Sprawl fees ease growing pains

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This article was published 07/03/2016 (3536 days ago), so information in it may no longer be current.

‘Growth must pay for growth.’

This was the mantra repeated by Mayor Brian Bowman after revealing in his 2016 state of the city address negotiations are underway to create a new growth fee to help pay for the infrastructure costs associated with suburban development.

Faced with a $7-billion infrastructure deficit and a 2016 municipal budget filled with increased taxes and fees attempting to make up for a $74-million shortfall, our civic leaders appear to be coming to the realization the low-density suburbs we have built for decades in Canada are not financially sustainable in the long term.

Searching for a solution, cities across the country are turning to a ‘sprawl tax’ to help fill suburban-development funding gaps. Calgary recently implemented a charge on new subdivisions that’s expected to increase the cost of a new home by up to $6,000.

Winnipeg developers currently pay for streets, parks, water mains, sewers and sidewalks within new subdivisions as well as 50 per cent of improvements to nearby regional streets. What is left out of this funding model are schools, community centres, libraries and all the services the city provides such as transit, snow clearing, fire and police protection. Once built, maintenance of this new infrastructure becomes the responsibility of all Winnipeg taxpayers. The city has noted in the past more than half our infrastructure deficit can be attributed to suburban growth.

An example of how these economic challenges arise can be seen in the large suburb of Waverley West. Initial studies suggested that over 80 years, after all services are paid for, tax revenues would add $70 million to city coffers. As the development fills out, however, residents are rightly demanding the quality-of-life amenities found in other neighbourhoods, quickly eating up that profit with projects such as a $30-million school and a recreation campus that will likely eclipse that cost.

More importantly, the isolated, car-dependent suburb that will eventually be home to 40,000 people has already begun to stress regional traffic volumes, leading to demands for a $155-million rail underpass on Waverley Street to accompany the $50-million underpass and eventual $375-million widening on Kenaston Boulevard. To compound the issue, easier access to greater distances on these larger roads makes development of other subdivisions even more attractive at the fringes of the city and in bedroom communities beyond the Perimeter.

A new development fee will help close some of this funding gap, but with such large infrastructure costs, it is clear growth patterns must also change as part of the solution. Charging more for sprawl is an important piece of a strategy to becoming sustainable, reducing sprawl itself is another. Council approval of new suburban development in Winnipeg must be guided more by the goals of a strategic long-term plan and less by subdivision proposals that are the easiest and most profitable to implement for developers, with the city eagerly paying to extend infrastructure to meet them.

The City of Portland, Ore., is as an example of how a civic government can use a combination of growth fees and its power of development approval to realize their economic and planning priorities of increased density and reduced urban sprawl.

In 1979, Portland worked with the state government to implement an urban growth boundary, which establishes clearly defined and legally enforceable borders for expansion, with state legislation prohibiting construction on land outside of this limit.

Within the boundary, a plan for orderly property development was created to meet long-term goals for sustainable growth. Developers are incentivized to look at smaller subdivisions that are more connected to mature neighbourhoods, able to tap into existing services and infrastructure. Higher residential densities are required in new neighbourhoods, and infill development in existing areas is promoted through policy, fast-tracked approvals and lower permit fees. New subdivisions are required to be mixed-use, with commerce and employment embedded within a community that prioritizes pedestrian connectivity.

Growth fees, called system development charges, are used as an economic incentive to guide development type, density and location. A sliding scale is used to increase charges as the proposed densities decrease and as development moves farther from the city centre. New subdivisions can be completely exempt from development charges by providing a required level of affordable housing to meet planning goals of vibrant mixed-income neighbourhoods.

The resulting compact urban form helps to reduce automobile dependence. Higher densities and well-connected pedestrian networks allow each new neighbourhood to effectively support an extensive system of public transit that includes buses, light rail and streetcars as well as more than 600 kilometres of urban bike lanes. Portland uses all of its available tools, strategic planning, development approvals, public investment, financial incentives and disincentives in a cohesive effort to build better suburbs and a more prosperous city.

It is unlikely Winnipeg would ever come to an agreement with the province to implement a Portland-like urban growth boundary, but the provincial government can play a role in promoting smarter suburban growth by coming to the table to create a capital region development and taxation plan as well as giving the city the power to implement growth fees.

Nobody likes increased taxes, but the reality is at some point we will have to pay for the development choices we have made. Increasing income sources can help to fill budgetary shortfalls, but it is important to recognize Winnipeg’s infrastructure deficit has been created by reduced density, not by a lack of revenue.

If implemented strategically, growth fees can be a powerful tool to guide development toward key planning priorities, but to effectively manage long-term growth, they are only part of a required holistic strategy to promote infill development, reduce sprawl and increase overall density. Public policy and planning goals must match budget priorities and implementation to ensure suburban development is sustainable in the long term and growth truly does pay for growth.

 

Brent Bellamy is creative director at Number Ten Architectural Group.

bbellamy@numberten.com