It has been far too long since I last wrote a blog post but after this story broke from the Edmonton Journal, I felt this would be a great time to get started again.

It is great to finally have a concrete dollar amount when discussing the cost of new developments but the fact that it is such a large amount should not come as a surprise to anyone.  To help address the high cost of new developments the city passed the Municipal Development plan in 2007 which stated,

“To ensure that the city grows in an environmentally and socially sustainable and fiscally responsible manner, the Municipal Development Plan (MDP), The Way We Grow, proposes a new development approach and sets out policies to develop a Growth Coordination Strategy (Section 3.0 – Managing Growth). This means that a Growth Coordination Strategy is not a new policy but instead is one of the key implementation tools of the MDP.”  Source

The part that stands out is the comment about the city growing in a ‘fiscally responsible manner’ as Edmonton’s growth has been anything but fiscally responsible since new residential neighbourhoods cannot pay for themselves in a 30 year period.  Obviously we cannot – nor should we – stop all development on the outskirts but we need to have a serious discussion about the costs the city incurs with providing services and infrastructure for new neighbourhoods versus the revenue received from the developer to build these new communities on the outer edges of Edmonton.  Encouraging “25% of city-wide housing unit growth to be located in the Downtown and mature neighbourhoods, and around LRT stations and transit centres where infrastructure capacity supports redevelopment” has not worked and new options must be explored.

I believe that developers should pay a larger amount for the land so that these new communities are paying for themselves.  These costs will be reflected in the purchase price of the homes in new communities but that will result in more families choosing to live in more mature neighbourhoods since home prices will be lower within the established communities.  The city does not need to partake in social engineering to convince people to live in existing neighbourhoods nor will they need to offer subsidies for developers to build in existing communities.  Having prices that reflect the true cost of providing essential services to new areas will ensure Edmonton can grow in a financially viable manner from this point on.  Not only will the city benefit financially, we will accomplish another one of the objections in the MDP which is becoming a more socially sustainable city.  If the lower priced homes are in the more mature communities, the young families will move in and there will not be a need to close schools due to lack of enrollment.  Council must thoroughly review these costs before approving new developments so that we do not run into a situation where Edmontonians experience large tax increases year after year to pay for developments that could have paid for themselves if the city charged an appropriate amount for the land in the first place.