Benefits of Growth

New residential construction brings vitality and municipal revenue to a City

There is not enough supply of housing in Canada,1 in Ontario,2 or in Peterborough for our population.3 The most talked about reasons for the low supply of housing is material shortage,4 low inventory,5 and red tape.6 The red tape that municipalities need to address is zoning. The cost of changing zoning by laws is minimal for the municipality but provides developers more certainty that projects will happen in a reasonable timeline. The cost of not updating the zoning by laws is a lack of growth, which has resulted in a lack of funding for the city. 

The City of Peterborough has not seen the expected growth in newly built residential dwellings for the past 30 years. The lack of growth has left the city without adequate funding for services and with an increasing homeless population. Growth is extremely important to our community. Regions that grow enjoy countless opportunities and benefits, such as a larger tax base, more opportunities for children to continue their adult lives in the community they grew up in and further economic development through new businesses opening in our community. However, Peterborough has seen business opportunities leave the region due to lack of residential dwellings, lack of land and too much municipal red tape. New development brings enormous benefits to a community- both economically and socially. 

 In assessing the role of growth and new development, it is important to recognize that:

  • Development supports growth, which promotes prosperity. Without development, there can be no growth. Communities that do not grow do not prosper and do not offer an attractive quality of life. 

  • Growth is widely understood to have substantial benefits for communities. Growth is vigorously pursued by all levels of government. Governments generally recognize that growth creates new and better jobs, higher incomes, a stronger local economy and tax base, and a more vibrant community. It provides residents with greater prosperity and improved chances for a better quality of life7.

  • Housing is a critical element of growth. In addition to providing employment and increased revenues to a community, the availability and cost of housing is a key part of a community's capability to attract private investment.

  • The housing industry is a key part of Peterborough's economic infrastructure. Professional home builders are critical to a healthy viable economy in a community. Our industry is a key part of Peterborough's social and economic fabric, an essential resource for building and maintaining our homes. 

  • Development creates jobs in the community. In 2021, new residential development in the City of Peterborough resulted in the creation of 860 jobs in the construction industry alone. In addition, spin-off jobs are created in a myriad of industries providing goods and services necessary for construction work. Further, there is a "multiplier effect" when the families of construction workers and other workers spend the incomes generated from this work, which generates additional jobs.

  • Development generates substantial municipal revenues. Each new single-detached home constructed in Peterborough adds $47,000  in revenues, through development cost charges. In 2021 residential construction brought over $8 million dollars of revenues for the City. Peterborough invests these funds in capital works - creating still more jobs through infrastructure spending. Other types of charges on new development, such as building permit fees and planning application fees, generate additional revenues for the city.

  • Development helps finance improved community services. Each new home built last year in Peterborough will contribute future annual property tax revenues to enhance municipal services for all residents. For example, single-detached family homes alone (182 units started in 2022) will generate over $2M per year of future revenues (based on average residential property taxes of 1.49% and average MPAC value of $800,000 per new single-detached home). In addition, the other dwelling types (semi-detached, row homes, and apartments) will generate future revenues.

  • Development enhances opportunities for homeownership. New residential development helps to ensure that the market for housing remains competitive and that home seekers have a range of housing from which to choose. A competitive market is important for housing affordability.

Development provides significant BENEFITS to Peterborough. Growth and new residential development result in an enormous range of benefits for a community - benefits which contribute to a better quality of life for all residents. Too often, growth is viewed from a negative perspective. For Peterborough to grow and prosper, and for our citizens to enjoy prosperity and a better quality of life, it is essential that we recognize the enormous benefits that growth and new residential development bring.

Development Supports Growth - Which Promotes Prosperity

In municipalities, just like in countries and provinces, economic growth is the foundation of prosperity. One needs only to look at the average incomes, unemployment rates, and out­ migration numbers for slow-growth regions and communities to recognize the critical relationship between growth and prosperity.

In a nutshell, economic growth:

  • Enhances opportunities for all residents and creates the capacity for governments to invest in important public services - which

  • Leads to vibrant communities, a talented, flexible workforce, quality public services, and a healthy sustainable environment - which

  • Creates the necessary conditions to attract and retain investment and the 'best and brightest' people - which

  • Creates sustainable economic prosperity with a better performing economy and a higher standard of living - which leads to further growth, and so on.

Economic growth is the foundation for prosperity in a modern economy. But growth cannot occur without residential development. The two go hand in hand. Without new development, there will be little or no significant growth. Without growth, there is little need for new development - economic stagnation is the result.

