The spectre of yet another shift of the burden of government to the private sector arose earlier this winter when city hall suggested the housing industry may have to, as the Calgary Sun put it, “reach deeper into their pockets.” The reason for this, according to Mayor Dave Bronconnier, is that the city is increasingly incapable of keeping up with the demand for infrastructure (roads, fire halls, parks, etc.) in new communities. Fair enough. Further, the mayor indicated that “current property taxpayers shouldn’t have to pick up a disproportionate share of the load.” Resident Calgary taxpayers such as those in Crescent Heights, in other words, shouldn’t have to pay more taxes up front for the infrastructure required by people buying in new areas such as Symons Valley. No one is sure why this should be other than that residents of older neighbourhoods feel they are entitled to be excluded from the upfront costs of new civic growth. We do not expect, for instance, that people who have newly arrived in this province should pay higher health-care premiums or income taxes even though the fact of their arrival increases the burden on the healthcare system. And those of us who do not live adjacent to a river do not resent that we are bearing a disproportionate share of the costs of maintaining flood control on the Elbow River – something that benefits only those who live along the river. Somehow, though, we do resent new neighbourhoods being built in Calgary and resentment, in this case, creates opportunity. Among the reasons for Calgary’s unusual surge in real estate prices in 2006 was a shortage of serviced (sewer and water) land. This took place due to delays in negotiating annexation from neighbouring municipalities. Annexation is required before the city’s sewer and water services are extended, which allows the city to maintain control over the supply and therefore cost of serviced land. The annexation delay therefore created a shortage of supply that inflated housing prices. Lack of affordable housing worsened the shortage and the cost of labour. And the high cost of labour in a major contributor to the city’s difficulty in keeping up with the costs of providing new infrastructure. So despite the fact that bureaucracy enhanced its own problems by failing to properly manage the availability and supply of serviced land, it is the housing industry that apparently will be forced to pick up the tab. Or so it seems at first glance. However, if the city increases the already-substantial levies paid by developers, the latter will either pass those costs on directly to the buyer/consumer or choose to do business in other cities or municipalities. Passing the costs along will immediately inflate the price of new housing while chasing developers (most of whom are incensed but too bullied by city hall to do anything about it) elsewhere will shorten the supply of new housing which will also increase housing prices. Either way, prices still go up. Fortunately for the bureaucracy, many media believe that the public sector is inherently good and any new plan will be trumpeted as a victory for the taxpayer whose “burden” is passed along to the “corporate” or “business” world. Few will pay attention to reality: the shift of this “burden” simply increases the cost of doing business in Calgary and that cost will in turn be passed along to the consumer/taxpayer. Alas, there is no money tree. Calgary property taxes are based on market value assessments. So when prices increase, which they will, older neighbourhood taxpayers will still pay more even if the “burden” of new infrastructure is “passed along.” You have to admire the genius of the plan if not its transparency. The city gets more money up front from developers and it still gets more revenue from higher taxes due to the inflation of housing prices even though tax rates themselves stay level. In the end, the city still gets more of your money. The only real burden that gets shifted is the responsibility for doing so.