Much applause from me this week for the Plan It Calgary group that released its findings on city planning and sprawl. They actually quantified the extra cost of servicing low density neighborhoods on the edge of Calgary versus more higher density projects closer to the center.
11 billion dollars.
It’s hard to believe this isn’t a ubiquitous metric at city hall. Traditionally city growth is at the whim of land developers whose only interest is making a king’s ransom from buying land and subdividing it on the periphery.
This week Plan It suggested that high density was the only way the city could afford to grow. The developers cried foul with suggestions that the market should decide. Freedom and fairness, they suggested, was being violated. The interface between city rules and a free, unfettered, organic development is interesting. Like many other markets to date, the housing marketplace has only appeared to act freely.
Up till now, developers and the market have been free to build at improbable distances from the core, while everyone else subsidizes the additional cost of providing what few services are brought to these areas. Public transportation is hardly viable in these areas and the high cost of automotive infrastructure is not borne by the people who chose to live there. If these ridiculous costs were fairly borne, the marketplace would very quickly reveal that not many people would freely chose to live there after all.
Suburban living is incommensurate with my lifestyle but I am sympathetic to it. A new 3 bedroom house in my neighborhood currently sells for $850 000 while a similar house and yard in the newest suburb sells for $550 000. Under those conditions its easy to see where demand concentrates but that cheaper house in the suburbs only exists when everyone in the center defrays the extra costs of infrastructure. The tens of billions of dollars that Calgary will spend over the next ten years could be put to far better use elsewhere. Imagine what a city could do with 11 billion extra dollars! So Hurrah for Plan It and the hard money math that few in city hall can now avoid.
I’m all for a free market in real estate. When one appears, I’ll support it.