Developers (aka parasitic communities) to pay bigger share of suburban services

[chemgear]

http://www.calgaryherald.com/news/De...637/story.html

I kid about the "parasitic" term . . . maybe.

[SebC]

While it will trigger higher home prices, players on both sides say it won’t be as dire as the $10,000-per-house surcharge, because it’s almost certain to not fully close that $10,000-per-door gap between what developers pay and what the city must spend on infrastructure.

Sounds like it doesn't go far enough.

The "100% of the removed subsidy will be passed onto consumers" thing is complete bogus too, at least in the long run. That's only the case for perfectly elastic supply.

[GreenTeaFrapp]

Originally Posted by SebC

The "100% of the removed subsidy will be passed onto consumers" thing is complete bogus too, at least in the long run. That's only the case for perfectly elastic supply.

Very true. If that was possible, the developers wouldn't care about the additional development costs. What instead will happen is that land values will go down due to lower profits from developing properties at the market value.

Also, the OP seems a little confused about what a parasite community is. A parasite community is a community that exists outside the main city's boundaries and only exists because its residents can be employed in and use the infrastructure of the main city without paying for the taxes that support the infrastructure.

[Winsor_Pilates]

Good change. Before this spirals into the suburb vs inner city debate; even if you love the burbs its only fair that development there cover it's fair share of the costs. This is bringing it in line with other major cities.

[frinkprof]

Originally Posted by GreenTeaFrapp

Very true. If that was possible, the developers wouldn't care about the additional development costs. What instead will happen is that land values will go down due to lower profits from developing properties at the market value.

Also, the OP seems a little confused about what a parasite community is. A parasite community is a community that exists outside the main city's boundaries and only exists because its residents can be employed in and use the infrastructure of the main city without paying for the taxes that support the infrastructure.

To take the disparity out of it, what you are describing is called an "exurban" community, which won't be directly affected by these changes. Airdrie, Cochrane, Chestermere, etc. are all exurban.

[something]

Originally Posted by SebC

Sounds like it doesn't go far enough.

The "100% of the removed subsidy will be passed onto consumers" thing is complete bogus too, at least in the long run. That's only the case for perfectly elastic supply.

In the long run, the housing market tends to be somewhat inelastic - and it doesn't actually have much to do with elasticity of supply beyond the (very)short term.

Demand elasticity will have a much greater impact on the passing of the cost. I would predict that the most relevant outcome of this subsidy diminution would be to incentive non-suburban development (i.e.: high density, central development/redevelopment).

[Shazam]

Originally Posted by SebC

Sounds like it doesn't go far enough.

The "100% of the removed subsidy will be passed onto consumers" thing is complete bogus too, at least in the long run. That's only the case for perfectly elastic supply.

I've always thought that it was more of a philosophical issue with you than anything to do with money.

[bizaro86]

Originally Posted by something

In the long run, the housing market tends to be somewhat inelastic - and it doesn't actually have much to do with elasticity of supply beyond the (very)short term.

Demand elasticity will have a much greater impact on the passing of the cost. I would predict that the most relevant outcome of this subsidy diminution would be to incentive non-suburban development (i.e.: high density, central development/redevelopment).

It definitely will support non-suburban development, since suburban development will get more expensive. However, I bet more people will trade "down" to an ex-urban Airdrie/Okotoks/Cochrane than will trade "up" to an inner city development.

[Shazam]

Developers will keep the price the same.

They had a levy before, didn't seem to stop the relentless pace back then.

Why would it stop it now?

[Addick]

Originally Posted by Winsor_Pilates

Good change. Before this spirals into the suburb vs inner city debate; even if you love the burbs its only fair that development there cover it's fair share of the costs.

In addition, it should be fair across the board. I can't ask for suburban developers to pay their fair share and let inner-city developers off the hook, which is why I'm wary of TIF. In my opinion, we should be using property tax surcharges for both forms of development.

Originally Posted by bizaro86

It definitely will support non-suburban development, since suburban development will get more expensive. However, I bet more people will trade "down" to an ex-urban Airdrie/Okotoks/Cochrane than will trade "up" to an inner city development.

It's gotten to the point that this is no longer a more pressing concern for the City. It was interesting to read the change of emphasis in the SDA documents this time around.