The Hidden Price Tag: How Regulatory Costs Drive Up Calgary's Infill Housing Prices

New analysis from the Canadian Centre for Economic Analysis (CANCEA) reveals a startling reality for Calgary's housing market: an average of $47,000 in regulatory costs is tacked onto every new infill townhouse unit. This significant sum, detailed in a report commissioned by BILD Calgary Region, represents a substantial hurdle for developers and a major contributing factor to the city's housing affordability challenges.

The comprehensive study, released earlier this month, dissects the various fees and charges that inflate the price of a typical 1,400-square-foot infill townhouse.

These include municipal levies, utility connection fees, and new development permit charges, all accumulated before a single brick is laid. This figure starkly contrasts with similar developments in other Western Canadian cities, with Edmonton's infill regulatory costs coming in at $36,000 per unit and Saskatoon's even lower at $25,000, highlighting a unique burden on Calgary builders.

The implications of these costs are profound.

As Calgary grapples with a burgeoning housing crisis, characterized by low inventory and escalating prices, these regulatory add-ons further distance homeownership from the grasp of many first-time buyers and families. The city's own strategic goals often champion infill development as a sustainable solution to urban sprawl, yet the current fee structure appears to contradict this ambition, making infill projects less financially viable and less attractive to developers.

BILD Calgary Region's CEO, Brian Scott, emphasized the urgency of addressing these regulatory burdens.

He points out that the goal of increasing housing supply, particularly through infill projects, is directly undermined when the cost of construction is inflated by municipal fees. This situation not only impacts the price consumers pay but also slows down the pace of development, exacerbating the supply shortage.

The analysis serves as a critical call to action for city officials.

Reviewing and potentially streamlining these regulatory costs could unlock significant potential for more affordable housing options within Calgary's existing communities. By fostering a more balanced and efficient regulatory environment, the city can better align its policies with its stated housing objectives, paving the way for a more accessible and vibrant housing market for all its residents.