Here we go again: Calgary developers push for more
New communities undermine city’s growth and climate plans.
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SHAWN SMALL (CITY OF CALGARY): Administration has assessed that none of the business cases should be approved.
COUNCILLOR DIANE COLLEY-URQUHART: No question that members of council were heavily lobbied with emails and phone calls and texts.
JEREMY KLASZUS (HOST): Calgary's next election is coming up fast. It's less than a year away. The homebuilding industry is one of the biggest contributors to municipal campaigns in this city. And as you just heard from Councillor Diane Colley-Urquhart, the development industry is pressuring councillors to approve a new batch of communities on Calgary's outskirts.
There's nothing particularly new about that. What is new is that the housing market has slowed in recent years due to the collapse of oil prices. But developers have still plowed ahead with new communities—and city council has gone along, ignoring the warnings of city administration when council approved 14 new communities in 2018.
And Calgarians paid the price—literally.
They paid with a 0.75% property tax increase last year to cover these new communities. On top of that, the city had a $57-million budget shortfall in 2019 because developer levies weren't keeping up to infrastructure costs of connecting these new communities with the rest of the city. The city is expecting another levy shortfall in 2021. And those costs get passed to you on your utility bill.
It is very possible that the city of Calgary will only see a tiny increase, or maybe even a decline, in our growth.
KLASZUS: Developers now want city council to approve 11 more projects. This is slated to go before council the week of November 2.
We'll get into that—but first, let's take a quick look at what's happening with those 14 communities council approved two years ago. Construction was supposed to be well underway by now, but due to a soft housing-market, housing construction has only begun in two of the 14 communities. This is Matthew Sheldrake, the city's acting manager of growth.
MATTHEW SHELDRAKE: Approximately 100 units have been built or started construction. This is about 0.2% of the total expected buildout in these 14 communities.
KLASZUS: The boom days are over—at least for the foreseeable future.
MAYOR NAHEED NENSHI: For the first time that I've been looking at these numbers, we actually have negative interprovincial migration and negative international migration to Canada as a result of COVID, and so on. So it is very possible that the city of Calgary will only see a tiny increase, or maybe even a decline, in our growth going forward.
KLASZUS: The audio you're going to hear in this episode is from city council’s priorities and finance committee meeting on October 19. That's where developers pitched their cases to council members—and numerous Calgarians urged council to stand up to the industry and say no.
Meanwhile, city admin said, point blank, that it doesn't recommend approving any of these 11 projects right now. In part because there's already more than enough housing supply on the market, especially after council approved the 14 communities in 2018.
New community growth challenges the city’s commitment to minimizing our footprint and reaching the goals of the Climate Resilience Strategy.
KLASZUS: There are 41 communities under development in Calgary right now, including the 14. City admin says it has already committed funding for 12 years worth of single and semi-detached supply, and 18 years of multi-unit supply. In other words, city admin believes it has green-lit enough housing supply to last until 2032 and 2038, respectively.
SMALL: A healthy, competitive market offering choice of housing types and locations around the city already exists in the 27 actively developing and 14 communities, and a further three years of city-funded supply capacity is not required at this time to maintain housing affordability.
KLASZUS: That's Shawn Small, a senior growth management planner with the city. Small cited the findings of a recent CMHC housing assessment report.
SMALL: It indicates—in the Calgary census metropolitan area, completed and unsold units "continue to trend upwards above a critical level in the second quarter of 2020, approaching a historic high that was reached in the first quarter of 2001."
KLASZUS: Admin also highlighted something that city hall ignored in 2018: the city's climate action goals.
SMALL: Adding capacity for new community growth at this time challenges the city's commitment to minimizing our footprint and reaching the goals of the Climate Resilience Strategy, such as reducing our 2005 emissions by 80% by 2050.
KLASZUS: These new communities would be largely car-reliant, putting more cars on the road. So, with all of that in mind, admin gave very clear advice to council.
SMALL: Investments supporting developed areas and the completion of actively developing communities should be prioritized first and second before new growth. In conclusion, at this time, advancing these business cases for development does not align with the MDP CTP policy.
I need to understand why this needs to come before council and be voted on by the elected officials.
KLASZUS: You heard Shawn Small reference the MDP and CTP. He was referencing the Municipal Development Plan and Calgary Transportation Plan, two long-range plans that are supposed to guide Calgary's growth for the next half-century.
