Winnipeg's controversial impact fee, better known as a growth or development fee, takes effect on Monday, which means developers will pay more to build new homes in certain areas of the city.
Mike Moore, president of the Manitoba Home Builders' Assoc., has led the fight against the fee, saying it adds up to about $9,500 more in costs for a new home.
As Monday's deadline loomed, there was a rush to submit building permits before the fee came into effect, he said.
"I guess we've hit our own personal mayday, haven't we? I think that from a consumer's standpoint, they're justifiably upset at having to pay another new fee," said Moore, who is part of a group that has launched a legal challenge against the fees.
City council voted in October to charge $500 for every 100 square feet of new residential space in selected areas at the fringes of the city, starting on May 1.
The city's intention is to use the revenue from the new fees to pay for growth-related infrastructure.
The plan also calls for the fees to be applied to industrial, commercial, institutional and office developments in 2018 and to residential infill developments in older and mature neighbourhoods, including downtown, in 2019.
The homebuilders association and the Urban Development Institute, both of which represent the development industry, have filed a notice of application before the Manitoba Court of Queen's Bench to review the city's new fees.
In the notice of application, the development organizations argue the city charter doesn't give the city any jurisdiction over growth fees and "there is no connection between the amount of fee collected and the cost of administering such purported regulatory scheme."
The first court date was Feb. 21, but Moore expects the challenge to take several months to allow affidavits to be filed by both sides in the dispute.