CALGARY — A group of home developers are seeking the city’s approval to build 11 new communities on the outer edge of Calgary, but several councillors are concerned with the financial risk.
The Priorities and Finance Committee will review the business plans when it meets on Oct. 19, although city administration has already advised against approval.
In an open letter on the city’s website, Ward 7 Coun. Druh Farrell agrees that growth in Calgary is unsustainable at a time when council has already cut services for existing communities.
Farrell adds that council already approved 14 new communities in 2018 — against expert recommendations to only approve eight based on lower market demand — and says that approval flooded the Calgary market with a near-record total of 41 new and developing communities.
“Council’s decision included subsidizing these 14 new communities so that every Calgarian pays a property tax increase of 0.75 per cent in 2019 and will see 0.5 per cent increase per year to water utility rates from 2019-2022. The total 2018 tax increase to subsidize the 41 communities was 2.15 per cent,” said Farrell.
“A glut of supply and reduced market demand means that houses are not being sold quick enough in new communities, which means slower levy payback. As a result, there was a $57 million hit to the 2019 budget, with more shortfalls expected in the coming years.”
Council has already committed almost $500 million in funding to new community growth until 2022. It has also asked for a tax freeze in 2021, but there are further concerns that won’t be possible.
“It is simply an issue of spreading too little butter over too much bread,” said Farrell.
More shortfalls could also mean more cuts to services like the Calgary Fire Department and Calgary Transit.
The Calgary Firefighters Association (CFA) says that its budget has been cut by $30 million over the last several years, including the reduction of five fire trucks in 2019.
“We can’t sit this one out, firefighters are already stretched thin,” read a tweet from the CFA. “We have concerns about adding more communities on the outskirts of #yyc, we are at the breaking point. Seconds matters.”
Developer Trico will bring forward a business case of council to develop two parcels of land as part of their ongoing Belvedere development.
The company notes that more options within Calgary will help ease losses in the housing market. A recent trend has seen some residents move out of the city and to adjacent bedroom communities with more favourable real estate prices.
Monday’s Priorities and Finance Committee meeting will be open for public comments.