Sharply higher development charges for residential construction proposed in a new five-year development charges bylaw would have a restrictive effect on home building at the same time as the federal government is trying to stimulate the economy, said Tom Krizsan of the Guelph Wellington Development Association.

It would be like driving a car while pressing on the gas pedal and the brakes at the same time, he told council Monday. “It is no way to drive a car, and it is no way to drive an economy.”

However, a motion by Coun. Karl Wettstein to provide relief for the residential sector was defeated on a 10-2 vote. Coun. Bob Bell was in Wettstein’s corner.

Coun. Leanne Piper said a temporary freeze on development charges for the residential sector would result in a property tax increase exceeding seven per cent to make up for the lost money.

“There may be an argument for support for this sector, but it is not from property taxes,” said Mayor Karen Farbridge.

Even with the current, relatively low residential development charges, council was told, residential starts are way down in Guelph. Statistics Canada reported that the value of residential building permits in Guelph in November was down 67 per cent from November 2007.

However, council was receptive to a plea from the industrial sector for some relief from the new development charges.

It unanimously approved a motion to freeze development charge rates at current levels for industrial development for the next two years, followed by a phasing in of the new charges over the following three years.

Marc Dexter, a representative of a group of industrial developers, said the proposed development charges “could severely impact the city’s ability to attract and retain industrial development.”

He said Guelph now has a “relatively high” tax rate on industrial property, and the new DC bylaw would put Guelph in the position of having “high initial costs and high taxes.”