"When it comes to house prices, here's how much location matters" was the title of a Maclean’s article in their November 17, 2014 edition. The story looked at how Canadian homebuyers in Vancouver, Toronto, Montreal and Calgary can save thousands of dollars by buying a home further away from downtown. You don’t have to be a rocket scientist to figure that out. Most Calgarians and I expect those in other cities figured that out a long time ago.

But it was interesting to see that in all the cities except Calgary, the savings increased with every 10 minutes further you lived from downtown. But in Calgary, the price dropped from an average of $665,500 10 minutes from downtown to $515,900 if you lived 20 minutes from downtown and stayed in the $500,000 to $550,000 range until you got 50 minutes away. Calgary’s big ring of established communities with similar housing stock in the 20 to 40-minute commute range to downtown, making them very attractive to downtown professionals with their higher than average salaries, stock options and profit sharing.

Majority of Calgarians simply can’t afford to live in established neighbourhoods.

Do the math and you quickly find out the majority of Calgarians can’t afford to live in the established neighbourhoods. A family income of $100,000 (Calgary’s median family income was $98,300 in 2012, Statistics Canada) will support a mortgage of only $300,000. I am told 3 times your gross income is a good benchmark for how much mortgage you can afford. If we assume a generous down payment of say 20%, that means 50% of Calgarians can only afford a house or condo under $360,000.

A quick review of the City’s average home sales costs by community shows that in the southwest has no communities with an average selling price in the $360K range and there are only two in the northwest. In the southeast, there would are three or four, while in the northeast almost all of its communities are close to the $360K mark. I realize that even with an average selling price over $360K in established neighbourhoods there will be many homes under that price, but most of them will be smaller and in need of renovations that will bring the price over the affordability of most Calgarians.

So While the City of Calgary wants to encourage more Calgarians to live in the established neighbourhoods in the inner city west of the Deerfoot Divide, most Calgarians simply can’t afford the $500,000+ cost. In fact, only 21% of Calgary’s households have an income over $150,000 which in turn would allow them to have mortgage of $450,000 which combined with say a $100,000 down payment would, get them a $550,000 house.

If only 20% of Calgarians can afford to live in established communities, this means we have to accommodate 80% in the suburbs until we can find a way to build affordable housing for the average Calgarian in established communities.

A street of older mid-century homes in one of Calgary's established communities on 50 foot lots. Typically they sell for $500+ to developers who knock them down and build a two story infill that is 1,800+ sf and better meets the needs of a mode… — A street of older mid-century homes in one of Calgary's established communities on 50 foot lots. Typically they sell for $500+ to developers who knock them down and build a two story infill that is 1,800+ sf and better meets the needs of a modern family.

**A typical street of new infill homes in an established community. Prices start at $700,000 for older infills with new ones starting at $900,000.**

**A new duplex in the inner city starts at about $900,000 as they are about 200sf larger than detached infills.**

**These two new infills on a 25 ft lot sell for $900,000 for 1,800 sf. A similar size house and lot in the 'burbs sells for about $450,000.**

New condos in established communities start at $300,000 for studio, $400,000 for one bedroom and $500,00+ for a two bedroom. — **New condos in established communities start at $300,000 for studio, $400,000 for one bedroom and $500,00+ for a two bedroom.**

Why are we always focused on downtown?

However, my biggest beef with this study - and most of these kinds of studies for that matter is they are only looking at the downtown commuters, which represents only 25% of Calgary’s commuters. For the majority of Calgarians, their decision where to buy a house isn’t governed by the commute to downtown, and that majority is getting larger every year.

The City’s most recent job growth numbers from 2006 to 2011 show that downtown job growth was only 11.5% of the new jobs in the city, while growth in the City’s industrial areas accounted for a whopping 77% of the job growth. Is it any wonder there is a huge demand for homes and condos in the southeast and the northeast near the industrial and warehouse developments? In the ‘90s GO Plan, the City’s goal was to get people to live closer to where they work. That being the case, we need to build more communities near our industrial lands.

The majority of Calgarians don’t need to live near downtown.

