Environmentalism and Edmonton Land Use Politics
By William Walter Kay
Environmentalism is a social-system-in-waiting. The international environmental movement is a parallel government complete with ministries. Presently, attention is focussed on the movement’s energy (Climate Change) boondoggle. Less is known about the movement’s primary portfolio: land. These five articles examine how environmentalism catastrophically spiked land development in one city, Edmonton. While Edmonton’s story is an egregious example of green malfeasance, it is not unique; hence, these articles may serve as a template for studying land use politics in other lands.
TABLE OF CONTENTS
70 Square Kilometres Here, 70 Square Kilometres There
Residential Construction's Land Scarcity Blues
Colonial Edmonton's Land Use Directives
Edmonton's Environmentalist Government
Onerous Rents, Inflated House Prices, Unnecessary Unemployment, and Clouds of Mosquitos
70 Square Kilometres Here, 70 Square Kilometres There
In October 2011 the Edmonton Journal ran two articles, Edmonton is running out of space and Limits to Growth on the Horizon, wherein staffer Elise Stolte treated Edmontonians to politically correct, if mathematically incorrect, Malthusian treatises.
First, a geography primer:
City of Vancouver, population 600,000, covers 114 square kilometres. Greater Vancouver Regional District, population 2.3 million, covers 2,700 square kilometres.
Toronto, population 2.5 million, covers 630 square kilometres. Greater Toronto has 5.5 million people spread over 7,125 square kilometres.
City of Edmonton, population 785,000, covers 700 square kilometres. Edmonton Census Metropolitan Area has 965,000 people spread over 9,500 square kilometres.
The built-up areas of Edmonton and surrounding towns are a tiny archipelago amidst an ocean of undeveloped land.
Also note: the North Saskatchewan River divides Edmonton in two. Edmontonians’ total consumptive use of this river (water removed and not returned) is less than 3% of the river’s flow. There are two larger rivers north of Edmonton. Oil, coal, and gas reserves located within a 400 kilometre arc around Edmonton are among the largest on the planet.
As far as land, water, and energy are concerned, there are no limits to growth on Edmonton’s horizons.
The dread expressed in the above-referred-to articles is that 15 years from now Edmonton’s “planned neighborhoods” might be full of houses. The articles concede that in addition to the “planned neighborhoods” there remains within city limits another 73 square kilometres slated for development. This additional area is expected to fill up in 35 years, after which city planners, and their counterparts from surrounding counties, will confront the mainly barren 8,800 square kilometres outside city limits yet within the Edmonton Census Metropolitan Area.
More importantly, within Edmonton city limits, vast expanses are arbitrarily withheld from development. Edmonton has 460 parks. The 22 parks strung along a 48 kilometre stretch of the North Saskatchewan riverbank cover 74 square kilometres and are the largest urban park system in North America. While 43% of the river valley is “protected”, environmentalists fret about valley regions in south Edmonton still under “development pressure”.
Parks have gazebos, band-shells, tennis courts, ball diamonds, boat launches, golf courses, bike trails, and picnic tables; however, these facilities usually cover only small portions of the park. An exception, Fort Edmonton Park, is a built-up tourist centre with rides and a hotel. On the other hand, Laurier Park, on the north bank of the river, is a mainly empty 83 hectares. William Hawrelak Park covers 130 hectares including a 10 hectare slough. Louise McKinney Park hoards 13 hectares of prime downtown real estate.
Edmonton also boasts an array of “natural areas.” While some natural areas are inside parks and some are adjacent to parks, a natural area is not a park. Natural areas are: “land and/or water especially dedicated to the protection and maintenance of biodiversity and nature-related cultural resources.” Natural areas have no gazebos.
A 1986 city-financed eco-inventory discovered 1,000 natural areas within city limits. The surveyors drew up a short list of 85 natural areas, collectively covering 13 square kilometres, deemed prime for conservation. By 2005 the City had protected all of 30 of these sites and parts of 17 others.
A 2005 re-assessment found 424 natural areas within city limits collectively covering 72 square kilometres. This land is disbursed as: a) unprotected river valley (47%); b) protected city-owned river valley (24%); c) privately-owned and protected river valley and Tablelands (3%); and d) unprotected Tablelands (25%). (“Tablelands” is an eco-marketing term for the plains above the river.) The 30 natural areas showcased in the Edmonton Conservation Atlas range in size from 1 to 21 hectares. Six cover over 10 hectares apiece.
