14 new communities for Calgary
Planning for projected population growth.
Calgary City Council recently voted overwhelmingly in favour of developing 14 new Greenfield communities. That certainly raised a few eyebrows and a few questions. Some feel the communities should be held back until we build up population in our established neighbourhoods, while others think the outward growth is essential.
Who decides when it’s time to add residential housing supply in Calgary?
The City does – with guidance from our Municipal Development Plan (MDP), in response to population growth reported in the Calgary Census 2018, and informed by the Suburban Residential Growth Report. It takes years to come to a decision like the one we saw in council on July 30th, 2018.
The City’s Planning and Development Department continually analyzes growth expectations. Once they know the projected population increase in a given period, it’s a complicated process to determine the land needed for the expected demand for housing. They carefully examine supply, demand, infrastructure, location, and consumer preference.
Several parts of the urban growth process run concurrently, such as planning policy, subdivision approvals, budgeting processes and utility construction scheduling. All of this provides a shared view of the future for The City and the development industry. You can see it all in the latest draft of the Suburban Residential Growth Report.
The report looks well into our future and makes actionable predictions for the next five years. Meanwhile, The City also has policy to maintain a certain level of land supply at any given time. When this enormous amount of information comes together, along with proposals from developers, the final decisions are made.
The 14 new communities are contained in the starred areas. The eight stars indicate an Area Structure Plan (ASP) is in place; some ASPs have room for more than one community.
Sound like a lot of moving parts? It is. Do we need 14 communities? Here’s a look at some facts to consider as you make up your mind.
- 15,340: Average number of new people per year for the next 5 years
- 1,323,000: Total population in 2022
- 32,000: Number of new housing units needed by 2022
Suburbs vs established neighbourhood growth
Calgary has been growing “in” relatively significantly over the years, as guided by the MDP.
- 1,668: highest number of new residents in any community over past year
- Which community? At the centre city, in Beltline
- 25,000: Approximate number of current residents in Beltline
We can see that older neighbourhoods are involved in growth alongside the newer suburbs. The growth is moving in line with The City’s idealized, balanced growth in old and new communities.
Still, new communities absorb around 80% of our population growth each year. It will be challenging to meet the MDP goals of accommodating 33% of new residents in established and developed communities over the next 20 or so years. While the market is moving in that direction more than ever before in Calgary, we’re not there.
“The City, land development and house-building industries attempt to be as responsive as possible to changes in the marketplace. The amount of housing constructed, the location of development activity and the types of housing will vary with changing rates of population growth, consumer preferences, interest rates, house prices, competition in the marketplace and expectations for the future.”
- Draft Suburban Residential Growth Report, 2018-2022
Who pays for what?
As reported in The Star Calgary, “Councillor Ward Sutherland said the city is living up to its commitment to ensure suburban developments pay for themselves in the long run. Nenshi said the introduction of the off-site levy in 2016 ensures that capital costs associated with growth are largely carried by developers.”
Capital investment in infrastructure is a shared responsibility between industry and the City.
- Developers currently pay, on average, levies of $442,000 per hectare to The City for all growth-related infrastructure expenses inside new communities.
- Developers donate land to The City for parks and utilities.
- Council has plans to consult with stakeholders about the Off-site Levy Bylaw and report back by the end of this year. That will inform any changes to levy fees to make sure developers pick up their proportionate share of infrastructure costs.
- Calgarians pay user fees to supplement the cost of things like recreation centres, public transit, water and recycling.
"We want to be open for business. We want to support business. Previously, we were too risk adverse and we need to challenge ourselves (and) take that risk.”
- Councillor Ward Sutherland, defending the increased number of communities
Will property taxes increase?
As approved by City Council earlier this year, the average property taxes in Calgary will go up by .75% in 2019. That’s to help cover The City’s initial outlay for infrastructure to accommodate growth. Of course, that doesn’t mean every house will pay more taxes. To understand how your taxes are calculated, see our video, Property Tax 101.
Quoted in The Star Calgary, Nenshi said about the tax increase:
“That’s a decision that we made with eyes wide open ... because we think growth is something that benefits everyone in the city.”
So, why would we develop new communities if it costs us money? There are a few reasons, but an increased property tax base is one of them. In the short term, it costs all Calgarians more property tax, but it also means more homes and property taxes down the road to support City services that we all enjoy.
What would happen if we didn’t build new communities with diverse housing options? A few examples:
- A restriction on growth can cause a hot market, as we’ve seen in Vancouver and Toronto, resulting in unaffordable housing for many.
- A spike in bedroom communities’ population, such as Okotoks and Airdrie. Residents may live there; however they often work and play in Calgary. We support their use of Calgary roads and infrastructure entirely, receiving none of their property taxes.
- Airdrie, Chestermere, Cochrane and Okotoks are among the top 10 fastest-growing cities in our country, taking spots 1,2, 5 and 9. Many of those would like to buy in Calgary and pay taxes here, but homes cost less in those municipalities. Housing affordability and diversity within Calgary is essential to maintain our economic health.
How much land do we need?
When we don’t have enough land designated for new homes, we can get caught in a crunch. If population grows faster than housing supply, homes are scarce, and prices go up. The goal of industry and The City is to improve housing affordability.
View our video, 4 Factors in Housing Affordability. Learn about land supply, levies, and the difference between affordable housing, and housing affordability.
Based on the housing absorption over the past five years along with the forecasted absorption for the next five, The City maintains a specified inventory to avoid a housing crunch in the future. The supply is measured in years, not area:
- Serviced and subdivided land: 1.6 to 2.6 years
- Serviced, with land use in place: 4 to 5 years
- Serviced, with or without land use in place: 5 to 6 years
- Approved land use in place: 8 to 9 years
- Planned land with Area Structure Plan: 29 to 31 years
At any given time, it’s typical for Calgary to have around 40 new communities at various stages of development. The 14 approved new communities bring us up to that range.
Same old, same old?
Not at all. In recent years, the suburbs have become nodes of “complete communities” that offer offices, mixed-use buildings, employment opportunities, and diverse housing styles and modes of transportation. Density in newer communities is purposefully higher than in older communities for sustainable infrastructure, healthy living, and stronger economies.
In The Star Calgary article, Mayor Nenshi said he felt comfortable with the business case behind most of the proposals, and they largely represent a different approach to suburban development than the city has seen in the past.
“But what we’ve seen here is really innovative thinking: (employment centres) closer to home; you have street grids that are easier to serve by public transit and lead to less congestion; there’s far fewer cul-de-sacs; and every one of these neighbourhoods has a real mix of housing types and the income and age levels at which they attract people.”
- Mayor Nenshi, as quoted in The Calgary Herald
Our 14 new communities were deemed necessary by the majority of our City Councillors. We may have conflicting opinions about that. However, more facts always make for better conversation. If you’d like to engage more in the growth of your city and community, check out our infographic, “10 ways to have your say”.
On a positive note for all of us, in a BILD Calgary Region blog post, CEO Guy Huntingford talks about how the approval of these communities indicates economic growth:
“Calgary City Council recognized the continued growth curve for the City, as well as the economic stimulus that the building industry provides, and approved 14 new communities that will provide future housing supply and enhanced choice and affordability for consumers.”
It may take years before you see any of the new houses pop up – the building cycle is long. To understand what it takes to go from an ASP to a home, check out our publication, “From Dirt to Door.” You may be surprised.