Developers of purpose-built rentals can now stretch the payments for development charges much longer now, according to Ajax Town Council.
Unlike many municipalities who are waiving or reducing DCs, the town stated that they are taking a long-term, sustainable approach, ensuring funds for future growth are secured.
Ajax Council approved a new development charge (DC) deferral program designed to protect critical infrastructure funds while supporting the housing supply.
Currently, purpose-built rental DCs are due on occupancy, with the first six instalments interest-free. Under the new program, developers can stretch payments beyond this period, with later instalments subject to interest at prime plus a town premium.
The program is anticipated to run for two years and requires developers to have ‘skin in the game’, including agreed timelines for building milestones.
Only purpose-built rental projects are eligible, addressing the thousands of units currently in the pipeline amid rising construction costs.
Council was clear: they don’t want to jeopardize the collection of development charges. This program protects these critical funds while also aiming to jumpstart housing starts, unlock bonus funding from other levels of government, and accelerate projects to generate new tax revenue.
Council will review the program in six months to assess uptake and effectiveness.
This initiative strikes a responsible balance between spurring housing and safeguarding funds for Ajax’s future growth.