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HOUSING: Business group recommends solutions to help boost Calgary’s housing affordability
      (AlbertaIndex, May 9, Friday) –-- Greater certainty, emphasis on affordability, and streamlined approaches are needed in the city of Calgary’s planning, land use and development processes, according to a major research report released by the Calgary Chamber of Commerce.      The report investigated Calgary’s housing affordability since 1980 and offered comparison with other Canadian cities, discussed the factors that affect housing prices, and provided recommendations to improve the affordability of Calgary’s residential real estate market.

The report said the city should include affordability to the list of 11 sustainability principles, and incorporate these principles into the city’s statutory Municipal Development Plan (MDP), which guides growth and development. It should also publish criteria for evaluating development proposals in the context of these sustainability principles, and circulate them internally and to the development industry.

On land use, the report said the city should streamline policy and planning process by incorporating the content of regional plans, and the city’s 40 or more land use and planning policy documents, into the Municipal Development Plan, which ensures that all subordinate plans are updated automatically with the MDP.

Calling for better city and industry collaboration, the report said: “The transformation to high-density, mixed-use, walkable and transit-oriented forms of development, which can act to improve housing and homeowner affordability, involves significant time and risk to both the city and the developer. Developers bringing an unconventional product to market must create alternative design standards for these projects, Garrison Woods and Mackenzie Towne communities being two recent examples.

“The success of these projects hinged upon a mutually respectful partnership between the developer and the City, and a willingness for the project to succeed. While the city is encouraging developers to bring forward innovative projects, the research suggested that the same level of commitment is not as endemic as it was in 2003.”

The report said the process should include greater council participation and community engagement.

Projects that are politically sensitive can take up to twice as long to be approved and developed. City council is directly involved in approving land use and zoning applications, with the relevant ward alderman carrying significant weight on local zoning decisions.

Community organizations can also be effective at opposing local projects with the ‘unintended consequence’ of depriving the broader community of citywide benefits. High-density, mixed-use, transit-oriented developments that are characterized by such broad-based benefits can be particularly contentious.

The report recommends the adoption of a balanced approach to the zoning approval process, thereby ensuring all aldermen have equal weighting on community zoning decisions. The mayor might also hold a deciding vote.

Council should work closely with the city manager’s office to develop a principled, effective and consistent internal framework that separates early ‘political’ considerations from the approval process, after zoning decisions have been made.

Council should develop consultation protocols for major land use applications, where local community group inputs are considered as part of, and within a broader citywide consultation, and in a broader municipal context.

Heather Douglas, President and CEO of the Calgary Chamber of Commerce, said:

“The current price of housing relative to incomes poses a significant challenge to Calgary businesses seeking to attract and retain employees – the number one issue confronting chamber members. With this report we aim to encourage greater discussion regarding ways to improve affordability in the owner occupied housing market.”

According to the chamber’s analysis, Calgary’s housing was at one of its most affordable positions between 2000 and 2005. In 2006, however, the median price of housing rose by an unprecedented 41 per cent, and housing affordability, one the city’s competitive advantages, rapidly eroded.

An analysis of the factors affecting housing prices in this year concluded Calgary’s affordability challenge was mainly demand driven.

A number of growth factors culminated in 2006 to create a “demand shock.” These included record annual population growth (3.7 per cent), record employment growth (7.4 per cent), and record income growth (4.5 per cent). It was also fuelled by record low rental vacancy rates of 0.5 per cent, a near record low interest lending rate, and one of the highest in-migration counts in Calgary’s history.

This “demand shock” was substantiated by Calgary home sales in 2006, which topped 33,000, up 25 per cent from two years earlier.

Within this context, in addition to labour shortages in the building and development industry, the recent deterioration in housing affordability is understandable.

However, as Calgary continues to grapple with high housing costs, both the real estate industry and the city must work together to re-examine approaches that would improve affordability.

In this cooperative spirit, the chamber’s research determined that the city could best influence housing affordability through its land use and supply policies, and approval processes.

The report is informed by an analysis of affordability measures, a comprehensive review of the literature on housing affordability, current municipal policies, and 15 in-depth, interviews with representatives from the building and development industries, the city of Calgary, and staff at the regional municipality of Halifax and the city of Toronto.

“Greater certainty, focus on affordability, and improved approaches are needed in the city of Calgary’s planning, land use and development processes for the real estate industry to provide affordable housing more quickly in response to demand,” said Douglas. “This stabilizes the market, and ultimately leads to greater housing affordability.”

This project is made possible through a grant from the Alberta Real Estate Foundation.


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