Retired Calgarians can live anywhere; commuting time is not a factor. Many retirees I know have a goal of not leaving the house until after 9 am and being home before 3 pm leaving the roads available for those who need them.

For those working in and around the airport, the ability to live in the far northeast and northwest means minimal time on the Deerfoot and a shorter commute time. Living east of the Deerfoot in the far southeast also results in a short, 10 to 20-minute commute for those who work there.

With only one leg of the LRT serving the NE and none the SE the quadrant, workers in our major industrial, transportation and distribution centres have limited transit access and so the majority must drive to work.

Unfortunately, the large tracks of land needed for industrial and warehouse operations don’t create the concentration of jobs in a small geographical area needed for effective rapid transit. Transit only works well for downtown, and a few other places like large employment centres (e.g. university, hospitals), but not for the majority of Calgary workers.

Calgary’s urban planners and politicians must realize that today’s Calgary is as much a distribution warehouse city as it is an oil & gas downtown office city. Did you know that transportation & manufacturing (mostly east of Deerfoot) accounts for 125,000 jobs in the city, while oil & gas adds up to only 72,000? The NE with growth of the Calgary International Airport has evolved into a major economic engine for the city and could in the future rival downtown. Did you know that there are more hotel rooms in the northeast than in downtown?

Why Calgarians love the burbs.

While many young urban singles are willing to live in a 500-square foot home and pay $450+ per square foot that won’t work for families. A young family of four wants 2,000 square feet (the same 500 square feet/ person), which means they can not afford the $500,000+ an older established neighbourhood home, but the home doesn’t meet their needs. As a result, the majority of young Calgary families are forced to go to the edge of the city where starter homes or larger condos can be had for $300,000 to $400,00 and don’t need any major renovations.

Did you know 67% of Calgary households have children and another 2.3% are multiple family homes? It is therefore not surprising 62% of Calgarians want a single-family home, 16% want a semi-detached home and only 22% desire a multi-family one (Calgary Growth Benchmark, 2014). Currently, there are more multi-family homes being built than single or semi-detached. Obviously, since supply isn’t meeting demand, the cost of single and semi-detached homes will only increase, making them even less affordable.

I know some will ask, “Why does a family have to be raised in a single-family dwelling?” And, indeed some parents will choose a semi-detached or multi-family home but most desire a single-family home where the kids to run, play and make noise without disturbing the neighbours. As well multi-family buildings don’t meet the storage needs for an active family in a four-season city like Calgary.

**Suburban population growth from City of Calgary's "Suburban Residential Growth 2014 -2018 Report.**

**Land Supply (City of Calgary, Suburban Residential Growth 2014 - 2018)**

**Residential Building Permit Applications, City of Calgary, Suburban Residential Growth 2014 - 2018 Report)**

The BIG Question.

Should we be pushing families to live in multi-family housing in established neighbourhoods they can’t afford and aren’t any nearer to work? I fact, if we get more people to move into the established neighborhoods west of Deerfoot, we will be encouraging more people to drive to work, creating more traffic issues as there is no effective transit to their jobs in the far northeast and southeast.

Calgary needs more mixed-use, mixed density urban style development on the edges of the city like Brookfield Residential's SETON. — **Calgary needs more mixed-use, mixed density urban style development on the edges of the city like Brookfield Residential's SETON.**

A Radical Idea.

Instead of trying to get more people to live in the established communities (where the existing community members don’t necessarily want more density and the majority of Calgarians can’t afford to live there anyway), we should focus on how we can improve the live/work/play opportunities in Calgary’s northeast and southeast quadrants of the city.

In the 20th century urban thinking was to separate housing from employment centers so most of the housing was west of the Macleod and Edmonton Trails and the jobs east. By the late 20th Century the Deerfoot became the dividing line between living and working. In the 21st Century, we need to look at integration, not separation of live/work centres. We need to rethink the balance between inner city and suburban growth. We need to think of suburban growth as mega infilling projects.

We need to think of Calgary differently, as a federation of five different economic zones - NW, NE, SE, SW and Inner City. Each one needs to have its own growth management strategy (land use, transit, roads, recreation, retail) that capitalizes on each zone’s unique aspects as a place to live, work and play.

By Richard White, November 26, 2014.