Development charges are a topic that is near and dear to this blog.
In theory, development charges are supposed to be "growth paying for growth." In other words, they are intended to pay for the incremental services and infrastructure required strictly because of new development. This, of course, sounds right. More people will equal more demand on city services.
However, development charges also increase the cost of new homes and there is a growing concern that development charges now pay for more than they should. Meaning, they have become a "housing tax", which is more or less the opposite of what you want if you think there's a shortage of new homes.
Part of the challenge, I think, is that city budgets are complicated. As far as I know, it's largely impossible for the average person to try and figure out which municipal costs are associated with growth and which are associated with ongoing operations (i.e. they should be paid for through things like property taxes).
That said, I think this current market environment could create a bit of a litmus test for development charges.
Development charges are a topic that is near and dear to this blog.
In theory, development charges are supposed to be "growth paying for growth." In other words, they are intended to pay for the incremental services and infrastructure required strictly because of new development. This, of course, sounds right. More people will equal more demand on city services.
However, development charges also increase the cost of new homes and there is a growing concern that development charges now pay for more than they should. Meaning, they have become a "housing tax", which is more or less the opposite of what you want if you think there's a shortage of new homes.
Part of the challenge, I think, is that city budgets are complicated. As far as I know, it's largely impossible for the average person to try and figure out which municipal costs are associated with growth and which are associated with ongoing operations (i.e. they should be paid for through things like property taxes).
That said, I think this current market environment could create a bit of a litmus test for development charges.
As most of you know
, new home sales in Toronto have fallen to levels not seen since the global financial crisis and the early 90s.
This means that construction activity has now also fallen and that, in turn, fewer developers are paying development charges. I haven't seen the exact numbers, but intuitively the drop in development charges paid should be precipitous.
Now, if these charges are strictly paying for growth, then in theory, cities should be completely agnostic to this decline. Sure, they're collecting less revenue, but they also don't have the new growth. Any growth that is still in the pipeline (i.e. under construction) would have already paid for their impacts.
However, if this is not the case, and municipal budgets start getting negatively impacted by this drop in development charge revenue, then it suggests that one of two things could be going on.
Either development charges aren't enough to cover the true cost of growth and the whole thing is a bit of a Ponzi scheme. That is, we need a constant flow of new developments to pay for the shortfalls of the last. Or, we're overtaxing new homebuyers for the benefit of incumbent ratepayers.
I'm sure it's more complicated than I'm making it seem right now. But this is the crux of this debate: Are we equitably levying development charges on new homes? This current market could offer a clue. If cities start running out of money, it might suggest the answer is no.
This is the battle that is now playing out across Toronto — and many other cities — as we look to intensify our existing communities; even in the ones sitting on higher-order transit. Cities rightly want to see it happen. But local ratepayers do not.
From the Globe and Mail:
“This project is in no way gentle intensification,” said the architect Terry Montgomery, representing the powerful local group the Annex Residents Association. “It will set a dangerous precedent for all areas in the city which currently [are zoned for] low-scale residential-buildings.”
It’s not clear whether that legal argument is true. At the meeting, City of Toronto planning manager David Driedger and director Oren Tamir – who, to their great credit, were supporting the development – said it would not set a precedent.
But if it did, why would that be “dangerous”? It is commonsensical. The Lowther site has two subway stations within an eight-minute walk. Toronto’s Line 1 and Line 2 intersect right here. This is one of the best-located, best-connected places in all of Canada.
Alex Bozikovic is, of course, right. This is commonsensical.
If our goals are to create more homes, improve housing affordability, reduce traffic congestion, and make us overall a more sustainable city, then there’s no better place to build than on top of transit within our already built-up areas.
Dave LeBlanc recently published an article in the Globe and Mail called, "How wide is your sidewalk?" And in it, he links to
As most of you know
, new home sales in Toronto have fallen to levels not seen since the global financial crisis and the early 90s.
This means that construction activity has now also fallen and that, in turn, fewer developers are paying development charges. I haven't seen the exact numbers, but intuitively the drop in development charges paid should be precipitous.
Now, if these charges are strictly paying for growth, then in theory, cities should be completely agnostic to this decline. Sure, they're collecting less revenue, but they also don't have the new growth. Any growth that is still in the pipeline (i.e. under construction) would have already paid for their impacts.
However, if this is not the case, and municipal budgets start getting negatively impacted by this drop in development charge revenue, then it suggests that one of two things could be going on.
Either development charges aren't enough to cover the true cost of growth and the whole thing is a bit of a Ponzi scheme. That is, we need a constant flow of new developments to pay for the shortfalls of the last. Or, we're overtaxing new homebuyers for the benefit of incumbent ratepayers.
I'm sure it's more complicated than I'm making it seem right now. But this is the crux of this debate: Are we equitably levying development charges on new homes? This current market could offer a clue. If cities start running out of money, it might suggest the answer is no.
This is the battle that is now playing out across Toronto — and many other cities — as we look to intensify our existing communities; even in the ones sitting on higher-order transit. Cities rightly want to see it happen. But local ratepayers do not.
From the Globe and Mail:
“This project is in no way gentle intensification,” said the architect Terry Montgomery, representing the powerful local group the Annex Residents Association. “It will set a dangerous precedent for all areas in the city which currently [are zoned for] low-scale residential-buildings.”
It’s not clear whether that legal argument is true. At the meeting, City of Toronto planning manager David Driedger and director Oren Tamir – who, to their great credit, were supporting the development – said it would not set a precedent.
But if it did, why would that be “dangerous”? It is commonsensical. The Lowther site has two subway stations within an eight-minute walk. Toronto’s Line 1 and Line 2 intersect right here. This is one of the best-located, best-connected places in all of Canada.
Alex Bozikovic is, of course, right. This is commonsensical.
If our goals are to create more homes, improve housing affordability, reduce traffic congestion, and make us overall a more sustainable city, then there’s no better place to build than on top of transit within our already built-up areas.
Dave LeBlanc recently published an article in the Globe and Mail called, "How wide is your sidewalk?" And in it, he links to
this sidewalk map of Toronto
(pictured above), which uses open data from the city to plot sidewalk widths.
It was originally intended as a map of where social distancing is possible (oh, how far we've come), but today it serves as a really interesting way of looking at the city. What it makes clear to me is that we could use a lot more sidewalk, and that too many areas of the city have a discontinuous public realm.
Sometimes there's very little that can be done until an adjacent property gets redeveloped. And when this does happen, the city will demand pedestrian widenings. But in other cases, there are solutions that could be implemented today, without private participation.
So I sure hope that someone is looking at a map like this and trying to come up with holistic solutions for making Toronto a more walkable and more pedestrian-friendly city.
Note: Sometimes a narrow sidewalk does not necessarily equal an inhospitable street. I mean, look at this example.
this sidewalk map of Toronto
(pictured above), which uses open data from the city to plot sidewalk widths.
It was originally intended as a map of where social distancing is possible (oh, how far we've come), but today it serves as a really interesting way of looking at the city. What it makes clear to me is that we could use a lot more sidewalk, and that too many areas of the city have a discontinuous public realm.
Sometimes there's very little that can be done until an adjacent property gets redeveloped. And when this does happen, the city will demand pedestrian widenings. But in other cases, there are solutions that could be implemented today, without private participation.
So I sure hope that someone is looking at a map like this and trying to come up with holistic solutions for making Toronto a more walkable and more pedestrian-friendly city.
Note: Sometimes a narrow sidewalk does not necessarily equal an inhospitable street. I mean, look at this example.
