Homeowners ultimately pay the price when communities download costs on to developers, said a former president of the Urban Development Institute.
“That’s really where it goes in the end,” said Ray Watkins, a principal with Edmonton-based G3 Development Services Ltd., on Tuesday.
“You can apply all sorts of costs to new development. But in the end, they’re going to apply it to the new home buyer.
“So who’s representing that new home buyer. That’s kind of the issue and the concern for us. And (the one representing home buyers) usually ends up being us the development industry,” said Watkins, who is developing properties in Red Deer’s Glendale and Clearview Ridge neighbourhoods.
Watkins was among the speakers at the annual conference of the Community Planning Association of Alberta at Red Deer’s Black Knight Inn
The Urban Development Institute, which represents the province’s development industry, is looking for changes to the Municipal Government Act to clear up grey areas in the legislation concerning levies.
Municipalities, the provincial government and the development industry should work together to clarify what costs can reasonably be passed on to new development, he said.
A number of court cases have arisen when municipalities tried to collect costs, for infrastructure such as roads or bridges, that developers felt were unjustified. In a number of cases, the courts have agreed with developers.
There have also been scenarios where developers are asked to pay for “soft costs” tied to new development, such as the need for more police or fire protection, or even recreation.
Under provincial legislation, municipalities cannot require those costs be covered. But developers can “volunteer” to contribute, which creates uncertainty and a lack of consistency between municipalities, the development industry argues.
The institute believes soft costs benefit whole communities and shouldn’t be levied on new developments.
Joanne Klauer, a municipal lawyer from Calgary, said the levy system is based on a fair allocation of costs.
But some communities have decided they can’t afford new development — and the sewers, roads and water mains that come with it — without additional financial help from developers.
Municipalities are faced with not burdening their community with the costs of new development, while at the same time not charging so much for levies that developers are scared off.
“It’s a balancing act,” said Klauer.
pcowley@www.reddeeradvocate.com