The City of Mississauga has announced substantial changes to development charges and other fees in an effort to address a growing housing crisis.[1]
By significantly reducing and deferring these costs, Council aims to catalyze new construction—especially purpose-built rental housing—over the next few years. Below is an overview of the City’s plan, followed by considerations that buyers, sellers, and developers should keep in mind from a legal standpoint.
Context and Background
On January 29, 2025, Mississauga Mayor Carolyn Parrish introduced a motion proposing immediate financial incentives to spur residential development. This measure arrives on the heels of markedly low home sales in 2024, with new high-rise sales in the region dropping by 95 per cent. The motion’s primary objective is to break this stalemate and encourage developers to pull building permits before November 13, 2026.
According to City data, the average detached home in Mississauga now sells for around $1.4 million, while an average condo comes in at about $600,000. Rental prices, similarly, have climbed to over $2,500 per month for a one-bedroom unit and $3,000 for a two-bedroom. These costs highlight the urgency behind Council’s decision.
Key Incentives: Development Charge Reductions and Deferrals
Under the motion, Mississauga will cut its municipal development charges on new residential units by 50 per cent and, in certain cases, by 100 per cent for family-sized (three-bedroom) units in purpose-built rental apartments. This means that a typical development charge of $38,316 for a condo unit could be reduced to $19,158, or even fully waived for qualifying family-sized rental units.
The motion also defers payment of City residential DCs until occupancy. Instead of paying these charges up-front at the time of acquiring building permits, developers will have the flexibility to address them when units are ready for occupancy—a potentially significant financial reprieve for construction projects grappling with high carrying costs.
Additional Support from Other Government Bodies
Although Mississauga has taken the lead, the Region of Peel has been asked to match the City’s DC incentives. The motion further calls on the Region to establish a new multi-residential tax subclass that would reduce property taxes by up to 35 per cent for new purpose-built rental housing. If adopted, these measures could substantially decrease both initial and ongoing operating costs for developers.
Notably, the motion directs City staff to seek support from several provincial and federal programs, such as the Ontario Building Faster Fund, the federal Housing Accelerator Fund, and the Canada Housing Infrastructure Fund. These programs can help Mississauga fund the new infrastructure—roads, transit, libraries—needed to accommodate rapid growth without solely relying on municipal development charges.
Balancing Growth with Infrastructure Demands
Municipal development charges traditionally play a critical role in financing infrastructure. When charges are reduced, municipalities are compelled to find alternative funding sources or risk underinvestment in crucial services. According to the City, development charges constitute about 10 per cent of a new condo’s total cost in Mississauga; the remaining 15 per cent (of a 25 per cent total) comes from fees, taxes, and charges levied by other levels of government.
Critics question how Mississauga will fill this shortfall and maintain the level of infrastructure expected by existing and new residents. In turn, municipal officials argue that a “pay-now-or-pay-later” approach is not sustainable when development has stalled. If this short-term incentive effectively re-energizes the local housing market, the resulting boom could generate tax revenue and economic growth to offset any initial deficits.
Looking Ahead
By slashing development charges and deferring payment schedules, Mississauga is effectively placing a bet on stimulating new residential construction in the short term to alleviate its housing crisis. If successful, these measures could provide much-needed momentum in a stalled market and address the acute shortage of rental units, especially larger family accommodations.
Still, these incentives hinge on broader cooperation. The City has explicitly called for provincial and federal support to ensure that the infrastructure demands created by a sudden uptick in construction can be met. For now, the immediate takeaway is that Mississauga is open for business: it wants builders to break ground and buyers to find relief in the form of more affordable homes.
For anyone considering a new development or home purchase, it is prudent to consult with a qualified real estate lawyer who can help navigate the complexities of these incentives, ensure regulatory compliance, and offer guidance on how these municipal changes intersect with existing contracts, purchase agreements, or financing arrangements.
[1] Mississauga taking bold action to make homes more affordable: City plans to significantly reduce development charges and other fees in response to the housing crisis” (29 January 2025), online: City of Mississauga
The author would like to thank Harinder Singh, Student-at-Law, for his assistance with this blog.