Category Archives: Developers

What’s really behind Calgary’s higher home prices

Has Mayor Nenshi’s desire to see Calgary build “up” rather than “out” resulted in a lack of land on the outskirts of the city for new builds?  The director of the University of Calgary’s School of Public Policy, economist Jack Mintz thinks so…

“Calgary now has moved towards what’s called an intensification strategy. And it’s a good thing to have some intensification because you don’t want to hollow out the middle of the city,” says Mintz.

“But you have to have some balance and if there’s no more expansion that’s going to be allowed, maybe we have to close down parks to make way for new housing. Otherwise prices are going to go up because you’re simply going to have higher land prices.”

Mintz says the city needs to think carefully about limiting new housing development if it wants to make housing more affordable.

“The prices can be policy induced. and if you think of it being artificially high that can happen if you’re no longer getting enough supply relative to the number of people who want to move into Calgary.”

ATB economist Todd Hirsch has a different theory…

“I think that’s part of the reason building costs and material costs and labour costs are a little bit elevated in Calgary still because again we’re not seeing the same impact in Edmonton. So I think Calgary’s flood last year still having some residual carry over effect to these new home prices even today.”

Hirsch says once the flood rebuilding is complete, building costs will come down — and we will likely see more moderate growth in new home prices.

Read more Curbing urban sprawl, flood driving up new home prices

What we didn’t hear in this story is that Calgary is inundated with thousands of new residents every year.  Last year alone, net migration to Alberta from the rest of Canada totalled almost 45,000. Would there be a problem with supply, and higher prices, if we weren’t growing so fast?


Cardel shows confidence in Calgary real estate

From the Calgary Herald:

Calgary home builder Cardel Homes is planning a 1,700-unit residential  development in Shawnee Park after purchasing 52 hectares of land that was  formerly known as the Shaw-Nee Slopes Golf Course.

The golf course ceased operations in 2011.

Cardel Homes purchased the southwest land, located alongside the southern  edge of Fish Creek Park, from Geo-Energy Enterprises Ltd. The sale price was not  disclosed.

The home builder said its city-approved project will consist of condo  apartments, town houses, and single-family estate homes, all adjacent to Fish  Creek Park.

Development will begin in the fall.

Read more:  Cardel Homes plans 1700 unit residential project

Who should pay for infrastructure?

No doubt you’ve heard about the “Smoking Gun” video of a November meeting hosted by Cal Wenzel, founder of Shane Homes, where Wenzel presents a plan to defeat select members of city council who are perceived to be anti-development.

Some in the housing industry have been clashing with the city over growth and who should be responsible for infrastructure.

Mayor Nenshi, in an interview on CBC this morning, says he is against urban sprawl and corporate welfare, implying that developers, and ultimately new home owners, don’t pay the true costs of their infrastructure, and are getting a free ride on the backs of the taxpayers.

When the city pays for infrastructure, it distorts the playing field.  Rather than making inner-city more attractive because the infrastructure is already there, it basically subsidizes the developers(and their private jets and big profits, as Nenshi pointed out),  and contributes to urban sprawl. Should developers be paying for the true costs of the infrastructure in new areas?

Global News video of Cal Wenzel, founder of Shane Homes, presenting a plan to defeat select members of city council are perceived to be anti-development:

CBC’s Eyeopener this morning: Mayor Nenshi reacts

This story has produced a flurry of comments on Global’s website. For example:

“Things WILL change, they WILL HAVE to build sustainably and buck up with environmental initiatives as well as paying for asp’s that they push the City to develop just because they want to slap up a new development in the sprawling parts of Calgary. Shame shame shame. Well done global, we need more developers actions put under the microscope”

“Continued urban sprawl is a financial subsidy to housing developers in that their developments get the necessary physical infrastructure (water, road, sewer, transit, et cetera) on the cities dime and property taxes never fully recover these costs.   The city carries a large ongoing debt due to the expense of continued urban sprawl that these developers are trying to ensure continues unabated through the purchase of the necessary votes on city council.”

“The fact is that inner city development is far less costly when you look at the overall life cycle costs than development on the fringes (Transportation, water, sewer, etc.) so its time that the full cost of development is borne by the consumers of new homes in the suburbs.”