Soaring Housing Costs - Densification Series Part 2

City Council deplores Calgary’s lack of “affordable housing.” And yet, Calgary City Council continues to adopt restrictive land-use planning and development policies resulting in unintended negative consequences: Unaffordable housing.

Restrictive land-use and densification policies in Calgary, on top of development fees and bureaucracy, have made it extremely difficult and costly to build single-family detached homes. These policies are the result of pandering to environmentalists who would force everyone but themselves into 700-square-foot condos in “location-efficient communities” on the BRT or LRT lines. The environmentalists, of course, live comfortably in their 3- bedroom detached home close to the city centre while preaching how others should live.

Numerous studies show how this approach to planning serves only to drive up housing prices, along with the costs of retail and commercial development which (in turn) causes rents to rise to reflect these higher costs.  But in the blind pursuit of the “location-efficient communities cause”, these studies are ignored and cast aside. 

Calgary is by no means unique. Similar land-use policies are in effect in dozens of metropolitan areas in Europe, the United States and Asia, and in almost all of those cities, these land-use policies have resulted in very, very high housing prices.

Local government interference in the housing free market system has resulted in a total reliance on government as the solution to all housing problems. Yet the housing policies coming out of government serve nothing more that to create unbearable high housing prices, enormous economic discomfort for buyers and rising social pain.

Proponents of “location-efficient communities” at City Hall continue to claim that housing affordability can be restored by building higher density and high-rise buildings in established mature communities within urban cores. This however would require significant liberalization of building heights and zoning regulations.

Result? All of this restrictive planning just leads to higher land prices, adding to the unaffordability of housing. 

In addition, residents in established communities, that have gone through the process of relaxing the former land-use bylaws to permit subdividing a single house lot, are seeing their property taxes soar.  Infill development is driving up assessment values of the established older homes which are offsetting the higher density development.  For long time residents of these established communities, this threatens their affordability to remain in their homes.

If City Council was truly concerned with ensuring that the residents of Calgary have access to affordable housing, they would scale back on restrictive land-use policies and allow for Greenfield (or net new) land development.  One policy suggestion purported by the Frontier Centre For Public Policy is to set a price:income ratio.  Any year this goal is not met, an automatic expansion of greenfield land supply would occur to counter the problem being created.

Such a measure would permit the competitive market for land to operate and would result in positive progress toward housing affordability. 

The current Calgary City Council and planners have “forgotten” about the basic and fundamental economics.  It’s all about a falsified perception of environment cause and a much more self compelling purpose of creating a greater tax purse for them and their lofty ideological pursuits.  And, as usual with local government meddling, indirect result of icreased housing costs have fallen disproportionately upon those who can least afford them.

Affordable housing, be damned.