August 22, 2017


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Listen to planners, not plutocrats

You really want downtown to shine? Start by killing the condo-buyer bribery scheme

Hey there, time traveller!
This article was published 20/7/2013 (1493 days ago), so information in it may no longer be current.

It's great city hall wants to increase downtown Winnipeg's residential population. The densification of this city's core is a laudable goal.

But Winnipeg's curious plan to cut $10,000 cheques to Exchange District and Waterfront Drive condo buyers appears to be a desperate and reactionary measure rather than a sensible piece of a long-term plan to continue the revitalization of the city's core.

Condo complexes along Waterfront Drive.

Condo complexes along Waterfront Drive.

Over the past 150 years, a variety of economic, geographic and political forces have conspired to leave downtown Winnipeg underdeveloped and underpopulated.

There was the greed of the Hudson's Bay Company, which encouraged an early version of urban sprawl by inflating land values around Upper Fort Garry. There was the hubris of both The Bay and Eaton's, who built department-store edifices along Portage Avenue at a time when the commercial core was concentrated along Main Street.

There was a protracted period of slow economic growth that followed both the end of the railway boom and the unresolved labour issues of the 1919 General Strike. There was a downtown-development chill following the devastation of the 1950 Red River Flood.

There was a series of short-sighted postwar decisions to tear up the city's streetcar network and put off rapid-transit construction while low-density residential neighbourhoods sprouted on the fringes of what used to be the city's suburbs.

Then in recent years, there was the belief in the power of megaprojects -- the Civic Centre complex! Portage Place! The Forks! MTS Centre! -- to undo a century of history through the magic of large-scale urban engineering.

The results, familiar to all Winnipeggers, have been mixed. Some of downtown's neighbourhoods are doing well, while others are desolate.

Broadway-Assiniboine, developed with the help of tax breaks in the 1960s, is among Winnipeg's mostly densely populated residential areas. Independent businesses have reoccupied storefronts on the thriving west side of the Exchange District. Thoughtful public and private investment into recreation has returned some life to Central Park.

But vast tracts of South Portage, downtown's largest neighbourhood, are dominated by asphalt surface-parking lots. What little is left of Chinatown resembles a ghost town. And the east side of the Exchange, home to impressive new condos, is only beginning to develop a pedestrian streetscape.

In other words, every time elected officials and civil servants try to stick their fingers into one segment of the downtown-revitalization dike, a leak springs in another section.

This is why CentreVenture, the city's downtown-development agency, has decided to forsake residential development in South Portage in favour of throwing all their policy eggs into the Exchange District-Waterfront Drive basket.

The focus is a good idea, as it's easier to achieve a critical mass of development in a smaller geographic area. But what was hastily approved by city council last week -- the Exchange-Waterfront Neighbourhood Development Program -- actually ensnares all of downtown.

This plan involves: A) Scooping up $7.8 million of future property-tax revenues from new developments in every section of downtown; and B) Funnelling that money into the Exchange District and several adjacent neighbourhoods.

Some of the cash will be used to address concerns raised about downtown living, such as safety issues, parking and the absence of a major grocer. While there may be merits to increasing foot patrols, expanding car-sharing and offering incentives to retailers, it is improper to devote precious growth revenues to routine spending priorities. The city has a budget process and CentreVenture should not be allowed to circumvent it.

It is even more outrageous to devote $2.3 million of future city tax revenue on condo-buying incentives simply because developers might not be able to sell the condos they built with the help of another tax-incentive program.

While developers who've chosen to invest in downtown deserve the gratitude of Winnipeggers, they do not deserve our charity. If they're having trouble selling condos, they can sit on their stock or lower their prices, like every other business on the planet faced with a glut of supply.

What officials have only hinted at publicly is some of the developers who took advantage of an earlier program -- the city-provincial Downtown Residential Development Grant Program -- are deeply unhappy they were unable to qualify for the maximum tax credits promised under that plan. It was billed as a tax-increment financing program, but it wasn't a real TIF.

Under a genuine TIF, any new property-tax revenue in a blighted area is either reinvested in streetscaping improvements or returned to the developers. Also, governments don't control what developments take place; they only decide how to reinvest the resulting windfall.

The downtown residential program, however, was not a TIF but a series of grants, with the city and province effectively deciding who could qualify. Even worse, the provincial demand for an affordable-housing component weakened the TIF-like mechanism, as developers could not achieve the maximum possible profits -- and thus could not return the maximum amount of new revenues to downtown.

As a result, very little affordable housing wound up getting built, some developers were deeply disappointed and -- here's the crucial part -- downtown was left with more new condos (that many Winnipeggers can not afford) than new apartments (which more Winnipeggers can afford).

Now, to add insult to injury, CentreVenture and city council plan to correct the previous blunder by offering cash incentives to condo buyers. Meanwhile, impoverished Winnipeggers in desperate need of affordable housing -- and middle-class people who just want to live downtown -- get absolutely nothing out of either the old grant program or the new incentive package.

Although council has already approved the Exchange-Waterfront plan, they have a chance to kill it this fall, when they vote on the bylaw required to enact it. The right thing for council to do would be to refuse to approve the bylaw.

Councillors should then take a huge deep breath, a big step back and promise to never, ever approve another top-down, megaproject-style downtown-revitalization policy ever again.

How instead do you improve downtown? Listen to the planners and not the plutocrats.

Eliminate the red tape and zoning barriers that restrict small-scale, storefront-by-storefront commercial development. Create real tax-increment-financing zones that don't pick winners and losers among developers.

In short, get the eff out of the way and let downtown be a downtown.


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