Calgary

Downside of Calgary Downtown Residential Conversions?

Wendell Cox — Mon, 22 May 2023 14:22:16 -0400

The Calgary Herald reports that some office tenants are being forced out of their buildings in the city of Calgary’s program to convert office buildings to residential uses.

We had covered this program recently, noting that “that the City has adopted an aggressive program to reduce downtown’s office footprint. With 14 million square feet vacant, the city has adopted the “Downtown Calgary Incentive Program,” a goal of which is to reduce CBD office space by 6 million square feet by 2021. The purpose of the program is to encourage the removal of vacant office space in the downtown to help address vacancy rates and stabilize property values over the next decade.” The program provides subsidies to building owners undertaking conversions.

The Herald cites the case of one business that signed a sublease for space on April 12, just over a month ago. The company learned shortly thereafter that they would need to relocate before the end of 2023. Four years before their sublease was to expire.

Conversion of office buildings to residential may be the greatest hope for the survival of downtowns where until the pandemic, there were far more jobs than resident workers. The experiences cited in the Herald story could make downtown Calgary even less competitive with other office locations in the metropolitan area, as firms face uncertainty about being able to rely on agreed upon lease expiration dates.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

Downtown Calgary: Not Overbuilt, But Under-Demolished?

Wendell Cox — Mon, 10 Jan 2022 20:02:24 -0500

North America’s largest post-World War II central business district has just received unwelcome news (Note). Writing in the Calgary Herald, columnist Chris Varcoe (“Staggering $17B drop in value of downtown towers fuels search for solutions”) reported that downtown property assessments were down C$1.1 billion in a single year. This is a continuation of a long term trend, in which values of 160 properties dropped by more than two-thirds since 2015. Calgary, headquarters to much of Alberta’s oil industry, has been hard hit by the decline in oil prices and provincial oil production. Over the past year, part of the decline seems likely to be related to lockdowns and the general movement of many people to exurbs and farther.

Varcoe reported the present vacancy rate to be 34%, with five buildings “completely empty.” Ominously, an industry professional said: “The problem is we’re not overbuilt; we are under-demolished.”

Read entire article here.

Note: With the decline of transit and increased auto use, emerging large metropolitan areas have generally not built dense central business districts similar to their World War II predecessors. There are two notable exceptions, Calgary and Charlotte. Cushman and Wakefield indicates that downtown Calgary has about 44 million square feet of office space. This is about twice that of the second largest post-WW2 CBD, in Charlotte. Downtown Calgary has slightly more office space than downtown Philadelphia, with a metropolitan population about four times that of Calgary.

The 30th Anniversary of the C-Train in Calgary

Steve Lafleur — Fri, 01 Apr 2011 11:04:34 -0400

I’ve spent a good chunk of the last few months working on a study of Calgary’s light rail transit (C-Train) system, which was released today by the Frontier Centre for Public Policy. I’ve had a long standing interest in LRT systems, and spent the summer of 2009 working for the Cascade Policy Institute in Oregon, where we compiled massive amounts of data on their world renowned LRT system as part of an ongoing project. The data (including actual field research, which proponents of the system haven’t done–they rely on survey data), indicates that ridership is lower, and costs are far higher than proponents believe.

That firsthand experience (which included riding the train every day), coupled with the empirical literature from light rail systems across North America, shattered my previous conviction that light rail transit can be an economical method of transit. For the record, I do believe that subways can be profitable in dense urban cores (even the badly managed TTC nearly breaks even), and buses already are profitable in many cases (especially inter-urban bus services, such as Greyhound and Megabus). Many proponents of LRT believe that it is a happy medium between subways and buses. If that were the case, it would be profitable. However, LRT combines the disadvantages of the two: it is slow, inflexible, and expensive. Numerous studies, in particular an authoritative study by the non-partisan United States Government Accountability Office, have demonstrated that on average, buses are a cheaper, faster, and more flexible than LRT for providing mass transit.

While I use many different metrics to demonstrate that the costs and benefits of LRT are wildly exaggerated, my favorite is that Calgary spends both the most on transit and the most on roads per-capita. Given that Calgary’s entire land use and transportation framework for the past several decades has been built around the C-Train, it is hard to call it anything but a failure. The City has cracked down on parking so aggressively to encourage people to ride the train that there are only 0.07 parking spaces per employee in the central business district. Because of this, Calgary is tied with New York for the highest parking prices on the continent. But many of those people who would otherwise have parked downtown instead park in the free parking spots provided at C-Train stations. Not only is free parking horribly inefficient, but this also emphasizes one of the major contradictions of the C-Train: it isn’t getting people out of their cars, and it isn’t helping to curb urban sprawl–two of its primary goals.

Unsurprisingly, those last two findings proved controversial, though not as controversial as my assertion that the C-Train fails to help the urban poor. A columnist for the Calgary Herald wrote an angry response to my Herald article that accompanied the story (though doesn’t seem to have read the study). She attempts to refute my arguments about urban sprawl, and the impact of the C-Train on the poor, while dismissing the study as “a cost-benefit analysis guaranteed to resonate with other right wingers who share the mantra of lower taxes above all else, including over the reality of everyday experience.” I’m not clear on when cost-benefit analysis became a right wing concept, but I’ll let that one go. I will, however, address her two criticisms in short order.

The idea that urban transit could worsen sprawl seems odd. The reason why it does so in Calgary is because the C-Train network is built on a hub and spoke model. What this means is that transit is concentrated on going from the outskirts, into the city center. Since LRT is so expensive, and since people need to be ‘collected’ by buses to get to LRT stations, the city has less resources to provide transit circling the core, or travelling east-west. And if you can’t provide good transit for people who aren’t living along LRT lines, and don’t work along one of the lines, people are just going to keep moving further out (hence the highest road costs in the nation). Here’s what Calgary Transit’s current planning manager has to say about the C-Train’s impact on sprawl:

“In one respect, it should allow Calgary to be a more compact city, but what it’s done is it’s actually allowed Calgary to continue to develop outward because it was so easy to get to the LRT and then get other places,” says Neil McKendrick, Calgary Transit’s current planning manager.”

While that comment is true for those who can afford to live by LRT stations (or to drive to them), it doesn’t apply to the city’s poorest. As it happens, LRT lines raise the cost of adjacent housing (though for proximate high end housing it lowers the value–hardly a concern for the poor)–by $1045 for every 100 feet closer to a rail station. This isn’t a terribly complicated concept. If you spend a massive amount of money on a form of transit that is considered to luxurious, the price of housing goes up. This is exacerbated by the fact that diverting transit resources to those areas makes transit there comparatively better, making it that much more desirable comparatively for people who intend to use transit at all–even as just an occasional amenity, say for going downtown on weekends. LRT is great for people who can afford to live by the stations, but not so much for anyone else.

Unfortunately, for many, light rail transit has become a sacred cow. But if Calgary is ever going to have adequate rapid transit, the City will need to explore more cost effective options. Buses may not be trendy, but expanding BRT in Calgary would dramatically improve people’s mobility at a reasonable cost. Fortunately, the current Mayor has acknowledged that BRT will have to be part of the solution for making Calgary a transit friendly city. He also made the wise decision of de-prioritizing the southeast LRT extension (expected to cost $1.2-$1.8 billion). If the Mayor follows up on his promise to make BRT an integral part of Calgary Transit in the short term, the City will not only have far better transit, but it will have a chance to watch the LRT and BRT operating side by side so that the people can decide for themselves whether the billion plus required to build the Southeast LRT is worthwhile. My bet is on BRT.

This piece originally appeared at stevelafleur.com