extending these services to new homes and businesses should not come at the expense of current tax- and ratepayers, which include low-income residents and seniors.
• Sustainable growth over the long term will require predictable, reliable funding partnerships with all levels of government.

Development charges help the City of Guelph cover the costs of growth.

• As more people move to Guelph, there is:
  • more demand for water and wastewater services;
  • more cars, bikes, pedestrians or buses on the roads;
  • more calls to emergency services; and
  • more use of City facilities like libraries and community centres.
• Additional dwelling units—or ADUs—create new spaces for people to rent or call home. This adds to the demand for these services.
• Development charges are exempted, in certain instances, for ADUs built in Guelph. These exemptions are legislative requirements under the Development Charges Act. In some cases, development charges will apply to ADUs, such as when it is the third ADU (fourth unit), or if it is a second ADU in an ancillary (separate) building.
• In 2024, the City exempted $10.4 million in development charges for ADUs as required under the Development Charges Act. These exemptions are funded from property taxes and utility rates.
• The Development Charges Act also provides an exemption from development charges on ADUs that will be rented at an affordable rate.
• These affordable rates must align with the Provincial Government’s Affordable Residential Unit Bulletin over a 25-year period.
• ADUs rented at an affordable rate may also be eligible for the Additional dwelling unit grant, as part of the City’s Affordable Housing Community Improvement Plan.
• To learn more about the grants and see if your project is eligible, please visit our Affordable Housing Community Improvement Plan page.

• When building an ADU, municipal development charges will be required when you:
  • build a second ADU in a new or existing structure that is detached from the primary dwelling; or
  • add a third ADU—or fourth unit—to your property.
• Education development charges may also apply in certain situations, as determined by the Education Act.
• Cash-in-lieu of parkland dedication is required in similar situations; however, there may be exceptions based on the lot’s history and previous contributions to parkland dedication.
• The timing of development applications can also make a difference.
• Where applications for ADUs are proposed one at a time, rather than all at once, cash-in-lieu of parkland dedication would not apply. This is the case even on the third ADU.

Yes! If ADUs are rented at an affordable rate for a period of 25 years, these units will be exempt from development charges and cash-in-lieu of parkland dedication.

• These units must be rented “at arm’s length,” meaning they must be rented to someone who is not related to the landlord/property owner.
• These affordable rates must align with the Provincial Government’s Affordable Residential Unit Bulletin over a 25-year period.

Yes! The Affordable Housing Community Improvement Plan provides grants for property owners who commit to rent the ADU at an affordable rate for a minimum of 15 years, according to the Provincial Government’s Affordable Residential Unit Bulletin.

Affordable units must be rented “at arm’s length” for 25 years to be exempt from development charges and cash-in-lieu of parkland dedication, meaning they must be rented to someone who is not related to the landlord/property owner.