The three above-underlined 70-plus square kilometre collections of land partially overlap with one another; hence, do not constitute 210 square kilometres of vacant land. On the other hand, these areas do not constitute a full inventory of vacant or under-utilized land within Edmonton City limits. For instance, there are innumerable sprawling golf courses, including four massive ones owned by the city. As well, the University of Alberta’s south campus contains sweeping empty swaths.
Nevertheless, how accommodating is 70 square kilometres?
The land portion of Manhattan Island is smaller than 60 square kilometres yet houses 1.5 million people in coveted abodes.
Edmonton planners presume a new residential subdivision will have 16 single-family detached houses per hectare (100 hectares equals one square kilometre). In reality new developments often have 18 to 25 houses per hectare. 20 houses per hectare equals 2,000 houses per square kilometre or 140,000 houses per 70 square kilometres. At present, there are 179,000 single-family houses within City limits.
City planners presume medium-density (multi-unit) zones average 57 dwelling units per hectare. Thus 70 square kilometres zoned medium-density could host 400,000 dwelling units; or enough apartments to accommodate Edmonton’s entire population.
To estimate what could be done with 70 square kilometres zoned “high-density”, one should look at the two high-density projects City Council is planning on city-owned land. On the former Municipal Airport Lands, the city plans to house 30,000 people on 217 hectares. This density will be achieved despite half of said lands being left as “green space”. At the City’s Fort Road development 8 hectares of a former industrial area is being converted into a 3,000-resident neighborhood.
Thus, at the density levels City Council contends will provide exemplary urban living, 70 square kilometres could house over one million people.
Despite the fact that City Council could easily toss up 70 square kilometres; and despite the fact that such an area would meet Edmontonians’ housing needs for the foreseeable future; there is a wide-spread misperception of land scarcity among Edmontonians. More importantly, prices Edmontonians pay to own or rent land is profoundly jacked up by this manufactured land scarcity.
Residential Construction's Land Scarcity Blues
Despite political constraints, residential construction soldiers on in Edmonton. In October 2011 Edmonton had 1,250 housing starts of which 550 were units within multi-unit buildings. From January to October 2011 Edmonton had 7,960 housing starts, down slightly from the same time period in 2010.
City planners carved Edmonton into 260 neighborhoods. Official discussions of residential development make a sharp distinction between the construction going on in older, built-up neighborhoods and construction going on in new subdivisions.
“Mature neighborhoods” are neighborhoods completed before 1970. Edmonton’s 109 mature neighborhoods form a circle around the downtown core. Of the approximate 2,200 building permits issued annually for mature neighborhoods over the last decade, 80% were for alterations or demolitions; 20% were for new dwellings of all types, including secondary suites. (Prior to the 2007 “housing crisis”, secondary suites were illegal.)
Net unit gain (construction minus demolition) within mature neighborhoods peaked in 2002 at 1,800 dwelling units and troughed in 2009 at 200 units. In 2010 net unit gain was 1,021. Mature neighborhood residential investment in 2010 ($270 million) was 15% of city-wide residential investment ($1.8 billion).
Edmonton has 82 new neighborhoods subject to Area Structure Plans (ASP) located in five large regions near the corners of city limits. Typically, after a syndicate of private developers cobble together a sufficiently large patch of land, they sit down with city planners to work out an ASP. The process is completed when the land is legally constituted into a subdivision and the lots are recorded in the Land Title Office. If the project is to be inhabited by more than 4,000 people, then a second approval process, a Neighborhood Structure Plan, is required.
Sitting vacant, within these 82 planned neighborhoods, is enough land for 60,000 single-family detached houses. At current rates of absorption (3,500 lots per year) this should last 17 years. 29 of these 82 neighborhoods are 95% full of houses; 11 of these neighborhoods have yet to see a foundation poured.
Not all 60,000 lots are serviced. “Servicing” is divided between “deep” (sewers, water mains, etc.) and “shallow” (gas, electrical, etc). At present, 4,500 vacant single-family house lots in planned neighborhoods have deep servicing and roads.
