They call it a “sprawl subsidy”.
New communities that require infrastructure and have yet to establish a tax base are being subsidized by tax payers in Edmonton’s inner-city. It’s the taxpayers that are subsidizing all of the new suburbs in Edmonton. It’s the way it’s always been, but ever since the city council in Calgary decided that it should be the developers who foot the bill and not residents, perhaps Edmonton should be looking at this as well.
Developers will be paying levies now to build communities in the outer fringes of Calgary by 2018. That includes the price tag to install water and waste water infrastructure. Something that Edmonton should look at, because the cost of putting this type of infrastructure in the new neighbourhoods currently approved and on the books are estimated to be $2.1 billion.
Sounds like a good idea in theory and it’s a road that Edmonton city council has already been down to some extent. Some development levies are already in place and have been in practice for a few decades. However more can be done because at this point, none of Edmonton’s neighbourhoods has a high enough density to actually keep itself in the black, with the exception of Oliver.
If you look at Edmonton’s road and waste water infrastructure, developers are already responsible for putting in new roads and installing sewer pipes within the boundaries of a new community. The developer also foots the bill for larger arteries and more sewer pipes on the perimeter of the new community.
They also pay if a feeder line which may be under an existing and further away community needs to be expanded to improve capacity and service to that new community.
The developers pass the costs of improving and installing infrastructure and new services to the home buyers, and rightly so. However, there are other components to the development of new suburban neighbourhoods that should be looked at. For example, the upgrade to and building of waste water treatment plants to handled increased loads. Plus, potable water, garbage and recycling pickup. The further out Edmonton suburbs become, the more trucks, the more people the more gas and at present, this extra money comes out of city coffers.
That includes new fire stations, police precincts, libraries, recreation centres, transit service, street lights – the list goes on and on.
It’s the price of doing business in the city but the debate rages on – do taxpayers in Edmonton’s inner city foot the bill for new districts in the suburbs.
Edmonton city council is going to be reviewing this issue during budget debates scheduled for fall 2016.
A city spokesman says council will look at the cost of providing services in some of Edmonton’s existing neighbourhoods and compare it to the cost of providing the same level of service for new communities, bearing in mind that collecting taxes and developing a revenue base from new homeowners will at some point be factored into the equation.