Development is part of the process of growth - a process which benefits everyone in the community by encouraging private investment and a stronger local economy.

However, the City of Peterborough has not been growing as fast as neighboring areas such as Clarington, Northumberland or even the County of Peterborough.

Benefits of Growth for our Community 

Growth is vigorously pursued by all levels of government. Governments generally recognize that growth creates new and better jobs, higher incomes, a stronger local economy and tax base, and a more vibrant community. It provides residents with greater prosperity and improved chances for a better quality of life8.

All levels of government have explicit programs to promote economic growth - with the objective of creating strong communities with globally competitive economies:

  • The Ministry of Economic Development, Job Creation and Trade promotes growth and job creation in our province 
  • Industry Canada and a host of federal agencies promote exports and investment in Canada. Federal regional development agencies have a mandate to attract investment and jobs to underdeveloped parts of the country.
  • Peterborough Kawartha Economic Development reports quarterly to City of Peterborough council and works to bring new business opportunities to the Peterborough Region9
  • Local startups such as Ptbo Canada have invigorated the business, arts and sports communities in Peterborough giving @Ptbo_Canada its own social media identity separate from Peterborough, UK 
  • The Peterborough Kawartha Chamber of Commerce works with businesses to network locally and celebrates successes like Walton Wood Farm who now ships internationally and has partnered with other local businesses like Couture Candy, who donated $16,700 to PRHC in October. 

Brining more businesses to our community brings in more funding for the municipality, but housing is required to expand to accommodate the economic growth.  Negative perceptions of growth threaten to undermine these efforts at encouraging growth and development. They have the potential to discourage new development and thereby deny our community the benefits enjoyed by growing vibrant communities.

Housing is a Critical Element of Growth

In addition to providing employment and increased revenues to a community with the expanded tax base, the availability and cost of housing is a key aspect of a community's capability to attract private investment. In today's highly competitive global economy, businesses take many factors into account in their location decisions. In most growth industries, factors such as the availability of transportation links to markets, access to important supplies of inputs, and other physical factors are less critical than in the past - most communities can satisfy these requirements for a company.

Increasingly, companies are making their location decisions based on the availability of qualified labour and the quality of life in a community. The availability and cost of housing is a critical factor for a community seeking to attract new investment. Qualified people are attracted to communities with a range of housing options which they can afford, and an appealing quality of life. The same attributes will be attractive to executives seeking not only a qualified supply of labour, but also a community in which their own families can prosper and enjoy a superior quality of life.

The City of Peterborough has everything a business needs to open here: a regional health care center, a university and a college, a vibrant arts community and plenty of sports including an OHL hockey team. But despite all these big city amenities, the City of Peterborough does not have enough housing to support growth. The downtown core is a 7 block stretch between one way roads with 3-5 storey mixed use buildings, which quickly changes to detached homes, many of which have been converted into office spaces. There is no plan to densify downtown to accommodate the population, many of which are students who need housing and need to live close to transit. 

The lack of housing in the City of Peterborough has resulted in the slowest growth rate in this region at 3.2% in 2021. The lack of growth is linked to the lack of housing, which results in less revenue for the municipality to provide services. 

The professional home building industry is a critical component ofPeterborough's social and economic future. Deterioration in the capacity of the industry would lead to significant problems in the future - problems which will not be easily remedied since it takes years to develop the skills and competence of professional builders. An economically viable and profitable home building industry is a key element in the local economy.

Profitability is an essential part of our economic well-being - in all industries, including home building. Without profits, an industry will wither as important parts of the industry seek opportunities elsewhere - in other activities, in other communities. The home building industry is no different. If Peterborough is to continue to enjoy the high quality of housing that we have come to expect, it is important to maintain a viable and profitable professional home building industry. That means not taking the industry for granted, but instead seeking ways to ensure that it can continue to perform its critical role in our economy and society.

Development Generates Substantial Municipal Revenues

New development results in revenue for Peterborough - revenues which are used to enhance the services for local residents. The revenues to Peterborough consist of two main streams: development charges and taxes. 

Development-related revenues - the developer and builder provide substantial revenues to Peterborough through various fees and charges related to construction. For a typical new single-detached home, an average of $47,245 in development cost charges goes directly to municipal coffers to finance new infrastructure and other services. Other types of fees and charges on new development, such as building permit fees and planning application fees, generate additional revenues for Peterborough. In 2021 the City of Peterborough’s development charge revenue was approximately $12 million dollars. 