The annual number of new lots serviced peaked in 2005 at 5,900 and troughed in 2009 at 600. During the 2000-2010 decade 38,000 lots were serviced. 4,500 lots were serviced in 2010. The number of single-family house building permits issued per year generally corresponds to the number of lots serviced in that year. A serviced lot does not long remain vacant.
Much shallow servicing is done by EPCOR and ATCO. EPCOR builds and operates electrical and water systems in many locales, but their base is Edmonton where they have 300,000 customers. The City of Edmonton is EPCOR’s sole shareholder. Dividends, a matter of civic policy, average $130 million a year. ATCO, a large private Alberta-grown company, distributes much of Edmonton’s natural gas.
Decisions about where and how much servicing to do is a veiled interplay between city planners, private developers, and utilities. The process, while apparently private developer initiated, is state orchestrated.
The City constrains growth both by withholding city-owned land and by zoning privately-owned land in ways that thwart development. City publications stress the virtues of preserving farmland within city limits.
“Horse Hill” is the largest tract on Edmonton’s north-side without a neighborhood plan. Stantec Consulting, on behalf of Walton Developers, is working on a Horse Hill plan. Stantec is clashing with the environmentalist Greater Edmonton Alliance and with the North East Edmonton Agricultural Producers. Members of the latter group own 400 hectares scattered around Horse Hill.
While the city pushes multi-unit buildings, the market favours single-family houses. (80% of developer-led planning is for single family houses.) Mayor Mandel claims high density must be forced onto Edmontonians but in the same breath worries such an imposition will drive people into adjacent jurisdictions. He places his hopes for high density in the city-owned Municipal Airport Lands. However, here the planning process, scheduled to go on until July 2013, is entangled with green initiatives such as Light Rapid Transit and geo-thermal heating.
It is not as though the city never sells land. They do toss out crumbs. The city’s website hawks a few parcels along with this caveat:
“…prices shown are deemed to be reasonable, but are subject to change without notice to reflect the City’s opinion of fair value at time of sale…”
Land deals under $3 million can be made by officials in the city’s Sustainable Development Department. Larger sales must be approved by Council. In all instances, care is taken not to undercut market prices.
The City currently finds itself in possession of three old houses which they are offering for sale as follows: one on a 515 square metre lot for $323,000; one on a 584 square metre lot for $378,000, and a 1,037 square foot house with a cracked foundation for $270,000.
Several properties zoned “industrial” are for sale, but not all have prices listed. At the Rampart industrial site a 1.1 hectare parcel is going for $1.5 million. At the Pylypow industrial site there is a 1.8 hectare parcel for $2.8 million, and two 0.7 hectare parcels for $1.35 million apiece. Elsewhere there is a 0.7 hectare parcel zoned “light industrial” for $1.3 million.
A greater price is expected for land the city has magnanimously zoned “high density with commercial at grade”. The City is selling 2.1 hectares of such land in the far northwest for $5.2 million. At their Fort Road mega-project they are offering 1.4 hectares for $6.4 million. Two other high-density parcels are on offer: $1.15 million for 700 square metres; and $2.5 million for 2,500 square metres.
The above-mentioned properties, cumulatively covering 10 hectares, appear to be just about all the land the city is currently willing to part with. The city owns tens of thousands of vacant hectares.
Colonial Edmonton's Land Use Directives
On November 12, 2011 the National Post ran a curious piece by career eco-tart Vanessa Farquharson entitled, Why Toronto Should Be More Like Edmonton. Amidst praise for Edmonton’s myriad green initiatives, Farquharson extolls Edmonton’s humungous riverside park network, which she dubs: “the Ribbon of Green”, “the jewel of the city”, and “Edmonton’s soul”.
To unfurl the mystery as to why Canada’s sentinel of free enterprise should champion this criminal suppression of entrepreneurial opportunity, one should consult the candid account of Canadian urban land economics found in Brookfield Asset Management’s Emerging Trends in US Real Estate 2012. From this elite investment intelligence firm we learn:
- Canadian municipalities discourage urban sprawl with growth boundaries (“European-inspired green belts”). New construction is also stymied by cut-backs at planning agencies, lengthened approval processes, sky-rocketing fees and surcharges, high infill land costs, and onerous parkland set-asides. Such policies are jacking land prices to “eye-popping numbers”.