Before we go further, I want to address a terminology issue. There's been some controversy about the term "new communities." The 14 in 2018 and the 11 that developers want now. Developers and some city councillors have argued that labelling these as communities is a misnomer—that a bunch of these are in fact completing existing communities.
BRENDAN MCCASHIN (BROOKFIELD RESIDENTIAL): To be clear, Cabana is not a new community. Located in the Glacier Ridge ASP, it will join Qualico's actively developing Ambleton community next door to the west.
MILES BURGOYNE (COLLABOR8 ARCHITECTURE AND DESIGN): Our application is not for a large-scale comprehensively developed subdivision or integrated community. It's for a small parcel adjacent to an existing approved development.
Even the small parcels that are completing other communities need city infrastructure.
KLASZUS: Some of the 11 are actually quite small parcels of land. One, for example, is basically a seniors' complex. But counting communities that haven't been built is tricky because defining a community is basically a marketing effort.
SMALL: Largely, developers control whether they're creating a new community or not. They determine whether they want to market their area as a new community, and then they go through a process at council to get a community name approved.
In this particular case with the 11, administration's best guess at this particular time is there would probably be about three new communities out of the 11. The remainder would be completing areas that have already been opened up.
KLASZUS: The city has taken to calling these applications "business cases" instead of "new communities." But here's an important point: Even the small parcels that are completing other communities need city infrastructure.
For example, Belvedere on the east side of the city near the Trans-Canada Highway is where five of these 11 proposals are located.
SMALL: In Belvedere, there's already more area open for development than the transportation infrastructure can support, and there is no permanent stormwater infrastructure and no certainty on timing of water and sanitary infrastructure.
We believe that the city of Calgary position that there is an oversupply of housing… does not apply in our case.
KLASZUS: Okay, now that we have that terminology stuff out of the way, let's get into it.
On October 19, developers made the cases for why their projects are exceptional.
BURGOYNE: We believe that the City of Calgary position that there is an oversupply of housing on a global basis in Calgary does not apply in our case because we're proposing a unique development in a specific area of the city that we believe is underserved with affordable seniors-focused housing.
BEN MERCER (QUALICO COMMUNITIES): With Crestmont nearing completion, this development is necessary to maintain market continuity in the area.
CATHERINE AGAR (WESTCREEK DEVELOPMENTS): We truly believe this is a self-sustaining sector of compact development in the southeast.
KLASZUS: Although developers were pitching city councillors on these projects, they were also pitching the public too.
At this meeting developers were talking up how their projects would have no incremental operating cost gap.
ARNIE STEFANIUK (GENESIS): This community does not cost the city an additional dime. It will not cause property tax rates to increase.
MERCER: Approval of this no-cost and no-risk business case demonstrates that Calgary is open for business.
AGAR: There is no direct incremental operating cost gap.
MERCER: City operating costs for the business case are zero, meaning there's no incremental operating cost gap.
KLASZUS: Okay, we need to pause it right there. That last speaker was Ben Mercer of Qualico Communities. You heard him and some of the others talking about incremental operating cost gap. Let's look at that more closely.
When we're looking at city budgets there are two kinds of costs: capital and operating. Capital is for stuff that gets built. Libraries, roads, pipes and so on. Operating costs are for keeping everything running: transit hours, fire service, and whatnot.
Now, at this meeting developers were talking up how their projects would have no incremental operating cost gap. But what does that mean? Here's Councillor Druh Farrell questioning Ben Mercer of Qualico.
COUNCILLOR DRUH FARRELL: I'd like you to explain a bit what you mean by no op costs. Thank you.
MERCER: Through the chair to Councillor Farrell, thank you for the question. Maybe to clarify, we didn't mean that there are no operating costs associated with the development.
The way it's phrased in the administration report is that there's no incremental operating cost gap. So that just means that, I guess, all of the services required to operate the development are in place and that they'd be covered by the tax revenue.
Our operating cost ticker sort of starts at the beginning [of construction].
KLASZUS: This came up again later in the meeting.
NENSHI: So Councillor Farrell had this conversation with one of the proponents, and I wasn't particularly satisfied with the answer, and it has to do with how we say there are no operating cost implications.
Because I assume that, when you start to build a neighborhood, before people move in, you've got roads and you've got parks, and presumably those need to be swept and shoveled and mowed, and so our operating cost ticker—even if there's not a fire hall, which is the big operating cost—but our operating cost ticker sort of starts at the beginning.
