2014 likely to mark year of urbanism

Welcome to 2014, it’s going to be an interesting year for the Calgary new home building and land development industries.

Not in the way 2013 was interesting, which was akin to watching a stock car race, waiting for the next pile-up to happen.

The interest this year will focus on the coming changes to how and where Calgary will grow in the future, with a greater focus on increasing the population in established neighbourhoods and at what cost.

The trend to ‘urbanism’ began in Vancouver and Toronto and the Emerging Trends in Real Estate 2014 report from the Urban Land Institute and PwC (Pricewaterhouse Coopers), based on the views of more than 1,000 real estate experts, says ‘urbanism’ will spread to other cities, including Calgary.

“Residential development within city limits will be increasingly prevalent in 2014. Reflecting a secular trend toward urbanization and intensification, infill and in-town housing easily have the highest investment and development prospect scores for the year to come,” says the report.

Certainly ‘urbanists’ will rejoice, but those wanting a single-family home, which is the majority of Calgarians, will pay the price, says the report.

“If there is a limit to this trend, it’s that prices for single-family homes in Canada’s major markets are rising faster than personal income. ‘You can’t be in the business when the average man can’t afford the average house. We’re at that point now,’ says an interviewee. This trend could ‘push more development outside of the greenbelt to address affordability,’ another interviewee predicts.”

Vancouver’s growth is hindered by mountains and the ocean, while Toronto is held back by a greenbelt.

In Calgary, growth is legislated by the Municipal Development Plan (MDP), which regulates half the growth in the city over the next 60 years must take place in established communities inside the city’s 2005 footprint.

This will put significant upward pressure on housing in Calgary, especially single-family homes, but buyers have options outside the MDP.

Airdrie, Cochrane and Okotoks showed a faster rate of population growth than Calgary last year and the announcement of the new Waterbridge community in Chestermere has been called a shot across the bow of the good ship Calgary, but is more like a direct hit to the ammunition magazine.

Waterbridge, which will abut Calgary’s eastern city limit, is expected to add 46,000 people as well as new businesses and job opportunities and millions of dollars in tax revenues to the Town of, soon to be the City of, Chestermere.

It will be interesting to see how the City of Calgary struggles with the implementation of its urban growth strategy and how it will deal with the very real issue of aging inner-city infrastructure.

It will be interesting to watch the roll out of the Growth Management Framework and its prioritizing model.

It will be interesting to see how home builders and land developers react and adapt.

It will be an interesting year.