City bets fee holiday will revive construction and ease affordability pressures
The City of Vaughan has taken the rare step of temporarily scrapping residential development charges, in a bid to push long‑approved projects into the ground and shore up housing supply in one of the Greater Toronto Area (GTA)’s fastest‑growing markets.
Under a policy ratified by council, Vaughan reduced development charges on eligible residential projects to zero. The exemption applies to projects that started construction between February 25, 2026, and October 31, 2027.
The move followed Mayoral Direction 1‑2026 from mayor Steven Del Duca and built on earlier cuts in November 2024, when Vaughan reduced some of the highest development fees in the region from roughly $94,466 to $50,193 for a low‑rise unit.
A rare municipal move on development fees
Del Duca casts the decision as an attempt to restart projects that stalled amid higher borrowing costs and weaker pre‑sales.
“In times of economic uncertainty, strong local leadership means securing our future and creating the conditions for growth,” he said.
“It’s about accelerating housing supply, supporting affordability and sending a clear signal that Vaughan is prepared to lead in tackling the housing crisis with immediate action.”
“Home ownership is increasingly out of reach for our residents, in particular for young families, and we need every level of government to help tackle this challenge,” Del Duca said.
“I am hopeful that a combination of these changes – at the municipal level and beyond – will give a boost to the housing sector, so people can get back to work and more homes of every type can be built.
The city said the policy also intends to support about 50,000 Vaughan residents working in construction.
Industry sees signal for other GTA municipalities
The Toronto Regional Real Estate Board said Vaughan’s decision is the kind of “bold municipal leadership” needed to address Ontario’s housing‑supply crunch.
TRREB said development charges are a major cost embedded in new‑home prices and that Vaughan’s exemption could trim up to $50,193 from city fees on a new low‑rise home during the window, down from nearly $94,466 just over a year earlier.
TRREB also urged other municipalities across York Region, the broader GTA and Simcoe County to follow suit by cutting fees, streamlining approvals and removing barriers that delay new housing.
“Every level of government must do its part if we want more homes built faster and at lower cost,” TRREB president Daniel Steinfeld said.
Questions remain on how savings reach buyers
For mortgage professionals and lenders, Vaughan’s move sits within a wider debate over how far municipal fees shape pricing and pro‑forma risk.
In Priced Out: The High Cost of Development Charges, the Toronto Region Board of Trade said fees has climbed 176% across the GTA since 2011, with tens or even hundreds of thousands of dollars in charges now embedded in the price of a single detached home.
The Canada Mortgage and Housing Corporation (CMHC) found development charges could represent 8 to 16% of a new condo price in Ontario alone, and up to 9% of the cost of a single-detached home in Toronto. CMHC also pointed to high fees and red tape as one factor weighing on housing starts.
Still, economists have long debated how much of any fee reduction actually flow through to final purchasers in a constrained market.
For now, Vaughan’s measure mainly shows that city hall is prepared to absorb near‑term fiscal pressure to keep projects moving.
If the policy succeeds in nudging delayed sites into construction, it could offer one of the clearest tests yet of whether aggressive cuts to development charges meaningfully unlock supply – and how quickly borrowers and homebuyers in the GTA feel the difference.
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