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Increases in fees charged by St. Marys for building permits will remove a burden on ratepayers if approved by city council next month.

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Increases in fees charged by St. Marys for building permits will remove a burden on ratepayers if approved by city council next month.

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The problem?

More expensive permits could mean more expensive homes.

A consulting firm hired to review building permit fees in St. Marys shared its final report with councilors at a meeting on Tuesday. The report found that the city’s current fees only cover 83% of the annual cost of administering and enforcing Ontario’s building code, leaving ratepayers responsible for about $225,000 a year.

To close that gap, Grant Brouwer, director of construction and development at St. Marys, recommends a new fee structure that would increase the cost of permits for a variety of different projects.

The bump is long overdue, Brouwer argued Wednesday. St. Marys has not increased its building permit fees since 2006.

“One thing we’re very strong on is this: Development pays for development at St. Marys,” Brouwer said. “I think (the increases) are fair for the cost of service.”

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If the higher fees are approved, a permit to build a 2,500 square foot single-family home in St. Marys will cost $3,150 next year, or $950 more than it does now. It would be the third most expensive among nine nearby communities compared in this week’s report, behind Zorra Township ($3,800) and the City of Stratford ($3,375). A permit for this type of construction in neighboring London costs $2,887, the fourth highest on the list, according to the report.

Increases for other building types in St. Marys would be less.

The permit for a 1,500 square foot townhouse, for example, would drop from $1,760 to $1,888, the fourth highest in the report and the second highest in Perth County, still behind Stratford.

Not all types of building permit fees will see an increase if council decides to go ahead. The permit to renovate a 1,000 square foot commercial space in St. Marys is currently $1,760, the most expensive in the area. This would be reduced to $700 under the new fee structure.

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The new fees St. Marys would consider would continue to be competitive among Perth County neighbors, councilors heard Tuesday, and city staff support the increases.

Advisors are wary of a potential downside, however.

Three councilors asked whether higher fees could make feasible home builds in St. Marys more expensive for potential buyers, a possible setback at a time when house prices in the area are finally starting to cool off.

A St. Marys builder warned Wednesday that higher fees would “of course” have an impact.

Despite a market slowdown fueled by interest rate hikes by the Bank of Canada, recent spikes in the cost of building materials, for example, continue to have an impact on house prices.

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Higher building permit fees would be no different.

“If all of those costs go up, whether it’s nickels, dimes, or dollars, that increases the value in the end,” the builder said.

At this point, however, the St. Marys building community has remained silent on potential fee hikes. The builder reached Wednesday requested anonymity, citing the small size of the community and no one from the local construction industry showed up at Tuesday’s town hall meeting to oppose the staff recommendation.

Recent private meetings between staff and builders have raised no serious concerns, Brouwer told the council.

“They understood the fees had to go up,” he said.

The incentives St. Marys offers to developers for units offered below market value are also available through the city’s community improvement plan, Brouwer added.

St. Marys Mayor Al Strathdee appeared to back the proposed increases on Tuesday.

“I understand the concerns about affordability, but…when we look at the big picture…we’re still very competitive in the market compared to our neighbours,” he said. “I can certainly justify the increases.”

The St. Marys council will next meet on October 11.

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