Off-site levies - not as simple as they may seem
Developers pay for the cost of infrastructure that is internal or 'on-site' to a new community – things like your neighbourhood streets and sidewalks, street signs and bus stops. But when a new community is built, residents will also be relying on infrastructure outside or 'off-site' of that new community.
For example, there are definitely going to be more drivers on major road systems, as citizens in new communities tackle their daily commute. And what about drinking water? We all want clean clear drinking water, but there isn't a water treatment plant in every community. There are water treatment plants 'off-site' that will continue to provide the new community with the great drinking water Calgary is known for.
What do home buyers pay?
The increase in the rates equates to about 1% of the cost of a new home. As of October 2015, according to CMHC, the median price of a new single detached home in Calgary is $660,000. Developers pay the levies and will determine how to absorb the new increase in the levies, which could include passing on the costs to homebuyers.
Why do citizens contribute to the cost of infrastructure through the cost of a new home?
The City of Calgary charges developers levies that help The City pay for the cost of the 'off-site' infrastructure that The City builds on behalf of citizens. The levies help pay for the capital cost of infrastructure.
This 'off-site' infrastructure is critical to ensuring Calgarians continue to live in complete communities with the services they need.
The City has a few options to pay for the cost of off-site growth infrastructure: through City of Calgary property taxes (which are mostly used for operating not capital costs), utility charges, grants/provincial funding and off-site levies.
And, very importantly, off-site levies are one of the tools The City uses to help attain financial sustainability.
Why do we need a "new" off-site levy bylaw?
The City worked closely and collaboratively with a variety of external stakeholders from several industries throughout 2015 on the new off-site levy bylaw for many reasons including:
- We need to make sure citizens have access to water and wastewater treatment, major roads and bridges, fire halls and other types of off-site infrastructure that citizens need no matter where they live.
- Calgary’s population increased by approximately 100,000 between 2012-14, significantly increasing the demand on our current infrastructure.
- The cost of building new infrastructure also increased during that time.
- The City of Calgary has an obligation to all citizens to ensure that our bylaws are regularly revisited.
Why is this important now?
We're thrilled that The City and the development industry are working so closely together to ensure costs are being covered fairly for all stakeholders – developers, The City and its citizens. This off-site infrastructure benefits all Calgarians and is critical to helping manage the growth our city has seen in the past and is anticipating in the future.
For more complete information on the off-site levy bylaw, please see Build Calgary
Looking for more information on The City's finances? Visit our financial overview for the big picture.