The City brought in the off-site levy last year. It is just another fee, similar to the asphalt degradation, storm water frontage, subdivision, sidewalk repair, and other fees that have been created or grown over the years.
I haven't yet met a builder who feels this fee is legitimate. The fee is calculated based on the additional units being built, generally the minimum fee is about $2000 and it can go up to a massive number for a larger project. For a big project the hit to the builder cashflow is large, because the money is paid up font, long in advance of sewer use by the end buyer. If this fee is needed, I'd at least like to see it attached to the transaction, rather than be paid a year in advance of sewer use. The City cares little about these issues of builder viability. For the City, getting the money a year after the permitting phase would make no difference to its cashflow, but the builder, the fee takes money that is needed to build the project and diverts it into a loss that is immediate, and months before a sale is possible.
I think the fee should not be charged to the builder at all because it is for downstream infrastructure to be used by people who live in houses, not those who build them. I think the fee should be linked to the property taxes of new buyers, so they can contribute to the upkeep of infrastructure directly, and this could be financed cheaply over 5-10 years and not impact affordability. This would act as an incentive to build more, rather than a disincentive to build. The City doesn't understand how incentives stimulate business, because the City staff collect pay regardless of the value they deliver (it is possible City staff deliver more value than they deliver, and equally likely the Staff under deliver value but are paid well in salary and benefits). The City tends to feel that everyone is compensated in the manner it is (income tax and arbitrary fees without relation to value), because it is detached from the reality of business ownership.
In dealing with growing fees, the City believes that it is acceptable to increase any fee to the builder because it can be recouped in the sale of new homes. This is untrue of course, because houses are sold into a market system, and some years houses go down in value rather than up. To prove that the fee is absorbed into the selling price, you'd have to demonstrate house price increases by the amount of annual fee increase. Of course this is impossible, and over the past few years house prices have dropped, while fees have gone up and been created.
If I'm to be the victim of chronic fee increases, I'd like to be the beneficiary of fee discounts if the City underperforms. For example, the City should promise to deliver a permit to me in 30 days, and if it cannot do so it should discount the fee. This is never going to happen. I can't see the City wanting to take on accountability for time delay because its staff are not incentivized to be productive. Yet the City imposes arbitrary punishments on builders if it feels the builder damages the City through lateness, or say misses an inspection appointment, or has a permit expire and needs it reinstated. There is a very asymmetric relationship between the fee taker, and the fee payer that could be rebalanced in City development.
Welome to inner city building, your fee is ready!