The City of London, also known as the "Square Mile," is the financial district of London. Some 678,000 people work in the area, nearly 9,000 people live in it, and millions visit it each year. So it's an intensely used square mile (~1.12 square miles or ~2.9 square kilometers). Given this intensity, do you think that it would be reasonable, or even possible, for all 678,000 people to drive their own car to work and not experience crippling traffic congestion?
Motor vehicle usage within the City of London is nearly a third of what it was in 1999. This is a result of moves like the city's Congestion Charge (introduced in 2003) and new Cycling Superhighways (introduced between 2015-16).
Cycling increased 57% from 2022 to 2024. Personal bike usage increased 36%. Shared dockless bike usage increased 4x and now makes up 17% of all people cycling. During daytime hours (7am to 7pm) cycling represents about 39% of all on-street traffic, which is nearly 2x the amount of cars and private hires. And based on current trends, cycling is forecasted to become the dominant all-around mode of transport within as soon as two years.
People walking, wheeling, and cycling now make up three quarters of all travel, up from two-thirds in 2022. This is a huge percentage.
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.
The City of London, also known as the "Square Mile," is the financial district of London. Some 678,000 people work in the area, nearly 9,000 people live in it, and millions visit it each year. So it's an intensely used square mile (~1.12 square miles or ~2.9 square kilometers). Given this intensity, do you think that it would be reasonable, or even possible, for all 678,000 people to drive their own car to work and not experience crippling traffic congestion?
Motor vehicle usage within the City of London is nearly a third of what it was in 1999. This is a result of moves like the city's Congestion Charge (introduced in 2003) and new Cycling Superhighways (introduced between 2015-16).
Cycling increased 57% from 2022 to 2024. Personal bike usage increased 36%. Shared dockless bike usage increased 4x and now makes up 17% of all people cycling. During daytime hours (7am to 7pm) cycling represents about 39% of all on-street traffic, which is nearly 2x the amount of cars and private hires. And based on current trends, cycling is forecasted to become the dominant all-around mode of transport within as soon as two years.
People walking, wheeling, and cycling now make up three quarters of all travel, up from two-thirds in 2022. This is a huge percentage.
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.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
The train from Paris to Marseille takes just over 3 hours:
To drive this same distance, it would take just over 8 hours:
So unless you had a very specific reason, I don't know why you'd ever want to drive this route. I certainly hate long drives and would avoid this at all costs.
On a related note, the Canadian government announced this week that it will actually be moving forward with a high-speed train linking Québec City to Toronto, stopping in Peterborough, Ottawa, Montréal, Trois-Rivières, and Laval. And unlike previous announcements, it will actually go pretty fast -- upwards of 300 km/h, which is comparable to what the TGV does on the above route.
There are three consortia currently competing for this contract, but apparently the federal government has already chosen a winning bidder. An announcement is expected next month. At the same time, the project office owns all of the bids, and so there's a chance that elements from each of them could be used in the final project.
According to official messaging, the design alone is expected to take some 4 to 5 years, which is an eternity and way too long. But at least we seem to be moving forward. This rail link is a no brainer. It will compress the geography of an importantly bilingual corridor with nearly 20 million people -- about half the population of Canada! It's our megalopolis.
Now we just need to move forward with urgency and with an unwavering commitment to creating the best high-speed rail service in the world. Let's not accept mediocrity. And let's not cancel it once we've already sunk millions into it. That would be a terrible outcome for such an obviously important nation-building project.
LFG.
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.
The train from Paris to Marseille takes just over 3 hours:
To drive this same distance, it would take just over 8 hours:
So unless you had a very specific reason, I don't know why you'd ever want to drive this route. I certainly hate long drives and would avoid this at all costs.
On a related note, the Canadian government announced this week that it will actually be moving forward with a high-speed train linking Québec City to Toronto, stopping in Peterborough, Ottawa, Montréal, Trois-Rivières, and Laval. And unlike previous announcements, it will actually go pretty fast -- upwards of 300 km/h, which is comparable to what the TGV does on the above route.
There are three consortia currently competing for this contract, but apparently the federal government has already chosen a winning bidder. An announcement is expected next month. At the same time, the project office owns all of the bids, and so there's a chance that elements from each of them could be used in the final project.
According to official messaging, the design alone is expected to take some 4 to 5 years, which is an eternity and way too long. But at least we seem to be moving forward. This rail link is a no brainer. It will compress the geography of an importantly bilingual corridor with nearly 20 million people -- about half the population of Canada! It's our megalopolis.
Now we just need to move forward with urgency and with an unwavering commitment to creating the best high-speed rail service in the world. Let's not accept mediocrity. And let's not cancel it once we've already sunk millions into it. That would be a terrible outcome for such an obviously important nation-building project.
LFG.
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.
