New sub­ur­ban de­vel­op­ment is an in­vest­ment in Cal­gary’s fu­ture

Calgary Sun - - HOMES -

Res­i­den­tial prop­erty taxes in Cal­gary will in­crease by 3.45 per­cent in 2019 and then three per­cent per year from 2020 to 2022.

The in­creases re­flect a shift of some of the over­all prop­erty tax bur­den from com­mer­cial to res­i­den­tial be­cause of de­pressed prop­erty val­ues in the down­town core, where the of­fice build­ings are stand­ing about 27 per­cent empty.

The in­creases were ap­proved af­ter a week of de­lib­er­a­tions, which in­cluded hun­dreds of writ­ten sub­mis­sions from the pub­lic and 73 pre­sen­ta­tions from the pub­lic at the Nov. 26 pub­lic hear­ing at city coun­cil.

When the in­creases were an­nounced, it was noted by some that a lot of the in­creases were the re­sult of coun­cil giv­ing the ap­proval to 14 new com­mu­ni­ties to be de­vel­oped over the next 10 to 20 years.

Coun­cil gave the go-ahead for the com­mu­ni­ties last sum­mer, says Guy Hunt­ing­ford, CEO of BILD Cal­gary Re­gion, which rep­re­sents the home build­ing and land de­vel­op­ment in­dus­tries in the city and area.

“In July of this year, Cal­gary City Coun­cil amended and then ap­proved a new com­mu­nity growth strat­egy, ef­fec­tively mov­ing for­ward on 14 new com­mu­ni­ties. The cap­i­tal in­vest­ment into new in­fra­struc­ture for these com­mu­ni­ties was iden­ti­fied as a shared re­spon­si­bil­ity be­tween the build­ing in­dus­try and the City, with Coun­cil also direct­ing ad­min­is­tra­tion to en­sure de­vel­op­ers pick up their pro­por­tion­ate share of the cost through the off­site levy by­law,” says Hunt­ing­ford.

The off­site levy by­law, for­mal­ized in Jan­uary 2016, saw de­vel­op­ers pick up the cost of in­fra­struc­ture re­quired to con­nect city ser­vices — wa­ter, waste wa­ter, etc. to in­fra­struc­ture in­side new com­mu­ni­ties. The off­site levy costs were al­ways a thorn in the side of Mayor Na­heed Nen­shi, but once the levy was ne­go­ti­ated by the in­dus­try and the city, the thorn was re­moved.

To sug­gest the ap­proval of the 14 new com­mu­ni­ties was a ma­jor part of the res­i­den­tial prop­erty tax in­crease is in­cor­rect, says Hunt­ing­ford.

“We feel this is an in­ac­cu­rate state­ment,” he says. “The prop­erty tax in­crease to fa­cil­i­tate the City’s con­tri­bu­tion to the new com­mu­ni­ties was iden­ti­fied as 0.75 per­cent for 2019, which ac­counts for just over one-fifth of the in­crease. Math­e­mat­i­cally, this is far from be­ing a ma­jor cause of next year’s rate in­crease.”

When the go­ing gets tough, the tough keep go­ing.

“In this eco­nomic cli­mate and po­lit­i­cal land­scape, Cal­gary is en­dur­ing an un­em­ploy­ment rate of 8.2 per­cent while a down­town va­cancy rate of 27.7 per­cent con­tin­ues to drag our city’s rep­u­ta­tion as a hub of in­no­va­tion and cen­tre of com­merce to un­fa­mil­iar depths,” he says. “Since our Fed­eral Courts have ruled against the Trans Moun­tain pipe­line ex­pan­sion, the pro­vin­cial econ­omy has lost over $6 bil­lion and count­less jobs — all while tax­a­tion rates from all three lev­els of gov­ern­ment con­tinue to climb.

