The province of Alberta is releasing enough Crown land to build homes for 40,000 people in Fort McMurray, a city whose residents have faced spiralling housing prices and overloaded services in the wake of oilsands development.

The city's population has nearly doubled to 65,000 in the past 10 years.

Melissa Blake, the mayor of the regional municipality of Wood Buffalo, which includes Fort McMurray, hopes that two new subdivisions covering 1,600 hectares will meet housing demands in the city, where the average cost of a single family home is $692,000.

"We're hoping again to start matching pace with the actual growth that's occurred in the community," said Blake.

In the past the mayor has been critical of the province for not providing Fort McMurray with the funding and infrastructure it needs to keep up with development.

The new subdivisions will include community services such as schools, health clinics and commercial developments.

The province, along with local officials, will come up with the plans for the development, and a portion of the units will be designated as affordable housing. The first housing is expected to be complete by 2010.