Fine Print – What Wenzel et al Won’t Tell You April 28, 2013Posted by DustinRJay in Calgary real estate, urbanism.
Tags: Calgary real estate, Manning Centre, urbanism
After 200,000 page views on this blog and being dormant for the past few years, the time has come finally to make a post.
The recent fracas about developers making large private donations to political hubs like the Manning Centre in efforts to influence council has spurred my interest. In particular, why are certain special interest groups using opaque means to influence public policy?
In Calgary, there has been a renewed interest in urbanism as evident by the high rates of skyscraper and residential construction since 2000. In Toronto, studies show a renewed interest in downtown among younger demographics. And in the US, among younger demographics there has been a dramatic change towards increased public transit and cycling usage.
This evolving area for housing research is highlighted by Rob Shiller, eminent economist where he notes that “it’s plausible that a broad change in thinking is ahead, reducing demand for large suburban homes”.
The following spreadsheet highlights one of the major drivers for urbanism; that being the cost of congestion, parking and to a lesser extent vehicle replacement costs and fuel.
The key point is that living in a greenfield community would have inferred costs of $400,000 (net present value of 25 years at 3% rate) beyond living in a more bikable/walkable/transit friendly neighbourhood if you consider that your employment would be in the downtown.
This is something that you won’t hear about from those marketing greenfield construction. And this view of looking at affordability from a holistic point of view isn’t shared by homebuilders like Shane Homes. With such a large inferred cost ($400,000) these aspects of affordability are non trivial.
The spreadsheet below can be tailored to your situation: