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WCEL
> Issues > Urban Growth and
Development > Smart Bylaws Guide > Part
7
Smart Bylaws Guide – Part 7
7. Support Municipal Goals Through Cost Recovery by Ensuring
that Development Cost Charges and Property Taxes Reflect the True
Cost of Different Types of Growth
Municipalities may recover part of growth-related infrastructure
costs through development
cost charges (DCCs). They can also create incentives for
certain types land use, for example by creating a riparian tax
exemption for protected riparian lands. However, the use of
these fiscal tools rarely takes into account whether new development
is taking advantage
of existing infrastructure. Fine tuning DCCs and other cost
recovery mechanisms, such as drainage utility fees, helps
municipalities to more equitably account for the cost of new
development.
The cost of development for municipalities is significantly lower if existing
infrastructure can be used to service more units or square footage
of built space. These savings derive from new buildings that
incorporate water efficient techniques, and from new development in
already serviced areas that decrease the demand for road infrastructure. DCCs
can reflect these differences in cost, and encourage more efficient
development.
Local governments have some ability to encourage property owners
to sustain the green infrastructure, such as by decreasing property
taxes when a conservation covenant has been placed on riparian land.
This approach makes fiscal sense because landowners who help to
maintain the green infrastructure will decrease municipal costs over
the long term.
The costs and benefits of new development are complex and
dependent on many changing factors. Evaluation methods vary, and it
is important for municipal councillors and staff to understand how to
assess the accuracy of project information.
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