Hello At the Executive Council meeting on Monday, June 9th, 2014, City Council will be reviewing Regina’s phasing and financing plan. This is a very important issue for our city and I’d like to share some of my thoughts with you. The report before council recommends Service Agreement Fees for new neighbourhood developments be raised and the next neighbouhoods to be developed in Regina follow a phasing order that takes into consideration the cost of associated infrastructure for the city. Some developers argue that Service Agreement Fees shouldn’t be raised because the cost is ultimately passed along to homeowners. We must keep this in perspective. Service Agreement Fees, which are used to offset the cost of infrastructure in a new neighbourhood, account for about 3% of the total cost of a new home in Regina. While average house prices have raised around $210,000 per house since 2007, develop fees only account for around $9000 of that increase. Another common complaint from developers is that phasing neighbourhoods reduces choice for home buyers. While everyone likes choice, the challenge created by allowing many neighbourhoods to develop at once is that none of those neighbourhoods end up filling up as fast as they otherwise would. This means the city has to invest in a lot more infrastructure that isn’t being used to its full capacity and home owners in a particular new neighbourhood have to wait a longer time to live in a complete community. Not every other Canadian city handles development the way Regina does. Take Saskatoon for instance. The city is divided into four quadrants and one new neighbourhood is allowed to develop at a time in each quadrant. Once a neighbourhood is near completion another is allowed to begin. This means neighbourhooods in Saskatoon tend to become complete fast than they do here. The City of Saskatoon also acts as a land developer itself. Not only does is this return revenue to the city, it also means that the city can be proactively involved in creating neighbourhood and housing types the city needs but that private industry is unable to deliver on. While the recommendations from administration are a step in the right direction, I question if they go far enough. It is not in the city’s interest for a shortage of developable lots to drive up land and house prices even more, but the suggested plan will allow 3 new neighbourhoods to proceed in the coming 2 years. That brings the total to 12 developable areas in Regina. Despite the proposed SAF increases, the rest of Regina will still subsidize new neighbourhoods in the city. Regina’s Service Agreement Fees fund is currently in debt to the tune of around 20 million dollars and the proposed recommendation from administration will increase this number to nearly 50 million by 2016, bringing Regina’s total debt uncomfortably close to the city’s borrowing limit of $450,000,000. If we want to turn the corner on Regina’s growing infrastructure deficit we need to change how we subsidize new neighbourhoods. Eventually Service Agreement Fees need to reflect the real cost of growth, and I believe Regina would be well served to eventually have its own development corp. If you have any questions please feel free to contact me at [email protected] -Shawn
Posted on: Fri, 06 Jun 2014 19:32:37 +0000
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