The popular Hawthorne Villager forums are glowing red hot this week as many soon-to-be residents of brand new Mattamy-built homes received their much-anticipated letters from Mattamy announcing details of exactly how much they would have to pay in increased Halton Region development charges. Now that the posts are flying fast and furious, the magic number seems to be $7888.00 no matter the size or price of the home currently under construction.

The full, ongoing discussion can be found here.

The general feeling is that of rage at this point, and I really feel for the new homeowners who have been hit by this unexpected charge. Fortunately for some, they had lawyers with enough foresight or knowledge of the new homebuying process that they had their contracts amended to cap the amount at $1000 — but for most, it’s a huge extra cost out of the blue — money they either don’t have, or were planning to use for their downpayments, upgrades, new appliances or renovations after moving in.

Initially, I looked at Mattamy with my conspiracy theory hat on: they’re taking great pleasure in passing along this increased development charge to their customers — get everyone incensed enough to protest this increase, so maybe it goes away and possibly they increase their profits. Whatever the case, any charge the Region hits them with, you know they’re just passing it down to the customer. It’s what any business would do.

The Region of Halton has also posted a Q&A on their website here, which was an interesting read:

Information for Purchasers of New Mattamy Homes in Milton

Q: Mattamy says they are requiring me to pay about $8,000 before closing to cover a new tax / levy / development charge that has been imposed by Halton. Is that true?

• No. This cost did not come about due to a new tax, development charge, or levy.
• It did not come about due to an increase in an existing tax, development charge or levy.
• The amount Mattamy Homes is referring to relates to a financial contribution that Mattamy agreed, in 2007 and 2008, to make to Halton Region in two installments to pay for key infrastructure to support growth.
• The amount payable under the agreement is the responsibility of the Mattamy Homes, who now appears to be trying to pass these costs on to you.

Q: This came as a surprise to me. Why am I only hearing about this now?

• Halton Region was not aware that Mattamy Homes did not communicate with you about the amount of the costs before now.
• The industry and Halton began discussions about this subject in 2007.
• The amount of the per unit payment that developers were going to have to make as a contribution was estimated and disclosed publicly in November 2008.
• Mattamy Homes has known these costs would be payable since 2007, and have known the magnitude of how much it would be since October 2008.
• There were over 22 meetings and a full consultative process.
• Mattamy Homes participated fully in the process.

Q: Does Mattamy Homes have the right to pass these charges on to me?

• Mattamy Homes agreed to pay for the costs of new infrastructure under the agreement that they made with Halton.
• Whether or not they can now pass that cost on to you is a contractual matter between you and Mattamy Homes.
• Given that the sum arises from a “payment under an agreement”, and not from a tax, levy or a development charge, you might ask your solicitor if this charge can be appropriately passed on to you under the terms of your agreement of purchase and sale and if the amount under the agreement was fully disclosed to you after November 2008 when the amount of the contribution was estimated and disclosed publicly.

Q: Why did Halton seek contributions from Mattamy Homes and other developers?

• The contributions arise from the long-standing Council approved policy that existing Halton taxpayers should not pay for the costs of growth.
• Halton’s Financial and Implementation Plan determines the actual costs of infrastructure, like roads, water and waste water services, and assigns those costs to each new unit.
• This policy is essential to the long term financial sustainability of Halton.

Q: Can you simply drop the charge or lower it or not apply it to us?

• No, we cannot do that. Halton’s Financial and Implementation Plan for the 2008/2009 Allocation Program is essential to the long term viability of the Region.
• Without it, Halton would face a significant shortfall and burden present and future taxpayers.
• The Plan applies to all new units being constructed in Halton, so there is no ability to make exceptions.

Q: But I can’t afford to pay it. What am I supposed to do?

• The fee is payable by Mattamy Homes.
• It appears they have tried to pass them on to you.

From the Region’s perspective, they’ve charged Mattamy and it sounds like they feel Mattamy shouldn’t pass this on. As stated above, what did they think Mattamy was going to do? Absorb this cost? At $8000 per home, you don’t need to be a math wiz to figure out that’s a big dollar figure we’re talking about. The Region sure sounds like they’re making Mattamy out to be the bad guy on this one….

Some think Mattamy should at least have let their customers know about this charge sooner — however, they themselves apparently only found out about what the exact charge would be in April 2009 according to the Region.

Apparently on September 30th, the Region of Halton will sit down and review a proposal from the builders which may or may not reduce or eliminate this fee.

Grab the popcorn, this one’s going to get interesting.

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