Council recently learned that slower than expected development in Calgary’s new communities is expected to cause an additional $56.9 million shortfall. This is bad news for Calgarians, who can expect tax increases, utility rate increases, and/or service cuts to cover the shortfall.
Here are the highlights:
- Council approved 14 new communities on Calgary’s edges
- This was in addition to 27 developing communities
- Council committed $537 million to these 41 communities
- Housing demand is declining because of the economy
- We have more land than required to meet demand, so new communities will be built slower
- The City must pay to service new communities. Levies collected from development are then supposed to cover the costs to the City as the communities build out
- Slower build out means slower return to the City
- This causes the $56.9m shortfall
Calgary is expanding unsustainably. We must provide services over a larger area, at the same time as we are cutting police, fire, transit, and other City services because of the Downtown tax shift and provincial budget. It is a classic example of less butter spread over more bread
This is frustrating because it was predictable. When Council approved the 14 new communities, I recognized we were providing more supply than market demand could meet. I voted against approving all 14 because I knew this decision would result in financial challenges. Unfortunately, the 14 new communities passed 12-2.
On top of all this, the development industry is pushing for even more communities. As our economy continues to struggle, we should be doing more to maximize the use of existing infrastructure, instead of adding new neighbourhoods on Calgary’s edge that aren’t paying for themselves, and then cutting services in existing communities.
Growth must pay for growth. That is currently not happening in Calgary. Council needs to make smarter growth decisions in the future.
