Challenges and Solutions in Acquiring Water for Housing Development

By Lorraine Nicol, Ph.D

A facet of water management which greatly interests me as a researcher is the challenges involved in satisfying competing demands for water, especially given the province’s fixed licensed water allocation framework. To some extent, my research has become more and more finely focused on one singular question: how effectively are users navigating the water market in water basins that are closed to new licensed water allocation applications?

My most recent project focused on housing developers in the Calgary region. It was funded by the Alberta Real Estate Foundation. The research was prompted by an earlier, 2015, study of water management within Rocky View County. In that study (entitled ‘Challenges and Potential Adaptation Strategies of Rural Water Co-ops: An Alberta Case Study’) I found preliminary evidence that housing developers in Rocky View were very pessimistic about the future of their industry, given the challenges they face in acquiring licensed water allocations for their developments.

Home under construction

By Rishichhibber (Own work)
[CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

The more recent study explored water challenges in more depth by expanding the number of municipalities to include Rocky View County, M.D. Foothills, and the Town of Okotoks. The study involved interviews with 15 developers working in these municipalities.

The study considered four main lines of inquiry:

(a) developers’ views of water challenges;

(b) the nature and source of the problem;

(c) the consequence of water challenges; and

(d) solutions.

An additional dimension of the study involved a preliminary assessment of the potential impact a decline in housing construction could have on the real estate sector.

The study’s finding confirmed my earlier suspicion that challenges for developers are prevalent. In addition this study found that, for many developers: acquiring water is their main issue; housing development is now, or will be in the future, negatively affected; water has become politicized; and housing prices are absorbing the top dollar developers are paying for water licenses.

The study specifically found:

  • 100% of the developers interviewed believe there are challenges in acquiring licensed water allocations for housing development in the three municipalities under study;
  • 73% stated acquiring a licensed water allocation is the ‘primary issue’ for developers;
  • 60% of interviewees believe water management in the region is political, to the detriment of the housing industry;
  • Another 53% believe the source of the problem also relates to government processes;
  • 87% of developers believe water challenges are having a negative effect on the industry, either now or in the future;
  • Two-thirds of developers say the cost of acquiring water licenses increases the price of homes.

Water drops

Photo: che at Czech Wikipedia Adjustment: Li-sung at Czech Wikipedia (Own work)
[CC BY-SA 2.5 (http://creativecommons.org/licenses/by-sa/2.5)], via Wikimedia Commons

The solution to water challenges in the region is easy to identify but difficult to implement. All developers believe a solution lies in working together as a region under an umbrella organization. However, in studying regionalism for my Ph.D dissertation (the Calgary Regional Partnership in particular), history and experience tell us that some regional models work better than others, depending on the dynamics in the region.

Developers believe a regional framework would not only help re-allocate water but also alleviate the high cost of water and wastewater treatment facilities if the cost of such facilities could be shared. However, developers are also aware of the confrontational environment amongst some municipalities in the Calgary region and are therefore also cognizant of how difficult a workable regional model is to craft.

Dr. Lorraine Nicol is a Research Associate in the Economics Department, University of Lethbridge. Her expertise is in water and city-regionalism, participatory processes in water management, Alberta water issues and policy, and water markets. To see a list of her publications click here.