And for services like police where we may not be adding anybody, we are increasing the area that each police car has to cover.
SMALL: When we were evaluating those operating costs for each business case, what we were looking for is not whether the business case had operating costs, but whether the property tax that was being generated based on their buildout timeline was offsetting what those operating costs would be.
And, again, this is just the direct incremental operating cost and not the total operating cost that the city would be having to spend in these communities.
These 11 business cases would add just short of $23 million to our operating expenditures.
KLASZUS: These costs that aren't covered include things like libraries and bus transit. And so what are the real financial costs if these 11 projects all go ahead?
This is Kathy Davies Murphy, the city's manager of growth funding.
KATHY DAVIES MURPHY: What you asked was, what are the operating expenditures that we would expect. And so in the next budget cycle, 2023 to 2026, these 11 business cases would add just short of $23 million to our operating expenditures, and—
MAYOR NENSHI: 1.5% increase on the property tax, all else being equal…
DAVIES MURPHY: —and while the analysis shows that, if they are the only communities going forward, they would generate property taxes, what we know is that we've already accounted for those increased property taxes, and so there's no net new revenue anticipated early.
MAYOR NENSHI: This is so important, because this is kind of talking about what I said before, which is if you look at these individually, each of them makes sense. But if you look at them collectively and realize that they are all double counting the same amount of property tax revenue—if council were to approve all of them, then we would be looking at $23 million, or a 1.5% tax increase. Did I say that right?
DAVIES MURPHY: Yes, that's correct.
MAYOR NENSHI: Wow.
KLASZUS: And this isn't a one-time shortfall. It would recur annually from 2023 to 2026, according to Davies Murphy. Here's Councillor Evan Woolley.
WOOLLEY: I'm wondering if we can repeat just that early part of that one more time, on the double counting. Because I think I got it—but can I get that really clearly one more time?
NENSHI: I can try. The challenge here is that every single one of these assumes property tax revenue, right? When you saw the business cases, you saw that. However, we do not believe in our supply-and-demand forecast that there's enough demand for every single one of these to achieve every single one of those property tax revenue forecasts, because there are only so many people moving to Calgary and so many houses being bought.
And so Ms. Davies Murphy is suggesting that what you're actually looking at overall is a $23 million operating budget increase without corresponding revenue. Does that make sense?
WOOLLEY: A hundred percent. Thank you.
In the meantime, the city has its annual budget deliberations in November. Councillor Woolley raised this at the meeting and hinted at what's coming.
COUNCILLOR WOOLLEY: Frankly, I'm hearing rumblings of some pretty significant potential cuts to a bunch of infrastructure in existing communities.
Councillor Magliocca is currently mired in scandal over his expense claims.
KLASZUS: Okay enough of all that budget stuff. At this meeting, Mayor Nenshi took umbrage with something a developer had said a few days earlier. Here he's speaking to Ben Mercer of Qualico Communities.
MAYOR NENSHI: Mr. Mercer, I'm going to ask you a difficult question, and I'm sorry to put you on the spot on it, but I was very surprised—very surprised—to see in an article printed on the internet that your company made the assertion that saying no to these projects means Calgary is closed for business.
KLASZUS: Nenshi was referring to a story in Livewire Calgary. Qualico told Livewire that if council followed admin's advice and didn't approve the communities, it would be "a signal that Calgary is closed for business. Not good news given the challenges with the pandemic and other business sectors in Calgary."
MAYOR NENSHI: It's a surprising thing to say, because it implies that you don't believe in the regulatory process and that a city that is open for business would allow anyone to build anything anywhere. I wanted to give you the opportunity to clarify your comments, if you could—and they're not your comments, but they were your company's comments.
MERCER: Ben here. Thanks for that question. I would begin by clarifying that that's certainly not the intent behind those comments, to suggest that we don't respect the regulatory process or that we're not all on the same team here.
Why are we dictating to builders and developers what they can do and what they cannot do?
KLASZUS: All on the same team—and some council members were certainly giving that impression more than others. Here's Councillor Joe Magliocca asking questions of city administration.
COUNCILLOR JOE MAGLIOCCA: So if this is approved, how many jobs would these new communities create, and what kind of jobs would those be? Anyone?
