Toronto is increasing development charges by nearly half, adding tens of thousands of dollars to the costs of building most new homes even as the city suffers a housing affordability crisis.

City council voted on Tuesday to raise development charges (DCs) for residential buildings by 46 per cent, with the increase phased in through May, 2024, arguing the money was needed to pay for new infrastructure associated with the added homes. The charge for non-residential buildings would go up by 40 per cent.

Development charges would be waived on the second, third and fourth residential units on a single property, provided there are no more than four units, in an attempt to encourage small-scale density.

Builders warned that higher charges for most homes would lead to less construction. And critics say that the move would unduly shift costs to new residents as a way to prevent property tax rises for current home-owners.

“The burden will fall on renters and new homeowners,” argued Jacob Dawang, with the advocacy group More Neighbours Toronto, in its formal submission on the change. “The city budget should be shared more equitably between those property owners who have lived in Toronto for decades and newer residents.”

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