Mayor calls for end to sprawl subsidy

About 7000 homes were built in new neighbourhoods in 2012 (File Photo)

Calgary Mayor Naheed Nenshi is making his position on developer subsidies known and says it is one of the important issues of the upcoming election.

Nenshi posted a video outlining his views on his website on Friday and says the subsidies are also a key issue for the future of the city.

“One of the most important issues in this election and indeed one of the important issues for the future of Calgary is the question of how we grow. How’s the city going to grow, what kinds of neighbourhoods are we going to grow in, where are we going to grow and importantly who’s going to pay for it?” said Nenshi.

Mayor Nenshi says for many years more than 100 percent of the growth in the city was in brand new neighbourhoods and the council at the time had decided to artificially subsidize the costs in new communities to the detriment of older neighbourhoods.

“That subsidy has led to nearly $1.5 B in debt to the City of Calgary,” said Nenshi.

That debt has accumulated over the years and ratepayers will have to pay it back.

Nenshi says the current council increased the fees that developers pay for homes in new neighbourhoods in 2011 but Calgarians are still on the hook for about 1 in 5 dollars for infrastructure in new neighborhoods. “That adds up to about $4800 per house. May not sound like a lot but it adds up to about $33 million a year that Calgarians have to cover.”

Right now, about 78 percent of the cost for required infrastructure in new neighborhoods is covered by the developer and the other 22 percent is covered by Calgarians through their utility bills.

That infrastructure includes things like roads, water pipes, sewage pipes, libraries, emergency services and recreational facilities.

Nenshi says he believes the subsidy should be closed. “I believe we should make growth pay for itself and not result in debt that goes on to our children and our grandchildren.”

He says he agrees with the development industry on a few things and says the processes are still cumbersome.

The mayor says he realizes that it is still hard to build in existing communities and council has to do a better job but they also need to work on the economic fundamentals.

Nenshi says he believes we are lucky that the city attracts people and is growing and that a few changes will make sure the city’s growth is sustainable.

The city will negotiate a new agreement with the development industry in 2016 and will be looking at eliminating the subsidy altogether.

There were about 7000 new homes built in new communities in 2012.