SMALL: So through Your Worship, through administration's evaluation, our opinion is the city doesn't gain in job creation, because the same number of homes are only going to be built across the city. And therefore you might get jobs occurring in different areas of the city if these get approved, but overall you wouldn't gain in jobs, because the amount of demand is only finite and does not change with the approval of these new communities.
COUNCILLOR MAGLIOCCA: I beg to differ. What about landscapers, plumbers, drywallers, etc., or roofers? That creates hundreds and hundreds of jobs. You can't tell me it's not—but anyway.
KLASZUS: As you've probably heard, Councillor Magliocca is currently mired in scandal over his expense claims. The RCMP is looking into it, and council just stripped him of his scheduled deputy mayor duty in February 2021. At this meeting, Councillor Magliocca asked why city hall is interfering with the private sector at all.
The city continues to get bigger and bigger, and the fire department budget has been getting smaller and smaller.
COUNCILLOR MAGLIOCCA: Why are we dictating to builders and developers what they can do and what they cannot do?
They know better the market than you and I and everybody else in the city and administration. They know what they have to sell to make a living. They know how to—they're businessmen. They're businesspeople. They've been there for years and years. They know what kind of product will sell, so why should we handcuff them?
KLASZUS: Later, Magliocca put similar questions to developers. Here he is talking to George Trutina of Truman Homes.
COUNCILLOR MAGLIOCCA: Hey, George. It's Joe. Hey, listen, you're a very smart guy. You've been in this business for a very long time. Would you not know the product better than the administration and what sells and what does not sell?
GEORGE TRUTINA (TRUMAN HOMES): Well, sure I do, but if I don't know—I wouldn't be trying to do what I wanted to do for all these years.
KLASZUS: It went along like this for awhile.
I think Calgarians have come to expect councillors to act as lobbyists for the development industry.
MAGLIOCCA: And so do you agree with me that administration is dictating where you should build, and how you should build, and when you should build?
COUNCILLOR JYOTI GONDEK: Question of privilege, Your Worship.
KLASZUS: That's Councillor Jyoti Gondek jumping in.
COUNCILLOR GONDEK: Question of privilege. I'm wondering if Councillor Magliocca is blatantly trying to say that our administration doesn't know what they're doing. If that's the case, I'd like him to just say so.
MAYOR NENSHI: You know, it's not a question of privilege, but I think it is a fair comment. In any case, back to you, Councillor Magliocca.
COUNCILLOR MAGLIOCCA: Thank you. George, you invest your own money, and you want to make sure that the investment that you make, and you employ hundreds and hundreds of people—you know what you're doing, correct?
TRUTINA: Sometimes I do...
KLASZUS: We're going to hear now from citizens who presented to city councillors on October 19. And one of the more noteworthy presentations was by Matt Osborne of the city firefighters union. Osborne warned that the city was stretching its fire services to the limit.
MATT OSBORNE: Our concern is that the city continues to get bigger and bigger, and the fire department budget has been getting smaller and smaller. We are now, more than ever, at the breaking point…
As these communities develop, the Calgarians who choose to live there must have adequate fire service. It should not be more dangerous to live on the edges of the city.
KLASZUS: Osborne talked about how some trucks are operating with two people when they should have four.
This decision, if approved, will contribute to uncontrolled urban sprawl.
OSBORNE: For example, just last year at this time, there was a fire in the new community of Legacy. The fire hall that was approved to be built in the new community of Walden to cover this new area had been delayed and delayed from being funded and built.
On this day, fire hall 26 was covered with a two-person fire truck with no hose and no water. Since the delay in building the Walden legacy fire hall continues, Shawnessy fire hall 26 has been covering this expanded district.
Speaking to the lieutenant that was responsible on this first arriving truck, he talked about how difficult it was to stand on the sidewalk in front of these houses to try to explain why they, unfortunately, could not start battling this fast-growing fire that was starting to spread to this Calgarian's house—because they don't carry hose and water on this specialty fire truck.
They waited six more minutes before a fire engine with hose, water, and more firefighters arrived which could then work to keep the fire under control. Unfortunately, it had been engulfed, this Calgarian's house.
KLASZUS: We're going to hear now from some of the folks who spoke to council. You'll hear Greg Miller, Sylvia Anderson and then Aida Nciri.
GREG MILLER: I listen to my friends talk, and I'm sad to say, I think Calgarians have come to expect councillors to act as lobbyists for the development industry. While they may expect this, I believe they will no longer accept it.