- The financial institutions and pension funds that own most of Canada’s commercial buildings are very happy with their “steady-state equilibrium” of 90% occupancy.
- Real Estate Investment Trust (REIT) and pension fund managers “work cozily in an oligopoly to avoid over-building”.
- Shopping centre owners benefit from planning controls that prevent “too much commodity development”.
- Institutional investors and REITs own most of the office towers in Toronto and Montreal and “have no intention of letting go of these cash-flowing babies”. Toronto’s office market is “bullet proof”. The clique owning 75% of downtown Toronto: “work in concert to keep vacancies low and avoid shooting themselves in the foot.”
- 50% of Canada’s industrial floor space remains in Greater Toronto while Edmonton’s “industrial market tightens to microscopic vacancies.”
In other words, Canada has a “landed interest”, i.e. an oligopolistic network of land-owners who collude to suppress what they deem unnecessary construction.
The US-based Building Owners and Managers Association (BOMA) International is a rare visible manifestation of North America’s landed interest. BOMA International lobbies on behalf of 16,500 companies, spread over 100 local associations, who control 9 billion square feet of commercial real estate.
BOMA Canada, which represents 3,200 businesses, is chaired by an executive from Cadillac Fairview – owner of 87 commercial properties worth $19 billion. Only eight of Cadillac Fairview’s properties are in Alberta – none are in Edmonton. Cadillac Fairview is 100% owned by the Ontario Teachers’ Pension Plan.
BOMA Edmonton’s 14-member board is dominated by 11 representatives of the “oligopoly” – Great West Life, Bentall Kennedy, Colliers International, Oxford Properties, etc. (The latter owns 250,000 apartments.) None of these companies are headquartered in Edmonton. Four companies with reps on BOMA Edmonton’s board contributed to Mayor Mandel’s recent election campaign. (This is a small fraction of the property-involved companies among Mandel’s contributors).
Thus, the land lobby within Edmonton consists of bureaucratic drones operated by remote control from distant metropoles. The controlling minds of these bureaucracies have no particular interest in seeing Edmonton boom and bloom. The same can be said of Edmonton’s mass media.
Edmontonians’ thoughts about Edmonton politics are managed by the mainstream media. The portion of the mainstream media making any mention of Edmonton is owned by seven organizations: Shaw, CBC, BCE, Thomson, Postmedia, Quebecor, and Rogers. None of these companies are headquartered in Edmonton.
Four daily newspapers basically own the local market: Edmonton Journal and National Post (both Postmedia), Edmonton Sun (Quebecor), and Globe and Mail (Thomson/BCE). Local television news coverage emanates from Edmonton affiliates of CTV Network (BCE), Global TV (Shaw), City TV (Rogers), and the CBC. Calgary-based Shaw owns the local cable system and produces television and radio programs. CBC-Radio is probably the most listened-to local news radio station. Two of Toronto-based Rogers’ 51 radio stations operate out of Edmonton. Maclean’s magazine (one of 70 magazines published by Rogers) is widely read in Edmonton.
Postmedia owns a dozen major Canadian newspapers. While their flagship National Post often criticises the environmental movement, their Edmonton Journal has a greenish tinge.
Postmedia’s Chairman, Ron Osborne, is Chairman of Sun Life and a trustee of RioCan. Postmedia’s President and CEO, Paul Godfrey, is RioCan’s Chairman.
Toronto-based Sun Life employs 7,500 people to manage $470 billion in assets for various annuities, pension funds, mortgage companies, and mutual funds. Much of this wealth is in real estate and mortgages.
RioCan, Canada’s largest REIT, owns 45 million square feet of commercial real estate. Their specialty is shopping malls anchored by large grocery stores. 213 of their 295 properties are in Ontario and Quebec; 30 are in Alberta. RioCan boasts a 98% occupancy rate.
Also on Postmedia’s board is Peter Sharpe, President and CEO of Cadillac Fairview. Postmedia’s board has no Albertans.
Canada’s financial, land, and media oligopolies dictate Edmonton land-use politics. These enterprises, although well-ensconced in Edmonton, are wedded to distant, rival jurisdictions.
