McMaster's proposed student residence as shown to the Design Review Panel in February 2018. Credit: HANDOUT

The City of Hamilton and McMaster University have formally settled McMaster’s appeal of the City’s development charges bylaw as it applies to McMaster’s private-public partnerships to build new for-profit student residences.

The City of Hamilton sought to apply development charges to McMaster’s private partners for the downtown graduate student residence at 10 Bay Street North / 191 King Street West, and was planning to apply DCs at the planned student residence at 1190 Main Street West.

McMaster is turning to private partnerships to build new student residences to increase its ability to house students – especially graduate students who may be offered housing at competing universities – while managing the university’s debt levels.

The Ontario Progressive Conservative government intervened. As part of the government’s 2020 COVID omnibus bills, they amended the Ministry of Training, Colleges, and Universities Act to explicitly exempt private-public partnerships from local taxation.

McMaster is not a Crown agency and was subject to 50% development charges on its student residence buildings and the full transit component of development changes for all projects. Crown agencies, such as Mohawk College, are exempt from municipal taxation.

McMaster University requested the City of Hamilton exempt their private-public partnerships from development charges. Council declined to do so during the 2019 comprehensive update of the Development Charges Bylaw.

Council voted against giving the exemption. Councillor Brad Clark stated, as a question, during the April 2019 meeting “If an individual developer comes in to build student residences then they pay development charges. But if McMaster does it, you are exempt from them, we’re trying to understand how an independent developer can get an exemption through McMaster University to build residences when they cannot do that on their own”.

Last week, the Ontario Land Tribunal (formerly known as the Local Planning Appeal Tribunal) approved the terms of settlement.

In it, the City of Hamilton agrees to add the following clause to Section 25 of the DC Bylaw to exempt post-secondary institutions receiving provincial funding from DCs.

(h) development on land vested in or leased to a university that receives regular and ongoing operating funds from the Government of Ontario for the purposes of post-secondary education, if the development in respect of which development charges would otherwise be payable is intended to be occupied and used by the university. The exemption in this subsection (h) shall only apply as long as sections 6.1 of the Ministry of Training, Colleges and Universities Act, R.S.O. 1990, c. M.19, remains in force and effect.

(i) for greater certainty, the exemption from development charges referred to in subsection (h) applies with respect to land described in that subsection regardless of whether an application referred to in clause 26.2(1)(a) or (b) of the Development Charges Act, 1997, has been made with respect to that land on or before December 8, 2020.

In adding the clauses to the DC Bylaw, the City separately and specifically acknowledges it will appeal to McMaster’s current projects.