Understanding Developer Levies
A new off-site levy bylaw is hitting the news. What’s it all about?
There are only a few places that The City of Calgary can turn to for revenue – property tax from residents and businesses, developer levies and fees in new communities and developed communities, monthly utility payments from property owners, user fees, and federal and provincial government grants.
But what are levies in particular? They are fees paid by developers to cover a proportionate cost of necessary infrastructure associated with building, determined in an “off-site levy” bylaw and laid out in a “Master Development Agreement” (formerly the Standard Development Agreement).
Here, Kathy Dietrich from Build Calgary explains more:
Until very recently, it was only the Greenfield developers in brand new communities that had an agreement with The City as to how much, exactly, the levy would be per hectare of land developed. Any redevelopment costs in developed areas was assessed on a one-off basis, and was highly unpredictable and difficult to discern before building began – hardly a good business model and not a reliable revenue stream.
The agreement between The City and developers was recently updated and a new off-site levy bylaw was instituted February 1, 2016. The major changes include:
- A levy has been introduced for redevelopment in established areas
- A cap on levies for redevelopment when building multi-family units of certain densities