Regina Saskatchewan — A policy fellow with the Frontier Centre for Public Policy says the City of Regina needs to rethink its urban planning model or risk driving up house prices even further.
It comes in a report released this week by the centre, focusing on housing prices and the standard of living in Regina.
The report’s author, American analyst Wendell Cox, believes the city is using a housing strategy that “very strictly controls development.”
“That’s the real big problem,” he said.
“We have moved from a situation where the market delivers lots and housing sort of based upon market conditions, to a situation where it is done by a plan.”
If the soaring cost of housing in the Queen City isn’t addressed soon, the benefits of Saskatchewan’s recent prosperity could well be lost, Cox said.
The problem, he said, lies in an unwillingness — or in some cases incapability — of some cities to expand outwards.
Cities that opt for urban containment, such as Vancouver or Portland, tend to be those that witness the highest housing costs, he said.
“For the first 15 years of the Portland urban containment model, ... housing affordability was really fine, because what they did is they made sure they had a huge supply of land for development,” Cox said.
But by 1995, the land had been used up and housing costs in the city soared.
“If you draw the urban growth boundary far enough away that it does not destroy the competitive market for land, that’s fine,” Cox said.
But, if you don’t, he said, housing costs go up and people — and the economy — suffer.
“With the urban containment model, (people) live in smaller houses on smaller lots and they pay more for it and have less money,” Cox said.
“That means there’s less money that is spent on other goods and services that can create jobs.”
But while house prices may indeed go down with an increased supply, the equation is not so simple, said Simon Enoch, director of the Canadian Centre for Policy Alternatives Saskatchewan.
“The question is ... do the costs of continuing sprawl outweigh the benefits?” Enoch said.
With expansive sprawl come increased transportation costs for families and a higher cost of infrastructure for municipalities, he said.
“That’s because (with) established neighborhoods, the infrastructure already exists, so it’s much easier to upgrade, whereas suburban areas you have to start from scratch,” Enoch said.
And some Canadian cities — like Halifax and some suburbs of Toronto — are finding out that the cost of maintaining suburbs can be more than what the city brings in in revenues, Enoch said.
“The City of Halifax established that costs of supplying services to low-density suburbs is actually three times more expensive than supplying the same services and infrastructure to high-density areas,” he said.
And while letting the market decide housing costs can mean lower prices, there’s also the potential for chaos in line with that seen in the United States in recent years, Enoch said.
“So I think there has to be some measure of planning,” he said.
“I guess it’s just trying to strike the right balance.”