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These 2 towns on Calgary’s outskirts are similar in many ways — except housing costs

Cochrane and Okotoks offer a tangible example of the role municipal permitting can play in the cost of housing, according to a paper released Thursday by the University of Calgary School of Public Policy.

The two bedroom communities, located on the northwestern and southern edges of Calgary’s city limits, have similar populations, household incomes and demographics.

But one area where they differ is the rate of new housing construction approved by the local municipal governments over the past decade or so.

“On average, Cochrane built triple the amount of housing Okotoks did, and issues five residential building permits for every two issued in Okotoks,” author Robert Falconer writes in the paper, which compares various data points between the two municipalities between 2010 and 2021.

Chart showing new home starts in Cochrane far exceeding those in Okotoks from 2010 to 2021.
New home starts in Cochrane (red line) and Okotoks (green line) from 2010 to 2021. (Robert Falconer/School of Public Policy)

“The variety of housing in Cochrane is also greater — multi-family dwellings represented approximately 46 per cent of new housing starts compared to 16 per cent in Okotoks.”

Falconer says these differences are likely related to the difference in housing costs between the two towns today.

“Despite higher demand for housing in Cochrane, housing there is $40,000 cheaper on average than in Okotoks,” he writes.

He notes the lower cost of housing in Cochrane comes even as its population has grown more quickly — at a rate of about six per cent annually, compared to about two per cent in Okotoks, over the same decade.

“Higher permitting may be the reason, allowing the supply of new housing in Cochrane to match the higher demand,” Falconer writes.

Lessons for Calgary and other municipalities

In an interview, Falconer said he wanted to compare Okotoks and Cochrane not to commend or scold either municipality.

Rather, he said, he hopes they offer a learning opportunity for other municipalities — Calgary, in particular — as concerns over affordable housing continue to mount.

“Social scientists really like these matches where two different populations actually look very, very similar,” he said.

“We can get a good sense of what policy is doing to actually drive any sort of other differences in housing between the two populations.”

He notes Okotoks has been dealing with concerns over water licences for more than decade, which has affected its ability to grow in a way that hasn’t been the case in Cochrane.

“There are real constraints on their policy choices there,” Falconer said.

The point of the paper, he says, is not the cause of each municipality’s policy choices, but rather the effect that those policies may have had on housing costs today.

Housing is a complex issue, he says in the paper, and policy decisions at all levels of government will play a role.

But, he adds: “Municipal governments may wield the greatest influence on housing costs through zoning regulations, which determine the type of housing that can be built, and building permits, which impact construction timelines and non-material costs of housing.”

Falconer also noted that, in terms of building permits issued per capita, Calgary’s rate of permitting “looks much more similar to Okotoks” than it does to Cochrane.

“And I think we see that somewhat reflected in the price of housing,” he said.

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