Plan to add 11 new communities to Calgary's outskirts coming to council

City council will be asked whether or not it wants to approve 11 new communities on the outskirts of Calgary, two years after a controversial decision that approved 14.

Coun. Druh Farrell says council is being lobbied by some members of the development community to push the plan through, while city administration is recommending no approvals based on weak demand and oversupply of new housing.

"It it is often the case that if members of the development industry lobby for something, they get what they want and we cannot afford it," said the Ward 7 councillor.

The business plans will go before the priorities and finance committee on Oct. 19. That meeting will be open to public for comment.

"We're already looking at cuts to services. What this would mean is deeper cuts to services for all Calgarians in order to add supply that no one needs," she said, adding the upcoming budget will be "incredibly tough."

She says the city has committed almost $500 million in funding to new community growth until 2022.

Farrell says there is a record number of communities developing in Calgary, 41 in total. She says the time it takes to build out those communities will take longer and that delays the payback to the city.

She says there was a $57 million hit to the 2019 budget, with more shortfalls expected.

'Socialized risk, private profit'

The 11 communities would all sit in close proximity to the previously approved expansions.

Trico is one of the developers that will be bringing a business case to the committee next week, seeking to move forward on two additional parcels tied to its overall plans for the Belvedere development.

"Trico is very committed to the east side of Calgary. We feel this area has been overlooked in the past with no real supply of new homes," said Wanda Palmer, the vice-president of marketing for Trico.

"We believe providing more choices within Calgary's east sector will help mitigate market loss to smaller satellite communities outside of Calgary."

The 14 communities approved in 2018 came despite the fact city administration recommended approval of eight based on lower demand for new housing.

Only Mayor Naheed Nenshi and Farrell voted against the plan.

She said that decision added 0.75 per cent to property tax bills in 2019 and will results in 0.5 per cent increases to water utility rates each year between 2019 and 2022.

Farrell says it's easy to understand why the development industry would want to get the approvals in place despite weak demand and oversupply.

"It's socialized risk and private profit, but it's your own land, of course you'd want to take it to the market and develop your land, but we cannot afford it," she said.

Protecting investments

Coun. Gian-Carlo Carra, who represents Ward 9, says the city has an obligation to go through a public hearing when an owner wants to change their land use.

He thinks this is more about a struggling development industry trying to add value to their existing land.

"I think that these companies, as they're trying to stay solvent, as they're trying to weather this economic storm, they are hoping to take their land through that next stage gate," said Carra.

"So it's worth that much more so they can continue to pay their salaries and they've got mouths to feed."

He said there's a balance between spending the public purse wisely and supporting the second largest industry in the city.

"Having said that, I think it's pretty clear that we oversaturated the market two years ago by accepting 11 business cases," said Carra.

The same committee that will decide on the new communities, asked administration whether it could pull back on the previously approved expansions due to budget woes, but was told it was locked in.