RioCan, Cadillac Fairview, Oxford Properties, etc., and the banks with which they are intertwined, have an agenda. They want a highly controlled expansion of land development; one that does not overwhelm the market with new buildings, i.e. a sustainable development. They want to contain the industrial and head office markets within the Toronto-Montreal corridor. They have no desire to see a liberalization of Edmonton’s land use policies; quite the contrary.
Thus, we have Farquharson’s ode to Edmonton’s 74 square kilometre stretch of bush and bugs – an area that might eclipse downtown Toronto but for the policies of Edmonton’s environmentalist government.
Edmonton's Environmentalist Government
The City of Edmonton oozes environmentalism from innumerable documents, programs, and departments. City Council brags about being the nation’s leader on several environmental fronts.
The Environment section of the City’s website has 49 sub-sections. As ever, basic services (litter pick-up, water drainage, sports-field maintenance, etc.) are submerged in the environmentalist agenda. Programs unmistakeably of the green agenda are: a) conserving green spaces; b) reducing greenhouse gases; c) Be Idle Free; d) Eco-vision Reports; e) environmental events and awards; f) Zero-footprint; g) Loco-motion; h) community stewardship; i) Conservation Atlas; j) biodiversity action; and k) master naturalist program. “Urban forestry” and “gardening” are examples of basic services bent toward the green agenda. The same could be said for Edmonton’s entire land-use planning process.
City operations like John Janzen Nature Centre, Valley Zoo, Muttart Conservatory, and Neighborhood and Community Development each have enviro-activist programs. City-owned EPCOR Utilities Inc. is a winner and purveyor of enviro-awards.
Keeping track of the city’s green micro-departments (Conservation Assistance, Biodiversity Office, Environment Office, etc.) is difficult due to constant bureaucratic re-shuffling.
The City’s Natural Areas Conservation Office’s mission is, in part, to build “stewardship capacity” among those “who share the passion”. The Office’s master’s naturalist program provides prospective activists with 35 hours of training before dispatching them to do 35 hours of enviro-activist volunteering.
The Natural Area Reserve Fund receives $1 million a year from the city to acquire sensitive areas. The Fund currently contains $7 million.
The Parkland Acquisition Fund receives money from development levies and from sales of municipal reserve land. (Alberta’s Municipal Government Act requires major developers to set aside 10% of their land. Some give cash in lieu.) The Fund currently has $11 million.
Edmonton’s official “community partners” include: Alberta Land Trust Alliance, Alberta Water Council, Alberta Riparian Habitat Management Society, Alberta Environmental Network, Edmonton Nature Club, Edmonton Area Land Trust (EALT), Edmonton Naturalization Group, Evergreen, and Federation of Alberta Naturalists. The City launched EALT with a $2.5 million endowment in 2006 after a two-year consultation with local environmental groups.
The City has formal relationships with four international environmental groups; notably, the German-based 1,220-chapter International Council of Local Environmental Initiatives. Edmonton has signed a number of global enviro-treaties (IUCN’s Countdown 2010, International Year of Biodiversity, etc).
Among the environmental committees embedded in city decision-making processes are: Environmental Policy Leadership Committee, Renewable Energy Task Force, Green Building Task Force, Environmental Advisory Committee, and Natural Areas Advisory Committee. There is also an Expert Panel entirely comprised of career envirocrats like Professor David Schindler.
The Natural Areas Advisory Committee’s guiding affirmation is:
“We envision a system of conserved natural areas, ecologically and effectively managed, connected to the ravines and river valley, linking the natural and regional green spaces and regional natural areas and supported by the community of Edmonton as a valued asset.”
The City’s numerous Natural Connectivity Conservation Plans, Biodiversity Action Plans, Biodiversity Reports, etc. could fill bookshelves.
The Environmental Advisory Committee’s 166-page Environmental Strategic Plan 2006 camouflages its green agenda amidst chapters dealing with basic services. However, there is an entire chapter on Climate policy. The document lists the uses of natural areas as: a) meeting Edmontonians’ spiritual needs; b) educational and research venues; c) improving the health of birdwatchers; d) water cleansing; e) climate stabilization; and f) wildlife habitat. Another city document, The Way We Green, adds “medicines and wild food” to the list of ecosystem services provided by natural areas.
