On Monday, Jan. 11, 2016, City Council approved Bylaw 2M2016, the new off-site levy bylaw. Council made the decision following a public hearing that included a detailed presentation and report from Administration. Presentations were also made from members of the development industry.
The report (C2016-0023) proposed updated off-site levy rates and community services charges for implementation on Feb. 1, 2016.
Off-site levies are charges that developers pay to the City of Calgary to help with the cost of off-site infrastructure. Off-site infrastructure includes major components like water and wastewater treatment facilities; recreation centres; connecting pipes; major roads, intersections, traffic signals and bridges; fire halls; libraries; transit buses; and, police stations.
The off-site levy bylaw project began in early 2015 and lasted one year. In that time, the team worked with a number of internal and external stakeholders to refine the new off-site levy bylaw. Among the stakeholders was a large group of Calgary land developers and home builders.
Among the specifics of the new off-site levy bylaw:
- Levies for water and wastewater treatment will be charged city-wide, which includes the established communities, which is a new component for the off-site levy bylaw
- A density incentive program for high-density development in established areas is also among the report’s proposals, to ensure that the new charges don’t discourage high-density development
- In the Greenfield areas (new communities), there will also be levy charges for water distribution, wastewater collection, drainage, transportation, and community services
The approved off-site levy bylaw will help the City of Calgary continue to build great communities for all Calgarians and also contribute to the City’s goal of financial sustainability.
For more information, contact the City at 403-268-2888 (Mon – Fri 8AM – 4:30PM).
Questions & Answers
1.What are off-site levies? Developers pay for the cost of infrastructure that is internal to a new community that they’re building. The internal infrastructure includes things like roads, sidewalks, street signs, bus stops etc. But when a new community is built, there are also impacts on infrastructure that is outside that specific community. For example, there is more pressure on a major road or pressure on sewage treatment system. So the City of Calgary charges developers a levy that helps pay for the cost of the off-site infrastructure. Off-site levies are just one of the tools the City uses to help attain financial sustainability.
2.What kind of infrastructure are we talking about? Off-site infrastructure includes major components like: water and wastewater treatment facilities; recreation centres; connecting pipes; major roads, intersections, traffic signals and bridges; fire halls; libraries; transit buses; and, police stations.
3.Who pays these levies? The City of Calgary uses a method to calculate how much growth is projected to occur in a certain area and how much impact that growth will have on the City’s infrastructure. The City then figures out a way to share the costs of growth. The City of Calgary and developers both contribute to the cost of off-site infrastructure.
4.Why is the off-site levy bylaw being re-written? The last off-site levy bylaw was approved in 2011 and, as we all know, things change. Calgary has experienced tremendous growth and the City, in consultation with the development industry, regularly needs to update the cost and calculations of growth. The City of Calgary has worked closely with industry throughout 2015 to update the bylaw based on today’s fiscal realities.
5.Does the new bylaw impact lot prices, new home prices, affordability and choice?
The bylaw itself ensures that the costs of infrastructure are being paid. The work the City of Calgary has done in ongoing consultation with industry has determined the calculated costs and methodology to determine their contribution towards paying for water and wastewater treatment plants, major roads and bridges, fire halls etc and who benefits. Those costs have to be paid one way or another, be it through property taxes, utility fees, grants or levies. One of the City’s goals from the outset was to ensure the process was transparent, that external stakeholders had input throughout the entire process and that our methodology was sound.
6.Ultimately, does the home buyer pay? Yes, the home buyer does pay for some of the cost of the infrastructure. Typically, when the developers pay levies to cover the cost of growth infrastructure, the charges are included in the cost of a new house. Again, the infrastructure we’re discussing is critical to ensuring Calgarians continue to live in complete communities with the services they need.
7.What is the average increase in cost per new home with the new off-site levy rates? The increase in the rates equates to about 1% of the cost of a new home. As of October 2015, according to CMHC, the median price of a new single detached home in Calgary is $660,000. Developers pay the levies and will determine how to absorb the new increase in the levies, which could include passing on the costs to homebuyers.
8.When will the new off-site levy bylaw be in place? Administration expects the new off-site levy rates to be implemented as of Feb. 1, 2016.
9.Can you compare the old rates with the new rates? In 2015 in Greenfield areas, the rates were $298,911 on average. In 2016 in Greenfield areas, the rates are proposed to be $435,044 on average. These amounts include the community services charges. The reason there is an average is because the rates in the Greenfield areas differ among various communities in the city.