A recent study that shows a disparity in home prices between Okotoks and Cochrane leaves out an important piece of the puzzle, says the Town of Okotoks' top bureaucrat.
The study, Permitting Affordability: Housing Policy In the Calgary Metropolitan Region, by the University of Calgary School of Public Policy, suggests that home prices have been, on average, $40,000 higher here than in Cochrane over the last decade.
Both communities are near-identical when it comes to population, age, income and proximity to Calgary.
The study compares housing starts in the two communities from 2010 to 2021 and suggests differing municipal policies are the reasons for the price discrepancy. The study found that five residential building permits are issued in Cochrane for every two in Okotoks, and that Cochrane is building far more multi-family homes.
Okotoks CAO Elaine Vincent said the study clearly show a pricing differential but she thinks a big element is missing — water supply. With a limited supply of water placing restrictions on growth, Okotoks has high demand for housing, Vincent said, leading to higher prices.
“That's strictly attributable to us being the only community in Alberta that has a water allocation policy,” she said.
For a period of time, Okotoks could not approve any development, Vincent said, and now it's limited to 300 housing starts per year, which she said the Town is trying to balance between single- and multi-family homes.
“That's all that we are really allowing from a growth perspective to make sure that we can still have moderate growth with our limited supply, until the new supply is hooked up,” she said.
A new water supply will come via the Foothills Okotoks Regional Water Project that will draw water from the Bow River for distribution in Okotoks and Foothills County and supplement the water drawn from the Sheep River. It's expected to be operational in 2025.
The study points to an annual growth rate of roughly six per cent in Cochrane compared to two per cent in Okotoks, although that could soon change as Okotoks council will discuss a growth strategy in 2024, Vincent said.
“They can determine that rate of growth, relatively moderate, steeper (or) elevated,” she said.
Another difference the study points out is in the number of multi-family housing starts between the two communities. It says 46 per cent of housing starts in Cochrane were for multi-family dwellings, compared to only 16 per cent in Okotoks.
A survey from the Canadian Mortage and Housing Corporation shows that between 2010 and 2017, multi-family housing only made up around six per cent of housing starts in Okotoks, on average, but the picture begins to change in 2018.
From then on, multi-family housing starts accounted for over 40 per cent of all starts on average, and made up over half of all housing starts in 2022.
“When you take a look at this (study), it's implying that our regulatory framework isn't conducive to multi-family housing,” Vincent said. “I would say we changed our regulatory framework. The trend is shifting.
“If we had more water, we could more influence that trend, but we're controlling it right now with the limited amount of water that we have.”
Duplexes in Okotoks are selling out well before single-family homes, she said.
“The market has shifted from an affordability perspective and is reflected in these build numbers.”
Vincent said the Town reached out to the School of Public policy to talk about the study and the impact water, or lack thereof, has on the issue.
Okotoks was also faced with a land shortage, going through an annexation process that wasn’t completed until 2017, which Vincent said further restricted growth.
Development in Okotoks is moving ahead, with construction taking place in D'Arcy, Wedderburn and Air Ranch as well as early stage work in Tillotson and Triology Plains.