“BILD Cal­gary Re­gion’s vi­sion is to cre­ate the most liv­able com­mu­ni­ties in the world and de­spite the hur­dles iden­ti­fied above, our mem­bers and our in­dus­try be­lieve this is still pos­si­ble when Cal­gary in­vests in it­self.”

The new homes and land de­vel­op­ment in­dus­tries are ma­jor con­trib­u­tors to Cal­gary’s econ­omy.

“In the Cal­gary Metropoli­tan Area, the build­ing in­dus­try ac­counts for 12.1 per­cent of all busi­ness, which is sec­ond only to the pro­fes­sional, sci­en­tific and tech ser­vice sec­tor,” says Hunt­ing­ford. “Ac­cord­ing to Statis­tics Canada and the Canada Mort­gage and Hous­ing Cor­po­ra­tion, our lo­cal in­dus­try ranked fifth in the coun­try with a value of $651 mil­lion in res­i­den­tial build­ing per­mits and third over­all when it came to non-res­i­den­tial con­struc­tion per­mits with a $952-mil­lion eval­u­a­tion.

“These per­mits were then taken di­rectly back to Cal­gar­i­ans as they re­sulted in $3.2 bil­lion in wages for 46,935 jobs. All in, that’s a $7.2-bil­lion in­vest­ment value for Cal­gar­i­ans and their fam­i­lies.”

The cost of sub­ur­ban growth isn’t a tax in­crease, it’s an in­vest­ment, says Hunt­ing­ford.

“It’s jobs, it’s choice, it’s af­ford­abil­ity and it’s fi­nan­cial se­cu­rity,” he says. “The ap­proval of these 14 new com­mu­ni­ties is more than a wa­ter­shed mo­ment for the build­ing in­dus­try, it’s a boon for our city of to­day and to­mor­row. It rep­re­sents a ro­bust and care­fully con­sid­ered growth strat­egy, which al­lows growth to pay for it­self. Build­ing com­plete, smart com­mu­ni­ties means build­ing ameni­ties as much as a home.

“In our eyes, the terms amenity and in­fra­struc­ture go be­yond pipes, roads and power lines to in­clude civic in­vest­ment and job cre­ation. With these bud­get dis­cus­sions, our in­dus­try and our City have an op­por­tu­nity to come to­gether and in­vest in Cal­gary and Cal­gar­i­ans.”

“Cal­gary is in a pe­riod of eco­nomic re­cov­ery and though chal­lenges re­main, we con­tinue to fo­cus on im­prov­ing qual­ity of life for Cal­gar­i­ans for the next four years and be­yond,” said Carla Male, chief fi­nan­cial of­fi­cer at the City when the bud­get was ap­proved. “This bud­get is fo­cused on finding ef­fi­cien­cies within our ex­ist­ing means, and pri­or­i­tiz­ing what the pub­lic and Coun­cil have told us is im­por­tant to them, to make some ad­di­tional in­vest­ments that de­liver on these pri­or­i­ties and en­sure high-qual­ity ser­vice to Cal­gar­i­ans.”

The ad­di­tion of 14 new com­mu­ni­ties is an in­vest­ment on sev­eral lev­els.

Hav­ing suf­fi­cient land ser­viced and ready for new homes will keep Cal­gary’s prices from sky­rock­et­ing out of control, as has hap­pened in the Greater Toronto and Van­cou­ver Ar­eas, each of which suf­fers from a lack of new land sup­ply.

And, all those new homes in the new com­mu­ni­ties will con­trib­ute to city cof­fers by way of prop­erty taxes.

At a rate to be de­ter­mined.

“In the Cal­gary Metropoli­tan Area, the build­ing in­dus­try ac­counts for 12.1 per­cent of all busi­ness, which is sec­ond only to the pro­fes­sional, sci­en­tific and tech ser­vice sec­tor.” Guy Hunt­ing­ford, CEO of BILD Cal­gary Re­gion

MYKE THOMAS [email protected]­media.com 403•250•4324 @sun­mykethomas

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