Alberta’s policy shifts and impact on real estate – where are we?
Alberta’s real estate sector is resilient. It is full of smart, well-capitalized companies familiar with Alberta’s economic cycles.
The players have changed substantially over the past 10 years with more national and international players backed by institutional money. Developers today play Calgary and Edmonton as part of Canadian and/or international portfolios. However, new political dimensions are testing the industry’s mettle. Is industry prepared for new factors for capital-investment decisions? While articles of late hyper- focus on the economic cycle, I choose to provide the lesser told, but equally important, political topics that could fundamentally affect the market.
An NDP government has rendered old political networks, and rolodex’s (for those that still have them), relatively useless. Industry is challenged with establishing new government relationships. At the same time, the Municipal Government Act (MGA), Alberta’s largest piece of legislation governing how municipalities, councils, planning, and taxation work, is being overhauled. No small task.
The MGA review commenced in 2014. The industry focused on key MGA areas of city charters, regional planning, environmental and park-land dedication, development charges & financing, and inclusionary zoning. These are major MGA amendments which industry and municipalities must work within to deliver housing to Albertans. A change in government in May 2015 ushered in a new minister of municipal affairs and, since then, another new minister. It is understandable then that this slowed MGA review and adoption of legislative changes well into 2016. The Government is now considering positions as to how the MGA will allow for the making-good on campaign promises – particularly those of inclusionary zoning, affordable housing, and city charters – before further revealing relevant information to the public, industry, and municipalities. Regional growth management will also be implemented via entities such as the Calgary Regional Partnership through upcoming legislation.
Industry also awaits the hiring of a new city manager for Edmonton where city council desires a “hands on” leader to deliver results to Edmontonians and council. A recent re-organization of city departments in the interim is underway. Look to see the new city manager’s strategic objectives for Edmonton Council soon after a hiring announcement.
The “Build Calgary” initiative at the City of Calgary will continue to be watched closely. Recently, Build Calgary’s recommendations delivered to city council for new and infill community development charges were accepted with industry and political support. These changes substantially increased existing levies on the whole, at the same time introducing inner-city levies for the first time. Look next for how other Alberta municipalities follow suit or not as they compete to grow.
So as we start a new year, answers to some political questions, but not all, were revealed. For the rest, you will just have to stay tuned.
David Allen is the founder of Situated, an Alberta-based real estate development adviser and management firm. Look for more articles and learn more about Situated at www.situated.co.