My generation, and younger generations, want a vibrant inner city, not endless driving in subdivisions on the edge of the city.
SYLVIA ANDERSON: Calgary is presently experiencing the greatest financial crisis it has seen in decades. Our economy has been devastated with the oil crisis, resulting in a significant decline in demand for new housing. Our tax base has been decimated with the loss of downtown business occupancy and the resultant pressure on existing residential taxation.
Communities approved for development in 2018, a decision opposed by your own city administrators, remain undeveloped for tax purposes. This decision, if approved, will contribute to uncontrolled urban sprawl, is not consistent with the city's Municipal Development Plan, and further strains existing city services such as public transportation and emergency services.
AIDA NCIRI: Why do you want to approve new communities that will continue increasing carbon emissions like those in 2018? Why do you want to continue building the city of yesterday? Attracting private investment and people to the city of tomorrow won't be done through new development.
My generation, and younger generations, want a vibrant inner city, not endless driving in subdivisions on the edge of the city. We want a climate-friendly city where we can commute by transit, where we can conveniently and safely walk and bike to nearby local businesses and other amenities.
KLASZUS: Now we'll hear Joan Lawrence of the Calgary Climate Hub, and Dr. Tesfamicael Ghebrehiwet of the Eritrean Canadian Community Association.
When we create communities that are built for cars, we force lower-income families to pay a larger portion of either their income or their time to get to work.
JOAN LAWRENCE (CALGARY CLIMATE HUB): When we create communities that are built for cars, we force lower-income families to pay a larger portion of either their income or their time to get to work and to participate in social life.
As a personal example, just before COVID, my son's high school basketball team went to a tournament in the southwest. Many of the players are kids from the northeast. It took them two hours, one way, to get there by transit.
That's not equity. That's telling their young people that there are areas of the city that are unavailable to them unless they have money for a car.
We talk about climate justice and equity, but what does that mean in the context of a city like Calgary? It means that everyone should have access to low-cost and low-carbon transportation methods.
Fixing what we've already built will be difficult, but we can at least avoid continuing to make the same mistakes by continuing to expand ever outward.
TESFAMICAEL GHEBREHIWET (ERITREAN CANADIAN COMMUNITY ASSOCIATION): We're also concerned that urban sprawl will stretch our public libraries, public services, fire and social services.
We believe the Calgary of the future should be compact with walkable neighborhoods, good transit, with shops and offices close by—thus creating the kind of city that attracts new businesses and young people to our city.
The citizens of Calgary are not interested in, and will not tolerate, cuts to existing services and existing neighbourhoods.
KLASZUS: This is Rev. Anna Greenwood-Lee of the Calgary Alliance for the Common Good, followed by Bob Morrison.
REV. ANNA GREENWOOD-LEE (CALGARY ALLIANCE FOR THE COMMON GOOD): And so at a time when you're looking at service cuts, it makes no sense to be investing in new communities.
Cast your mind back to last year's budget deliberations and to how many people from the Alliance came out in support of the low-income transit pass and to how many citizens from across the city came out to save our swimming pools and save our rec centers.
The citizens of Calgary are not interested in, and will not tolerate, cuts to existing services and existing neighbourhoods in order to subsidize development in new neighbourhoods that we don't need at this time.
BOB MORRISON: On climate action and support for the most vulnerable, I see nothing in the business cases that will help Calgary deal with those issues. On the contrary, if the business cases were approved, greenhouse gas emissions will rise, and the vulnerable living in those areas will be isolated, without the transportation, healthcare, social services, and other supports they need.
KLASZUS: The last two voices we’ll hear are Noel Keough of Sustainable Calgary and Joan Lawrence with the Calgary Climate Hub. Keough talked about how citizens have worked with city hall to set direction in the past—and how that work shouldn’t be undermined.
NOEL KEOUGH: We have put in the time in imagineCALGARY and the Municipal Development Plan and in the low-carbon economy report and in the resilience report, and on and on and on.
And I think most of the people that I speak to are very frustrated that we continuously have to come back to these forums and fight for what we agreed upon many times over the past 20 years.
LAWRENCE: So instead of spending hundreds of millions of dollars building pipes and roads to developments we do not need, let's invest in the communities we already have and build a better future for all Calgarians.
Please say no to the 11 new business cases. Thank you.
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