Following my recent post about cycling to the office, Richard Witt of BDP Quadrangle suggested that I do a post on the West Toronto Railpath and use the little influence that I have to try and encourage further expansion. I thought this was a reasonable idea and so here I am writing about it today.
For those of you who may not be familiar, the WTR is a multi-use trail that can be used for "human-powered activities" such as biking, running, or unicycling. And as the name suggests, the path runs on an old rail line on the west side of Toronto. Here is the current route map (we're talking about the dark orange line):
And here's what it looks like today:
It's an incredible amenity and piece of infrastructure on the west side of Toronto, but it's probably also a little underrated. I think of part of this has to do with it being somewhat hidden. And I think another part of this has to do with it being too short.
Right now the WTR runs from Cariboo Ave in the north -- which is around the corner from Junction House -- down to Dundas Street West & Sterling Road in the south. But according to the City of Toronto, an expansion phase has already been funded and construction will start next year. This will take its southern terminus down to Queen Street & Sudbury Street:
All of this is, of course, excellent news. But you and I both know that the WTR needs to be further extended to Union Station, then up north, and probably elsewhere too. So I am here today to advocate for that to happen. If we can find a few billion hanging around to rebuild the Gardiner East (ugh), then surely we can scrape together a few more million for this.
Images: Friends of West Toronto Railpath
Colliers recently hosted a webinar about inclusionary zoning here in Toronto. On the panel was Jeremiah Shamess (SVP at Colliers / moderator), David Bronskill (partner at Goodmans), Giulio Cescato (senior planner at IBI Group), and Richard Witt (principal at BDP Quadrangle). I wasn't able to attend (either because of a critical meeting or because I was off attending to a gluttonous lunch burrito), but the slides are now available online. I was going through them this morning and I came across this chart from NBLC:
Following my recent post about cycling to the office, Richard Witt of BDP Quadrangle suggested that I do a post on the West Toronto Railpath and use the little influence that I have to try and encourage further expansion. I thought this was a reasonable idea and so here I am writing about it today.
For those of you who may not be familiar, the WTR is a multi-use trail that can be used for "human-powered activities" such as biking, running, or unicycling. And as the name suggests, the path runs on an old rail line on the west side of Toronto. Here is the current route map (we're talking about the dark orange line):
And here's what it looks like today:
It's an incredible amenity and piece of infrastructure on the west side of Toronto, but it's probably also a little underrated. I think of part of this has to do with it being somewhat hidden. And I think another part of this has to do with it being too short.
Right now the WTR runs from Cariboo Ave in the north -- which is around the corner from Junction House -- down to Dundas Street West & Sterling Road in the south. But according to the City of Toronto, an expansion phase has already been funded and construction will start next year. This will take its southern terminus down to Queen Street & Sudbury Street:
All of this is, of course, excellent news. But you and I both know that the WTR needs to be further extended to Union Station, then up north, and probably elsewhere too. So I am here today to advocate for that to happen. If we can find a few billion hanging around to rebuild the Gardiner East (ugh), then surely we can scrape together a few more million for this.
Images: Friends of West Toronto Railpath
Colliers recently hosted a webinar about inclusionary zoning here in Toronto. On the panel was Jeremiah Shamess (SVP at Colliers / moderator), David Bronskill (partner at Goodmans), Giulio Cescato (senior planner at IBI Group), and Richard Witt (principal at BDP Quadrangle). I wasn't able to attend (either because of a critical meeting or because I was off attending to a gluttonous lunch burrito), but the slides are now available online. I was going through them this morning and I came across this chart from NBLC:
What you are seeing here is a comparison between a typical market development before IZ and a development after IZ. As you can see, soft costs remain the same, hard costs remain the same, and the profit margin remains the same. What changes is the overall revenue. Market revenue goes down because you now have fewer market-rate units and a new IZ revenue is added, which is the revenue generated from the addition of affordable units to the project.
But when you add up the market revenue and the IZ revenue, you don't get back to the same economic equilibrium. In other words, there has been a destruction of value, and so something is going to have to give in order for this project to pencil and remain financeable. Otherwise, no development will take place. This shortfall is the red box area in the above graph that says, "impact of inclusionary zoning."
We have discussed this red box gap a lot on the blog, because how you think this gap gets filled might determine how you think of inclusionary zoning as a policy tool. In this particular instance/graph, the gap is filled by a reduction in the value of the land. Everything else remains static. So what is effectively happening in this model is that the landowner, who has decided to sell their land to the above developer, is now the one who has to indirectly pay for this new affordable housing.
This may seem like a sensible way to go about it. I mean, people who own land must be rich. Let's make them pay. But is this actually what is going to happen in practice and over extended periods of time? Soft costs -- things like development charges -- are always going up. Why aren't land values perpetually declining in order to offset these additional costs? It is largely because market revenues have also been increasing. Housing keeps getting more expensive. And that is what has been keeping the market going.
I suspect that over an extended period of time, the same thing will happen here.
What you are seeing here is a comparison between a typical market development before IZ and a development after IZ. As you can see, soft costs remain the same, hard costs remain the same, and the profit margin remains the same. What changes is the overall revenue. Market revenue goes down because you now have fewer market-rate units and a new IZ revenue is added, which is the revenue generated from the addition of affordable units to the project.
But when you add up the market revenue and the IZ revenue, you don't get back to the same economic equilibrium. In other words, there has been a destruction of value, and so something is going to have to give in order for this project to pencil and remain financeable. Otherwise, no development will take place. This shortfall is the red box area in the above graph that says, "impact of inclusionary zoning."
We have discussed this red box gap a lot on the blog, because how you think this gap gets filled might determine how you think of inclusionary zoning as a policy tool. In this particular instance/graph, the gap is filled by a reduction in the value of the land. Everything else remains static. So what is effectively happening in this model is that the landowner, who has decided to sell their land to the above developer, is now the one who has to indirectly pay for this new affordable housing.
This may seem like a sensible way to go about it. I mean, people who own land must be rich. Let's make them pay. But is this actually what is going to happen in practice and over extended periods of time? Soft costs -- things like development charges -- are always going up. Why aren't land values perpetually declining in order to offset these additional costs? It is largely because market revenues have also been increasing. Housing keeps getting more expensive. And that is what has been keeping the market going.
I suspect that over an extended period of time, the same thing will happen here.
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