City publications betray an awareness that blocking development for wilderness’ sake is not part of Edmonton’s heritage. The Natural Areas and Urban Biodiversity section of the city’s website contains this gem:
“In the last several decades, Edmonton has lost many natural areas as land has been converted for development. However as the incredible value of natural areas became clear, the City made it a priority to protect as many natural areas as possible. The surest form of protection is to purchase natural areas for conservation, and in 2009 the City borrowed $20 million to do this...”
The City’s State of Natural Areas 2006 report adds:
“For most of Edmonton’s first century conservation efforts were focused on discrete areas and manicured parks within the North Saskatchewan River Valley and ravine system...”
Not until the 1980s was attention given to “natural areas” or emphasis placed on creating contiguous green zones. Now the city is smitten by “ecologicalconnectivity”, i.e. the creation of wildlife passage ways between green spaces through signage, underpasses, strategic flora and, of course, through acquiring more green space.
Conserving Edmonton’s Natural Areas, co-written in 2001 by city planners and the Alberta Environmental Network, targeted 62 additional sites for conservation.
The 48-page Natural Connections Strategic Plan 2007, co-written by the Natural Areas Office and local environmentalists, highlights a quote from Aldo Leopold on the immorality of treating land like a commodity. The authors bemoan how 23% of the land listed in a 1993 inventory of Tableland natural areas has been “lost to development”. (21% of this land has been protected; however, 56% remains “vulnerable”.) The Plan champions “ecology connectivity”.
In the 90-page The Way We Green (approved by Council in 2011),economic growth is not considered a goal but rather a “challenge”. Sprawl is bad; density is good. The “price system” is inherently flawed; hence, the city must intervene in the market to increase suburban land prices. The Way We Green advocates increasing the size and number of protected natural areas and expanding the urban forest.
(To preserve Edmonton’s 250,000-tree forest the city adopted a “no net loss of trees” policy. A Tree Management Reserve Fund replaces trees removed by city crews during routine maintenance and development.)
The Way We Green repeatedly cites a companion document, The Way We Grow. Both documents share this strategic objective:
“The City protects, manages, and integrates natural wetlands into new and existing developments as key assets in Edmonton’s ecological network.”
The 182-page The Way We Grow (a.k.a. Municipal Development Plan Bylaw 15100, passed May 2010) predicts the City of Edmonton will have one million residents by 2040 – a rather under-whelming growth rate. Nevertheless, to brace for this spectre, the document pushes increasing residential density and expanding parks. Two indicative quotes from The Way We Grow:
“Edmonton protects, preserves, and enhances its natural environment by maintaining the integrity and interconnectivity of its natural areas, river valley, water resources, parks and open spaces recognizing that these elements form a functioning ecological network within the Capital Region.”
“Unfortunately, natural areas throughout Edmonton are under tremendous pressure as a result of urban, commercial and industrial development, with a majority of the natural areas in the city unprotected…”
The Way We Grow’s 500-word Managing Growth blurb mentions “sustainable” 11 times and “environment” 3 times. The Natural Environment chapter fires off 50 bullet-point sentences that use “ecological” 17 times and “acquire” 9 times. The city will “acquire the most ecologically sensitive areas in Edmonton.” The city will “promote innovative ways to acquire” parkland. The city will “acquire linkages” between natural areas. The city will “acquire wetlands and buffers.” The city will “acquire land in the North Saskatchewan River Valley…”
The city plans to use more ecological knowledge. The city plans to force developers to incorporate ecological design principles. Greater efforts will be made to preserve farmland within city limits. The city plans to reintroduce native and semi-native vegetation and to restore degraded natural areas. The city will “ensure that the North Saskatchewan River System remains primarily an area of unstructured, low intensity and passive recreation.”
In 2010 the city asked 1,000 Edmontonians if they thought Edmonton faced serious sustainability challenges. One-third said “yes.” One-third said “no.” One-third were neutral. To the pollster’s dismay, the survey showed the passionately held views of “activist stakeholders and community leaders” were not held by the public. They mined the results of their survey for clues to help in “overcoming public complacency”. City planners concluded this lack of support for their green agenda is curable through more: public education, capacity building, outreach, incentives, and regulations.
Onerous Rents, Inflated House Prices, Unnecessary Unemployment, and Clouds of Mosquitos
Edmonton’s manufactured land scarcity hurts tenants, home buyers, and the construction industry. On the other hand, it is great for mosquitos.
