The new MGA and City Charters have enabled municipalities sweeping new levy powers, which could mean that new developments pay for more City infrastructure and facilities in the future. NAIOP and our industry partners are working hard with the City of Edmonton on this important initiative.
Off-site levies are charges imposed at the time of subdivision (or development permit) to pay for new infrastructure or facilities. The previous MGA (Municipal Government Act) allowed municipalities to levy for land and facilities related to new or expanded:
Water service
Sanitary sewage
Storm sewer drainage
And municipal roads
The October 2017 update to the MGA expanded the above list of off-site infrastructure to also include:
hi-way interchanges
libraries
police stations
fire halls, and
community recreation facilities
These potential changes to levies could download over $1 Billion in cost to land developers (residential, commercial and industrial), in the City of Edmonton alone, over the next 30 years.
Additionally, new City Charter legislation allows the City to create off-site levies for any infrastructure, with very few limitations, increasing the exposure of land developers to incalculable rates.
For these reasons, the mayor and council have asked administration to work with industry to understand:
Which of these levies could and should be implemented?
What parts of facilities should be included (for example, should new neighbourhoods pay for the public art on a firehall, or is this more of a city-wide priority?)
The impact of alternative funding sources (ex. provincial grants)
How the ‘developer-pay’ model could affect and be affected by city building standards
The impact of levies on city financing, and timing of new infrastructure building (for example, do we need to wait for the last developer in an area to pay into a library levy before we build a new library?)
The impact of the levies on different kinds of development, home prices, and business competitiveness
NAIOP (along with our partners at BILD Alberta, CHBA, UDI, and IDEA) are working hard on this important initiative. The focus of our discussions is on keeping Edmonton competitive for new businesses, and maximizing clarity and value where developers do pay.
Contact anand@naiopedmonton.com for more information or the share your thoughts.