The Plan It Calgary debate focused attention on the development industry in Calgary, the costs of growth and where the money comes from to pay for growth.

It also revealed a general misunderstanding of development costs, which affect the costs of housing and doing business.

The price of a new home can be divided into two components: The cost of building the home, and the cost of developing the lot.

Obviously it starts with the land and developers looking 10 to 15 years into the future when they purchase land, taking the financial risk the land will eventually be required to accommodate growth, knowing payback will not be complete until the last subdivided lot is sold.

Between buying and selling, the land developers take on the additional costs of property taxes, financing interest, professional fees, security, municipal levies, servicing of the land and marketing of a new community.

Other costs to be factored in are the future economic climate, market demand and delays in the approvals process and the latter, if inefficient and overly regulated, can add millions of dollars in costs.

The approvals process is where much of the misunderstanding about developers arises.

While developers have the initial vision for the community, all designs must be approved by the city and can be revised several times by city hall, adding to costs — which should destroy the notion developers push city hall around.

The approvals process includes the mandatory dedication of land, at a cost to the developer, for public spaces, roads, schools and other special areas, with land dedications taking 20% to 30% of the entire development, reducing the amount of salable land and adding to the cost of a new home.

We’re only getting started — once approvals are in place, servicing and infrastructure building begins — installing utilities such as water, stormwater ponds, sanitary sewers, roads, sidewalks, curbs, pathways, streetlights and more — all paid for by the developer, not the city.

Other requirements have been creeping in developers’ potential costs, including transportation facilities, mass transit, interchanges and emergency services — all of which are traditionally financed by property taxes.

It is patently unfair for new home buyers to pay the full costs when this type of infrastructure is also used by people not living in the new community.

Some will argue building in developed areas is better because all the infrastructure exists. However, existing inner-city areas often require the same costs because the infrastructure is old, was designed for low-density single-family homes and is not able to support new high-density, multi-family developments.

All the infrastructure, whether suburban or inner city, becomes a financial benefit to the city because it will not require upgrades or maintenance, and is warranted, for a substantial period of time.

The bottom line: Growth is growth, regardless of where it happens and new home buyers are picking up most of the costs.

Which brings us back to the cost of living and doing business.

When it gets too expensive to live in Calgary, people and businesses will stop coming to the city, choosing to stay where they are or setting up in the towns and cities surrounding Calgary.

People and businesses will also choose to leave the city, and both scenarios reduce the tax base, thus increasing already high taxes for those living in Calgary and stagnating the economy.

Developers and builders have never argued against paying their fair share of growth, but new home buyers should not be saddled with the burden of paying for services that other Calgarians enjoy for free.