Cold Lake council is considering a new tax incentive aimed at encouraging developers to create more residential lots — while taking on less financial risk.

Council has directed administration to prepare a policy framework that would provide a municipal tax exemption for newly created subdivision lots for up to seven years.

The idea, according to Chief Administrative Officer Kevin Nagoya, is to reduce the carrying costs developers face after installing infrastructure but before homes are built and sold.

“There is an associated risk of carrying those lots for a number of years before they sell,” Nagoya explained.

Developers must first invest heavily in infrastructure — roads, water, sewer and utilities — before lots can be marketed.

“Per block… it’s going to be a couple million dollars to outlay in the residential lots for the infrastructure,” he said.

After that, the challenge becomes time.

“After that it’s kind of the carrying costs,” Nagoya said, referring to property taxes, financing interest and bonding requirements.

Currently, undeveloped lots are subject to municipal property taxes once registered. The proposed change would exempt new subdivision lots from municipal property tax for their first seven years.

“We’re looking at… the first seven years,” Nagoya confirmed.

The goal is to encourage developers to build larger inventories up front rather than limiting exposure by developing in smaller phases.

“What we want to encourage is… instead of maybe building 20 lots… would they consider going to 30 lots or 40 lots so that way we build a bigger inventory ready for the growth for the city,” he said.

Council members expressed support for the concept, framing it as a proactive step rather than a reactive one.

The motion to move forward with developing the exemption policy carried unanimously.

Demolition and Multi-Family Incentives Also Under Review

In addition to subdivision incentives, administration is reviewing potential adjustments to multi-family and demolition incentives.

“You’re seeing… some of the demolitions of derelict properties… taking effect,” Nagoya said, noting that current incentives are already generating activity.

Council will review detailed policy proposals before adopting any formal tax exemption framework.

For now, administration has been directed to bring forward a structured policy for consideration.