Short-term challenges in supply with shortage coming
A promiment Calgary land developer and homebuilder says it’s important that the city keeps its place as one of the most livable cities in the world.
But Alan Norris, president and chief executive of Brookfield Residential, told the Herald in an interview that he has some concerns that an impasse has developed between the industry and city officials. And the city is facing a looming housing crisis with short-term challenges in supply.
‘‘I am fearful of a number of things happening that could cause problems down the road,” he said.
“Innovation and cutting the red tape is definitely something that Mayor Nenshi wants to accomplish. I’m concerned that that is not translating down throughout the rest of city hall. We do end up having in some cases competing interests between different departments. It’s very difficult to figure out which playing field you’re on … I think we have to make sure we have a common vision if we are encouraging innovation and trying to cut tape.
“If we want to be innovative we’ve got to loosen the regs a little bit and make sure that mantra is passed down through the city departments.”
Norris, who spoke at a Calgary Chamber of Commerce luncheon on Thursday, said the city is at an impasse right now for growth and future funding regarding the homebuilding industry.
“I’m just frustrated that we are going to end up in a significant supply constraint environment both for the free market and in the affordable housing segment,” he said.
“The impasse really is that nothing is really progressing through approvals … And there’s a funding and finance impasse right now where the industry and the city do not have an agreement with respect to who’s paying for what.”
He said most municipalities sit down and just figure it out.
“Let’s just figure it out because we are going to be in a huge supply constraint situation on all fronts which Economics 101 will push up the price of housing or people will move to outlying areas or they will just not move here at all,” he said.
“We have an issue here and I don’t see why we can’t sit down and understand this and come to a solution that allows things to move forward.”
Brookfield has built over 60 communities in Calgary in the last 55 years with upcoming ones Bearspaw and North Stoney.
As of June, it has built more than 8,000 homes (single family, semi-detached and multi-family). And it has about 270 employees in Calgary.
The homebuilding industry has recently been in the news during the current municipal election.
Mayor Naheed Nenshi recently reiterated his bid to end what he calls the “sprawl subsidy” — the cost of new suburban infrastructure that isn’t covered by levies the developer sector pays.
It amounts to $33 million per year, or $4,800 per home based on current suburban densities, the mayor said.
The existing five-year deal, which doubled the per-hectare rate developers had previously paid to the city, will expire in 2015, during this coming four-year council term.
“If you keep downloading costs onto the developers, that choice and affordability will erode — and it’s already eroding,” said Guy Huntingford, of the Urban Development Institute, said recently.
By Mario Toneguzzi, Calgary Herald October 10, 2013