Contrary to prevailing perceptions about Alberta being a world of homeowners, 40% of Edmonton households are tenants. Within Edmonton Census Metropolitan Area there are 124,000 rented dwellings. These breaks down as: 59,000 apartments, 8,000 rented row-house units, 11,000 rented condos, and 46,000 rented houses. (Statisticians pay little heed to basement suites or government-owned facilities.)
40,000 households, many of them working poor, have incomes below $30,000 yet spend a third of their income on shelter. The waiting list for subsidized housing has 3,000 names and waiting times are three years. 2,500 Edmontonians sleep in the streets. Homelessness doubled in the last decade.
Two-bedroom apartments rent for $1,030 a month. One-bedrooms cost $850. Condos, townhouses, and houses go for around $1,100. Bachelor suites in older buildings can be had for $700. Average monthly rent, for all types of dwelling unit, is $920.
In 2000 a two-bedroom apartment rented for $600 a month. They now cost 70% more. The overall inflation rate for Edmonton over this period was 30%.
Apartment vacancy rates averaged 4.2% in 2010. During the 2007 “housing crisis”, apartment vacancy rates dipped to 1.5%; however a direr situation prevailed in 2001 when vacancy rates were 1%. Apartment vacancy rates peaked in 2005 at 5%. In other words, over the last decade Edmonton’s stock of apartments varied from between 95% and 99% full occupancy – a seller’s market for sure.
Edmonton house shoppers currently confront an average price of $375,000. House prices rose incrementally before 2005 then doubled in three years. (Prices fell 7% in 2009, then plateaued.)
Between 2005 and 2008 the “land” portion of a house’s price rose much faster than the “house” portion. The cost of an empty lot rose 125% during these years.
Wholesale land prices in suburban Edmonton rose from $100,000 per hectare to $625,000 per hectare over the last 15 years. Riverfront acreages, without a house, sell for $650,000.
The city’s website, while not in the business of advertising developers’ wares, does relay that Hollick-Kenyon has 13 vacant serviced lots available for $130,000 apiece while the Legacy Point project has 16 vacant serviced lots available for $150,000 apiece. The city itself has one vacant lot for sale for $168,000.
Prices do not fall from heaven. Prices are a consequence of supply and demand. Edmonton’s $375,000 house prices and $1,000 monthly rents are no exception. In both instances, prices are jacked up by government restrictions on land supply. The city has colossal landholdings, which Council keeps off the market. As well, Council, through zoning bylaws, constricts development of privately owned land.
Although it is difficult to estimate with certainty, the average cost to the city of servicing a new residential lot is probably around $10,000. On city-owned land, $10,000 is how much it costs to place a new residential lot on the market. A commodity with a cost of production of $10,000 sells for $150,000!
What if the city serviced 100,000 house lots and rapidly auctioned them off?
As long as the city recouped its servicing costs at the point of sale, the cost to taxpayers would be zero.
This proposal should not sound alien. Across western North America, cities in their formative years financed and developed themselves through mega land offerings. Between 1890 and 1914, Edmonton’s population exploded from 2,000 to 75,000 largely as a result of a cheap land policy.
Benefits of cheap land policies would be: affordable housing, increased government revenues, and a building boom. Presently, the construction sector employs 12% of the workforce. Building booms spread wealth across entire economies.
The costs of such policies would be: declining land values and lower rents. This is NOT a win-win proposal.
Wide-open zoning and mega land auctions could also be applied to the industrial and commercial land markets. Most Edmonton businesses are tenants. Rent is often their major expense. Businesses would benefit materially and substantially from land-use liberalization. If City Council are serious about attracting investment, they would lower land prices. However, this would lure businesses away from Central Canada, thus conjuring the wrath of the metropolitan landlord oligopoly.
The time has come to expose the mendacity of enviro-activists fighting to save “urban nature”. There is an ulterior motive. Enviro-activists are the irrational goons of metropolitan landlords. The suppression of economic development in Edmonton is not the unfortunate by-product of policies designed to save nature. Suppressing Edmonton’s development is the main strategic objective. Protestations about preserving precious mosquito habitat are a ruse.
This brings us to our last point:
Mosquitos are a major menace and health threat to Edmontonians. Mosquitos is real ways negatively impact our quality of life and create a disincentive for living here.
