CALGARY - Mayor Dave Bronconnier says he wants developers to pay significantly higher levies to help offset the costs of servicing new subdivisions.

A city report this summer said land developers pay less than half the costs of building roads, sewer lines, fire halls and other services for their suburbs.

City hall and the industry will start negotiations next month to replace the five-year agreement that sets those levies and soon expires.

Bronconnier said the gap should close between what the developers pay and what growth costs.

"It may have to be phased in over a number of years, but as a community, we have to get there," the mayor said Monday.

"I don't know why existing taxpayers should be subsidizing the development industry."

In the past, industry officials have complained this would dent the affordability of suburban houses.

On Monday, a development spokesman warned there is a tipping point.

"Bronco knows as well as I do that you can't wring every single cent out of a private industry," said Mike Flynn, executive director for the Urban Development Institute-Calgary.

"There has to be some sort of middle ground. And this probably will result in an increase in the levy. But what that will be is to be determined."

Flynn said the city vastly overstates its arguments about growth not paying for itself.

Council was told this summer it costs $282,510 per suburban hectare to provide infrastructure, but the developers' assessment was $131,289.

"In spite of all the pleas by those who have been benefiting from growth, it has not been paying for the cost related to it," Bronconnier said.

Chima Nkemdirim, chairman of the Better Calgary Campaign, agrees.

He said higher levies would help curtail urban sprawl, because suburban homebuyers aren't paying the true cost of their lifestyle choice.

Calgary's developer levies are much lower than rates in most Canadian cities, including Edmonton, Ottawa, Regina and the Toronto area, according to the city report.

Ald. Jim Stevenson, whose northeast ward is seeing much of Calgary's suburban expansion, said the city shouldn't go too far as it renegotiates the levies.

He expressed worry that the charges could drive developers outside the city's boundaries.

"We have to come up with a balance so we can keep the development happening," he said.

"We need to have the taxes coming in from that land."