Affordability is key for City Charters

There are many examples of concrete actions Alberta’s government is taking, and some folks may be interested in reading our Stronger Foundations affordable housing strategy, or reviewing several media announcements where Premier Smith and Minister Nixon have talked about Alberta’s approach to housing affordability and attainability. But as I say, we are leaving no stone unturned, and one way we can prevent unnecessary regulations from increasing housing costs in Calgary and Edmonton is to keep affordability in mind as we update the City Charters.

What are the City Charters?

Like every municipality in Alberta, Calgary and Edmonton are governed by the Municipal Government Act (MGA). But due to the size of their populations and their roles as economic and service hubs in the southern and central regions of our province, the 2 big cities have special regulations that provide them with additional flexibility to foster strong communities that attract trade and investment. These Charters enable Calgary and Edmonton to modify or replace certain provisions of the MGA under specific circumstances that are spelled out in the regulations and only by passing a bylaw. For example, either city can use their Charter to pass a bylaw to put different speed limits within neighbourhoods. This has allowed the City of Edmonton – at the request of its residents – to have lower speed limits in residential neighbourhoods.

Collaboration between Alberta and the big cities is always ongoing, and every now and then the Charters are reviewed to make them more effective. We recently proposed some updates to the Charters with housing affordability at top of mind.

For the most part, the updated Charters remain as they were, but Alberta’s government is making a few changes. In addition to clarifying the rules around off-site levies, which are charged to developers of new communities for public infrastructure costs, we are repealing a provision for inclusionary housing and removing the authority for bylaws related to building codes.

Allow me to explain…

Charter update: Off-site levies

Off-site levies are an additional cost that municipalities charge to developers that are building new developments. This cost helps municipalities pay for key infrastructure (like roads, water, wastewater and stormwater) as well as infrastructure necessary to make a new neighbourhood attractive (like recreation facilities, libraries, police stations and fire halls).

When the Charters first came into force, there was a great deal of flexibility for off-site levies and what Calgary and Edmonton could charge. Charters also limited the ability for developers to appeal to the Land and Property Rights Tribunal (LPRT), which they can do in all other Alberta municipalities. This sounds pretty good for Calgary and Edmonton, but it’s not always a fair arrangement for developers.

That’s why we are updating the Charters to allow developers to appeal off-site levies to the LPRT. We are also tightening the rules for off-site levies so that both cities must negotiate bylaws in good faith, respond to feedback they receive, follow the principle of proportional benefit, and use a standardized formula for calculating levies.

These changes will still allow Calgary and Edmonton plenty of flexibility but will also make sure off-site levies don’t unnecessarily drive up the costs of building new homes.

Charter update: Inclusionary housing

It’s good to see that Calgary and Edmonton have both been taking important steps to address the housing crisis on a local level. Edmonton recently passed a more flexible zoning development bylaw that opens the door to the development of more housing options. Calgary is currently working on a similar bylaw, which should be in place in 2024.

These are important steps that both big cities are taking… and neither has needed the inclusionary housing provision of the City Charters to take these steps or to pursue housing strategies.

The City Charters originally included a provision for inclusionary housing as a way to require developers to provide either housing units or land or money that the big cities could then use to increase non-market housing. However, if Calgary or Edmonton ever took this approach it would increase the cost of development, ultimately resulting in higher housing prices. This is why Calgary and Edmonton have never used the inclusionary housing provision in the Charters. They don’t want to drive up development costs. They don’t need this provision, so we are removing it from the Charters.

Charter update: Building code

Another big change we are making to the Charters is to remove Edmonton and Calgary’s authority to create bylaws on environmental matters that are already regulated under the Safety Codes Act. Right now the big cities can create bylaws that would require all construction within their jurisdictions to adopt a standard for energy efficiency that is more stringent than the current building codes. Alberta needs to be more consistent.

Some readers may be aware that Municipal Affairs has been working to update the building, fire and energy codes in a way that best fits the needs of Albertans, which involved working closely with industry representatives, safety agencies and technical experts across the province. We’ve recently completed that work, and the new Alberta editions of the National Building Code and the National Fire Code as well as the National Energy Code for Buildings, will come into force on May 1, 2024.

For energy efficiency, we are adopting Tier 1, which will reduce emissions in housing and buildings while prioritizing housing affordability. This incremental approach will allow industry groups to prepare for more stringent energy efficiency without significantly increasing the cost of construction in the short term.

The key to success is to keep the building code consistent. There can and should be only one minimum standard to which all buildings in Alberta must be constructed. Right now this is the case for every municipality in Alberta; the change to Edmonton’s and Calgary’s Charters will ensure there is one uniform standard across the province going forward.

Now this does not mean an individual property owner can’t build to a higher standard of energy efficiency. Of course they can! If they want to, property owners (including Calgary and Edmonton) can build to a higher standard of energy efficiency or safety than required by the provincial building, energy, or other safety codes. These are individual choices and the government is not prohibiting them.

What we are saying is that Calgary and Edmonton cannot require all buildings within their jurisdictions to be built to standards that deviate from the provincial building and energy codes. If they want to require an energy efficiency standard that is greater than Tier 1 for the construction of city property, like a library or a swimming pool, they continue to have that right, just like any project proponent. But they can’t force a builder or a property owner to conform to a higher standard for their own homes or buildings.

There is only one building code in Alberta. That’s what property owners and residents expect of their local and provincial governments, and Municipal Affairs has worked hard to deliver. So we are removing from the Charters the authority to create a building code bylaw that would cause confusion and potentially increase the cost of new housing for Edmonton and Calgary families.

What happens next?

As noted above, drafts of the updated City Charters have been posted on the government’s website for 60 days, as required by the regulation. I invite everyone to have a read and build our collective understanding of how the relationship works between Alberta’s government and the 2 big cities.

Calgary and Edmonton continue to be major economic and cultural drivers for Alberta, and home to more than half of our population. The City Charters continue to be effective tools for enabling the 2 big cities to deliver effective local governance to the populations that we all serve. Alberta’s government will continue its work with Calgary and Edmonton to see the updated Charters are implemented successfully, striking the right balance for housing affordability and sustainable growth.