Municipal fees and levies are boosting the price of a new house by too much in the capital region, says a report prepared for the Edmonton House Builders’ Association.
“Taxes, fees, levies and municipal charges on new housing are rising faster than the rate of inflation,” says the study, “and more importantly, faster than personal incomes.”
At the same time, low mortgage interest rates have masked the rising cost of housing. It shows as more affordable than ever by measures such as the RBC Affordability Index, says the report.
Even a slight increase in interest rates could make housing affordability an issue and hurt the region’s ability to attract and keep young, working-age citizens, it says.
The study looked at mortgage payments, taxes and normal costs of ownership of new single-family homes, townhouses and apartments in Edmonton and five communities: Strathcona County and the cities of St. Albert, Leduc, Fort Saskatchewan and Spruce Grove.
The report says that capital region municipalities have placed significant costs on new housing in the past five to seven years, at a rate greater than inflation.
Overall municipal charges on entry-level new single-family housing range from $3,718 in Leduc to $8,597 in Edmonton, a variation of 131 per cent.
The report said that builders fear that the ‘Alberta Advantage’ is disappearing for those who do not already own a home. The Edmonton region seems to be following high-growth cities such as Surrey, B.C., and Toronto, where average workers now have difficulty buying a house.