“Growth isn’t paying for growth…” At last the Mayor’s office (sort of) faces facts

In his year-end interview with the CBC, Mayor Brian Bowman offered a belated acknowledgement on behalf of the Mayor’s office that the city is building too much infrastructure, and providing too many city services, that returns too little revenue to cover costs. (Click here, and skip down to the section entitled “Big bad budget.”)

Asked how the city could address that problem, the Mayor retreated into vague generalities about “sustainable, smart” development and “stakeholders from multiple levels of government…” In reality, making development pay for development boils down to two issues — issues much more clearly identifiable than Mayor Bowman’s generalities. The first is development charges, and the second is phasing development so that existing empty spaces are filled up before new areas are opened to development. I dealt with the second issue in a post a year ago last August. I’ll look briefly at development charges in this post.

The last time I talked to the City Planning Department about the issue of development charges, I was told that the charges imposed on a developer proposing a new development considered three sets of costs incurred by the new development: Parks, roads and bridges, and underground municipal services.

Absent from that list were the costs attributable to provision of transit services; conveniently located community centres and library branches; the same response times for fire fighters, police, and paramedics that other, possibly more densely populated, areas of the city enjoy; not to mention street cleaning, snow removal, grass cutting, insect control, and everything else the city does. Exactly how those costs should be calculated, and related to the revenues the new development can be expected generate, is no doubt a complicated accounting challenge, but it will certainly not be met by pretending — as current city policy does — that the costs do not exist.m

One response to ““Growth isn’t paying for growth…” At last the Mayor’s office (sort of) faces facts

  1. I agree with your premise that there are additional costs to new development. However we hear too often that the accounting is difficult.
    The accounting is not difficult.
    The costs can be divided into fixed costs or upfront costs and variable costs.
    The variable costs can be divided into services provided throughout the city and new ongoing costs that are not otherwise provided. For example a great number of flowerbeds and other ornamental features that aid in the marketing of a new developement.

    An example may clarify.
    Say it costs a million dollars for buses and overhead to establish a new route. That cost should be passed back to the developed and the new landowners. A developer may wish to make an arrangement with the city to have these costs on the property tax bill for ten years or so because it would save the new landowners money in the long run. A bus service in operation is no different than any other bus service in operation. The city would reap a secondary benefit in that bus service would would contribute to mitigating problems of parking downtown at hospitals, and at the university.
    Each item that is specific to a new developement can be accounted for: is accounted for in many jurisdictions and has been at times in the past. It is strictly the morals of city council that determine whether on not such accounting takes place.

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