Action Needed: Stand Up For Smart Growth
Council is being lobbied by some members of the development industry to approve 11 new communities on the edges of Calgary. This is happening as the City is cutting services for existing communities. Calgarians are being asked to take on new costs and long-term financial risk for communities that do not yet exist. This growth is unsustainable and you have the opportunity to speak up.
When is this happening?
On October 19th, the Priorities and Finance Committee will review 11 new communities. City Administration experts recommend that none of these 11 new communities be approved at this time. They correctly recognize there is already too much new community housing supply and that demand has fallen sharply due to the struggling economy and the COVID-19 pandemic.
Didn’t we just approve a bunch of new communities?
Yes. Council already approved 14 new communities in 2018, despite expert recommendations that we only approve eight based on lower market demand. Mayor Nenshi and I were the only members of council who voted against approving these 14. That approval flooded the 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 saw a property tax increase of 0.75% in 2019 and will see 0.5% increases per year to water utility rates for 2019-2022. The total 2019 tax increase to subsidize the 41 communities was 2.15%.
For 2019-2022, the City has now committed almost $500 million in funding towards new community growth. While most of the City’s financial commitment is supposed to be paid back by developers through levies, this simply is not happening. A glut of supply and reduced market demand means that houses are not being sold quickly 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 coming years.
Approval of the 14 new communities was financially irresponsible. Now, 11 new communities are being put in front of Council for approval during a time when our city is facing one of the greatest economic challenges in generations. We need to do more to maximize existing infrastructure, rather than cut services for existing communities to make room for communities where no one yet lives.
What does this mean for me living in an existing community?
Council asked for a tax freeze for 2021. This, combined with taking on additional costs to subsidize new communities, and to cover budget shortfalls from slower levy payment, will result in significant service cuts. It is simply an issue of spreading too little butter over too much bread.
The Calgary Fire Department and Calgary Transit are two examples of services that could be slashed. As Calgary grows out instead of up, these services become more and more expensive to deliver. In recent years, Council chose to cut these services and future cuts would be even deeper if new communities are approved. For Transit, that could mean further route cancellations or service frequency reductions. For Fire, it could mean slower response times and the closure of existing fire halls. These cuts would hurt quality of life and put public safety at risk.
What’s the big picture?
The City’s Municipal Development Plan (MDP) sets a key 60-year goal of balancing growth 50-50 between new and existing communities. We are already off track and approving even more new communities will mean that goal is near impossible to achieve.
Balanced growth is not just a nice idea. It has real financial implications. Failure to balance growth means we face $16.18 billion in additional capital costs over the next 60 years and additional annual operating costs of $390 million by 2070. Calgarians simply cannot afford this.
What can I do?
While City Administration is recommending against approving 11 more communities, there is no guarantee Council will agree. You have the opportunity to share your concerns about Calgary’s unsustainable growth and encourage Council to get back on track with the MDP. You can speak directly to Committee, either in-person at City Hall or remotely online. You can also write to Committee and have your comments included in the public record. For details on all of those options, and for more information on new community growth in Calgary, visit this link.
The Committee report will be available October 15th. You can review it when it is posted at this link.
I hope you will join me in pushing for smart growth and a sustainable city.
Categories: Blog, Budget, City Finances, Planning & Development