While we greet the mosquito as an airborne demon, this life-form is an aquatic beast for much of its life cycle. Nutrient rich bodies of stagnant water are essential for mosquito proliferation. The draining of swamps and sloughs is a precondition for mosquito eradication.
Within Edmonton city limits there are dozens of sloughs. These are where the mosquitos come from.
Twelve of the 30 “natural areas” showcased in the Edmonton Conservation Atlas contain large sloughs, notably the 9 hectare Southeast Corner Slough. Enviro-minions embedded in the city government cherish these “sensitive wetlands”.
Draining these sloughs would annihilate the mosquitos and free up hundreds of hectares for new buildings.
Talk of draining these sloughs would ring as high heresy in the ears of our enviro-overlords.
The landlord-capitalist war is centuries old. Entrepreneurs seek ever-cheaper land upon which to build ever-more-delightful buildings. This is a recipe for supply gluts and rock-bottom rents. This does not bode well for a rentier class who eschew risk and cherish fixed income. Thus, landlords seek to corral entrepreneurs and contain expansion.
Although land is not as important a factor of production as it was in the Middle Ages, it remains economically central. Shelter is the largest budget item for most households. Land costs, of one type or another, are a major business expense. Real estate and mortgages are the asset base of most banks and insurance firms. The construction industry, and its suppliers, remains a cornerstone of general economic activity. Despite land’s persisting economic importance, land policy seldom appears as a topic during elections.
Wide-open rezoning of private land and mega auctions of public lands are not socialist proposals. “Liberating the land” is: a) a pro-capitalist platform; and b) unacceptable to the reigning powers. We live in a capitalist society but not when it comes to the most important commodity. Nor can the prevailing ultra-regulated, landlord-friendly system be called socialist. The prevailing land-use program is an example of what was previously called “corporatism”, i.e. a system wherein the dominant privately owned firms within an economic sector collude and dictate state policies governing their sector.
An illusion has been fostered that our governments either do not have coherent land-use policies, or that their land-use policies are the unavoidable default option. Across Canada, and elsewhere, land prices are grotesquely inflated by a systematic campaign to restrict supply. Environmentalists’ irrational love of vacant ground, their religious zeal for the ecology integrity of wilderness, and their infatuation with petite heritage farms on cities’ outskirts play crucial roles in this crusade to suppress land development.
It is a logical proposal that a land-rich, cash-strapped City Council representing a rent-burdened citizenry should sell unused city land. However, selling even a small morsel from a sprawling empty park is considered sacrilege. The environmental movement, and a complicit media, contend the masses share this passion for weed-infested vacant lots. In reality, no one knows how popular parsimonious land use policies are because the reigning powers extinguish meaningful public debate on this topic.
Edmonton is running out of space – Elise Stolte – Edmonton Journal – October 17 2011
Limits to Growth on the Horizon – Elise Stolte – Edmonton Journal – October 18 2011
Farmers, Food Activists, prepare for urban agricultural showdown – Elise Stolte – Edmonton Journal – July 16, 2011
Edmonton’s Suburbs Set for Big Changes, Land Prices, demographics, shifts to greater density – Elise Stolte – Edmonton Journal – October 11, 2011
Fort Road, the Remake – Paula Simons – Edmonton Journal – February 2006
Why Toronto Should be more like Edmonton – Vanessa Farquharson – National Post – November 12, 2011
(City of Edmonton Publications and Web-based Info)
Land Supply in Developed and Planned Neighborhoods 2010
Status of Residential Land in Developed Neighborhoods 2010
Mature Neighborhood Reinvestment 2010
Residential Lot Servicing Forecast 2011-16 in Edmonton’s Developing Neighborhoods
Financing New Sanitary Trunk Construction
Sanitary Servicing Strategy Fund
Edmonton Homeless Commission – A Place to Call Home
Canada Mortgage Housing Corporation Rental Market Report – Edmonton
CMA – Fall 2010 (October) – CMHC Rental Market Stats – Spring 2011
Canada Mortgage Housing Corporation and Statistics Canada – Housing Market Prices in Canada – The Year 2009 in Review
Brookfield Asset Management’s “Emerging Trends in US Real Estate 2012”