It’s a question cities throughout Western Canada have been grappling with for decades: does new development pay for itself ? Does the city spend more money servicing new neighbourhoods than it collects from the developers who buy the lots and build houses?
A new report released by Saskatoon civic administrators that says not all costs of new suburban development are paid for by the service rates charged to developers is stirring up the debate.
“Most of the direct services – most of the capital costs to build a neighbourhood – are included in the overall developers’ fees, but there are a number things that are not covered like leisure centres and fire halls and other things,” said Randy Grauer, Saskatoon’s acting city manager.
Some cities, such as Calgary, have decided to dramatically increase development levies. Calgary Mayor Naheed Nenshi says it’s an attempt to recoup the real cost of growth.
Some planners in Saskatoon say the same model should be considered here as the city’s population continues to grow at a rapid pace.
“The city has been encouraging developers to go develop on the outskirts, and now we are paying for it because we cannot afford to maintain the infrastructure,” said Avi Akkerman, a professor of regional and urban planning at the University of Saskatchewan.
“Everything that is associated with it is unsustainable.”
Of course developers disagree
“The new areas are paying a large portion of the tax burden,” said local developer Ron Olson, a former president the Canadian Home Builders Association. “The new areas are subsidizing the older neighbourhoods.”
Olson said city planners have to be careful not to “drink the Kool-Aid on this densification.” Restricting development on the outer edges of the city will only force young families to move outside the city – to places like Warman and Martensville – where they can find more housing choices.
“Calgary is a prime example of what we are talking about. The mayor has decided that new growth and suburban growth is a bad thing, and that kind of policy is regressive. You will have a bunch of satellites around Calgary, and those satellites are because young people want to live in single family homes,” Olson said.
Actually I would challenge Ron Olson’s assertions about Calgary. I would suggest that the Calgary satellite communities have everything to do with house price than a desire to live in single family homes. The farther you are away from Calgary (or Saskatoon), the less access you have to amenities and then less you have to pay for housing.
Of course the other point is that it isn’t about housing, it is about the cities ability to pay for sprawling infrastructure. It’s weird but some still see libertarian values as something that needs to be met, even in the city.