There will be no impact on Calgary’s proposed off-site levy charges as the province has made City Charter changes to the process.

Last week, Calgary city councillors approved a date to hold a public hearing on potential services provided by off-site levies (Jan. 16, 2024), and to approve three readings on a new off-site levy bylaw.

Off-site levies are the amount charged to developers as the city puts in a variety of services, including water and wastewater, pathways, streets, transit, emergency response and others.

On Monday, the Government of Alberta announced proposed changes to City Charters that amended how municipalities can collect off-site levies. They said that changes would allow cities the flexibility to recoup costs, but not enough to unnecessarily drive up the costs of building new homes.

One of the main changes proposed is that the City can’t compel a developer to have an off-site levy greater than the developer applicant’s proportional benefit. Developers can also appeal any aspect of an off-site levy. It also compels cities to engage with stakeholders on the off-site levy process.

The province also removed the Inclusionary Housing Provisions, saying that it hadn’t yet been used in either Calgary or Edmonton.

“These changes to city charters are just one example of how Alberta’s government is ensuring housing remains affordable and attainable,” said Jason Nixon, Minister of Seniors, Community and Social Services.

“Inclusionary housing ultimately drives up development costs and higher home prices and that’s why we are removing it from the charters.”

Proposed levy increase of $1,700

The City of Calgary’s off-site levy bylaw would be $609,000 per hectare, based on 27 housing units/ha.  This represents an eight per cent increase, or $1,700 per door, if approved in March.

During last week’s conversation, BILD Calgary Region spoke about their concerns with the proposed bylaw. Graeme Melton of Melcor Developments said they couldn’t support it in its current form, though did they support growth paying for its share.

They wanted a further delay of 60 to 90 days to review more data from the City of Calgary.

“We support a levy consistent with councils approved principles and are aligned with a methodology that results in a levy that is data driven, transparent, competitive, affordable, repeatable, fair, and reasonable and defendable,” Melton said.

“We support the transportation (roads) portion of the levy but we are unable to support the water and wastewater and storm portions the levy.”

They also said they couldn’t support transit levy. BILD CR CEO Brian Hahn said that they wouldn’t back a 327 per cent increase to the transit levy without rigorous scrutiny and review.

“Our concern lies not in the recognition of the growing need for efficient transit but with the approach employed to determine the service level,” he said.

“Simply dividing the number of buses by the number of residents does not seem to be a reasonable or accurate way to forecast the actual demand.”

Melton said that such an increase to the levy is avoidable, and impacts home affordability.

“Ultimately, this all comes down to affordability,” he said.  

“Having a levy that exceeds the rate of inflation by eight per cent is working counter to the hard work the city and industry is doing to maintain home affordability.”

BILD CR actively lobbied the provincial government on the proposed off-site levy changes to city charters, according to the Alberta’s lobbyist registry.

Still, the City of Calgary said it doesn’t impact the way they calculate their levies on greenfield development.

“The City already calculates the benefit to development in the cost calculation,” they said in an email response.