Housing construction in London will pump up to $280 million into the city treasury during the next five years, stated a report received at a Monday city committee meeting.
But it won’t mean a surge of city spending. All of that cash is designated to pay for building, to support home construction.
The city’s strategic priorities and policy committee Monday received a report on development charges and how the city’s population, workforce, industry and housing will grow, based on census data.
The report states the city will get anywhere from $262.5 million to $283.2 million in development fee revenue from 2019-24, depending on how much housing is built and what type of homes are constructed. The higher number would mean more single-family homes are built versus apartments.
“We are forecasting a very robust growth scenario for the city, especially in relation to what you have seen the last few years,” said Paul Yeoman, director development services.
Development charges are paid to the city mostly by builders to pay for services that support construction and growth, such as roads, sewers, sidewalks, water and sewage infrastructure.
“We have seen good growth over the past few years and the question is, does it continue? Hopefully it does, in a way we can support and be sustainable,” said Coun. Stephen Turner.
The city pays 10 per cent of development charges, builders 90 per cent. This year those fees stood at $30,435 for a single-family home, $22,829 for townhouses and $14,162 to $19,110 for apartments, depending on how many units.
A highrise residential tower alone can generate anywhere from $2 million to $4 million in development fees.
While home building will boom, other sectors in the city will see stable, steady growth, said Yeoman.
From 2016 to 2021, London expects to see annual home building growth of about 1,128 single family and semi-detached homes, 516 row houses and 704 apartment units for a total of 2,348 housing units.
Business and industry also will see steady growth, with 800,000 square metres in industrial space added by 2044. There also will be more than 750,000 square metres of commercial space by 2044, the report states.
The report also broke down some census data and made forecasts about the city’s growth, including population. London’s population this year is expected to be 395,000. Next year it is forecast to grow to 409,000 and by 2044, about 500,000. That averages out to growth of nearly one per cent a year.
“It’s not slow growth. It is steady and that allows us to be predictable — when we look at the multi-year budget process it is to be predictable — and not make assumptions about growth patterns,” said Turner.
As for employment, in 2016 197,3000 people were working in London and in 2021 that will climb to 207,500. By 2044, it is projected the city will employ 256,800.
“Every five years, it is as though we are adding a town the size of Ingersoll to the city. That is a lot of people,” said Yeoman.
The forecast steady growth stems from London having a diverse economic base, including health care, education, finance and manufacturing, to name few sectors.
It means the city’s is unlikely ever to see a growth spike of a high-demand economy, but nor is it likely to see the lows of a manufacturing city in a downturn, said Kevin Edwards, the manager development finance.
“It is economic diversification. Our economy is not reliant on any one sector like Sarnia with the petro-chemical industry. London has a broader economic base.”