Builders didn't show up yesterday as London's board of control urged drastic measures that will take a big bite out of their wallets and may drive up costs of new homes.

Also absent were developers who for years fought increases to fees for new homes, offices and stores.

And after years advocating growth they said was crucial to the city, controllers agreed to hike the fees that will make new homes more costly and new offices and stores subject to the highest development charges in Ontario.

The about-face came not because champions of growth changed their minds or were persuaded by those who argue the city has grown too fast in too many directions and at too high a cost to taxpayers.

Instead, growth proponents have been convinced by city staff that low charges threaten the viability of a fund that plays a key role in fostering development.

"(The fee increase) is a good piece of work. It's needed," Controller Gord Hume said.

The consensus on higher charges comes as council prepares for a major battle ahead, a fight over how the city will grow and who will pay for it.

Those who want to slow development say taxpayers will be fleeced unless council learns to say no to development the city can't afford.

That approach is opposed by some on council and the development industry, who argue such changes would shut the door on growth and doom taxpayers to ever-rising costs.

But despite the battle lines, there's agreement the urban works reserve fund is in trouble.

The fund was supposed to make it cheaper for developers to borrow money to connect subdivisions and plazas to roads and services.

Developers who'd otherwise have to wait until lots were sold to pay back bank loans can pay sooner with money taken from the reserve fund when the infrastructure work is done. The quicker payback lowers interest charges.

But payments by builders have been much less than claims by developers, the gap growing to about $22 million. As a result, developers making claims now wait three years to get paid, a delay projected to double in two years.

City staff warned of the growing problem in 2005, but council chose not to act. Later, a panel of experts chosen by the city and developers found longer waits had given a banker second thoughts about lending cash for development.

By the end of last year, developers and homeowners had agreed to big rate increases.

Yesterday, controllers followed suit, even though one, Bud Polhill, voiced concern.

An owner of an independent garage, Polhill said new charges may stop owners of small business from expanding their operations.

"It will cost them more in development fees than in construction," said Polhill, who still voted for the increases.

If council approves the higher fees, builders of offices and stores will pay $171.50 a square metre, an increase of $26.50 and a tripling of the rate charged four or five years ago.

The residential hike would add $1,728 for each house, an add-on that may be passed on to homebuyers.

Higher fees alone won't fix the problems with the reserve fund, whose future will be debated at a council meeting today. The meeting was set up so the five new members of council can hear first-hand from the independent panel.

Last year, the panel found London was the only city in Canada with a revolving fund for development that takes decisions about growth out of the hands of local politicians and puts them into the hands of developers.

The panel concluded London should scrap the fund, but may have to settle for reforming it since it enjoys support from developers.