Hamilton to eliminate residential development charges for three years as governments target more than 31,000 new homes
HAMILTON — The governments of Ontario and Canada are committing up to $572 million toward housing-enabling infrastructure in Hamilton as the city moves to eliminate residential development charges for three years, a measure officials say could substantially reduce construction costs and unlock tens of thousands of new homes.
The funding, announced August 26, will flow through the Development Charge Reduction Program (DCRP) and support major road, water and wastewater projects across Hamilton. In exchange, the city has committed to eliminating development charges on all residential development from March 30, 2026, through March 31, 2029, subject to approval by Hamilton City Council.
“We’re making historic investments in Hamilton to lower costs for families, keep workers on the job and get more homes built faster,” said Premier Doug Ford. “Today’s investment will support new transportation and housing infrastructure across the city, enabling the construction of tens of thousands of new homes. Congratulations to Mayor Horwath and Hamilton City Council for demonstrating incredible leadership and working with us to bring the dream of home ownership within reach for Hamilton families.”
Development Charge Removal Could Cut Hamilton Homebuilding Costs
Ontario estimates eliminating development charges during the three-year period could reduce the cost of constructing a new home by as much as $100,442.
Combined with expanded HST relief of up to $130,000 on eligible new homes, the governments say the measures could produce total potential savings exceeding $230,000 on a qualifying new home.
“Across Ontario, there is a need for critical infrastructure and housing of all types to support our fast-growing communities,” said Rob Flack, Minister of Municipal Affairs and Housing. “That is why our government continues to deliver programs like the Development Charge Reduction Program alongside our federal partners, which helps provide municipalities like Hamilton with the funding they need to ensure their city remains a desirable place to live, work and raise a family.”
The initiative follows a March agreement between Ontario and the federal government establishing a cost-matched structure providing a combined $8.8 billion over 10 years for infrastructure investments in the province. Canada’s contribution is expected to flow through the Build Communities Strong Fund.
“Together, we’re building Ontario and Canada strong,” said the Honourable Wayne Long, Secretary of State (Canada Revenue Agency and Financial Institutions). “By partnering with Ontario, the federal government is helping speed up housing construction by lowering upfront costs and investing in housing-enabling infrastructure projects — building strong, resilient communities that boost housing supply and drive economic opportunities.”
Hamilton Projects Target Roads, Water and Wastewater Capacity
Hamilton estimates the combination of lower development costs and new infrastructure investment could help unlock more than 31,000 homes, expanding supply for both buyers and renters.
Projects identified for funding include widening and reconstructing Barton Street between Fruitland Road and Fifty Road, rebuilding Lewis Road between Highway 8 and Barton Street, and widening sections of Rymal Road.
The plan also includes widening and reconstructing Garner Road in Ancaster, expanding the Woodward water and wastewater treatment plant and increasing capacity at the Greenhill Water Pumping Station.
“This is a historic investment in Hamilton’s future and one I have worked hard as Mayor to make happen. It represents the single largest investment in roads, water and wastewater infrastructure in our city’s history, and I welcome the support of our provincial and federal partners,” said Mayor Andrea Horwath. “We know Hamilton needs more housing. That means creating the conditions to get more homes built, support local construction and get people back to work, while making housing more affordable for Hamiltonians. By eliminating residential development charges for three years and investing in the infrastructure our growing communities need, we can get shovels in the ground, increase housing supply and reduce costs for people looking to call Hamilton home.”
Builders Say Lower Charges Could Improve Project Viability
The housing industry has argued that development charges have become an increasingly significant upfront expense for new projects.
“This is exactly the kind of action Ontario’s housing market needs. Development charges have become one of the largest upfront costs of building a new home and reducing them while investing directly in the infrastructure needed to support growth is a much more sustainable approach. Hamilton’s participation in the Development Charge Reduction Program will make a meaningful difference to project viability, housing affordability and the ability to get more shovels in the ground. We commend the governments of Ontario and Canada, and the City of Hamilton, for working together on a solution that lowers the cost of building while ensuring communities have the infrastructure they need to grow.”
– Scott Andison
CEO, Ontario Home Builders’ Association
The program is part of the broader Canada—Ontario Partnership to Build and prioritizes municipalities that reduce residential development charges by at least 30 to 50 per cent, or more, and maintain those reductions for a minimum of three years.
Federal funding remains conditional on the signing of the Canada-Ontario Build Communities Strong Fund bilateral agreement and project approvals. Hamilton must also enter into a transfer payment agreement with Ontario and meet program requirements. Municipalities participating in the DCRP are required to contribute at least 10 per cent of project costs.
With more than 200 of Ontario’s 444 municipalities currently levying development charges, the Hamilton agreement could become a significant test of whether reducing those fees, paired with large-scale infrastructure investment, can accelerate construction while translating lower development costs into more affordable housing.