Property taxes - residents of new developments add to the local tax base. On average property taxes account for $412 million dollars in the City of Peterborough’s budget. In 2021 that increased by over $4 million dollars due to new residential construction. 2021 saw a lot of construction for the City of Peterborough, but there is demand for more housing. 

Development Helps Finance Improved Community Services

The revenues generated from new residential development help Peterborough to provide services to both new and existing residents. For example:

  • Revenues collected from developers and home builders cover the costs of providing new infrastructure (e.g. roads, sewer, water and other services). This infrastructure can be used by all community residents.

  • Dedications for parkland (or cash-in-lieu of actually providing the land) are provided by developers as part of the approval process for new developments. This parkland is there for all community residents.

  • The increase in annual municipal property tax revenues resulting from new development helps to finance the services provided by Peterborough. These services are enjoyed by all community residents.

Increased municipal revenues provide the opportunity to improve the quality of life in the community and make it a more attractive place in which to live and work. They provide the resources and capacity necessary to achieve greater social equity through provision of much­ needed services to those less fortunate. They also provide the funding necessary for maintaining critical social and economic infrastructure (e.g. public art, The Canoe Museum, etc.) which are important to the quality of life of the residents of Peterborough and are a key factor in attracting businesses and workers to locate in Peterborough.

Development Enhances Opportunities for Homeownership

Homebuyers benefit when there are many builders offering differing products. Competition helps to ensure that homebuyers have a variety of options from which to choose - at competitive prices. Prospective homebuyers have a better opportunity to obtain a home at a cost they can afford. Competition also promotes housing quality. In the 1980s there were over 40 home builders in the City of Peterborough, now there are only a dozen. Creating a transparent planning and building process allows new development companies to enter the market, keeping prices competitive for everyone. Starting a new business as a home builder is not for everyone with the high risks and inconsistent planning approval timelines, plus rising prices, inflation and the shortage of building inspectors, creating a business plan is impossible for anyone who is not an experienced builder. 

Homeownership remains an important goal for most Canadians10. There are many reasons for this

- including the financial security of equity in a home, the long-term lower costs in owning a home, and the desire to influence and modify their living environment to suit their needs and financial capacity11. Housing prices and the financial ability to own a home are important factors in the location decisions for families seeking a place to live. Children who grow up in stable homes have more opportunities to flourish since their basic needs are met if their parents own their home. 

Any improvements in prospects for residential development will help to keep housing prices under control, raise the homeownership rate and improve the economic prospects for the community. Increasing supplies of housing, whether built for homeownership or renting, reduce the pressure on the existing rental market and on rent levels in the community, contributing to improved housing affordability.

Housing is a national and provincial priority, and was a top election issue for the 2021 federal election, and 2022 provincial and municipal elections. The provincial government is making housing a property with legislation such as Bill 109 and Bill 2312. There are opportunities for Peterborough to use the new legislation to build more houses, accommodate the current population and increase municipal revenues with new property taxes. The economic impact of residential construction was nearly $1 billion in 2021 between wages in the construction industry and individual improvements to existing homes in the City and County of Peterborough13.

Conclusion: Development Provides Significant BENEFITS to Peterborough

Growth and new residential development result in an enormous range of benefits for Peterborough - benefits which contribute to a better quality of life for all residents. Growth means more and better jobs - which promotes the retention of current skilled workers and attracts other workers from elsewhere. It means greater resources available to Peterborough to fund the services which make this a great place to live and work. In turn, this makes Peterborough more competitive as a location for companies to expand or build new facilities and generate more jobs - and to foster more growth, and greater prosperity and a better quality of life for our citizens.

Too often, growth is viewed from a negative perspective. For Peterborough to grow and prosper, and for our citizens to enjoy prosperity and a better quality of life, it is essential that we recognize the enormous benefits that growth and new residential development bring.

Housing is a key part of the process of growth - and in generating the benefits of growth for a community. A competitive housing industry which provides a range of housing choices at an affordable price is an integral part of the process of fostering growth and promoting the future prosperity of a community. The housing industry provides more than just jobs and economic activity - though these are clearly important to a community. The housing industry contributes to the competitiveness of the community by providing high quality living environments at an affordable cost. Housing choice, and the opportunity to own a home, is an important component in a community's competitiveness in attracting growth.

August 2023 article in the Hamilton Spectator















Growth Rates for the Eastern GTA
Housing Completions for the City & County of Peterborough