Growth fees an important tool

Hey there, time traveller!
This article was published 23/08/2016 (3552 days ago), so information in it may no longer be current.

The issue of development fees has made headlines again in Winnipeg as the city and its citizens consider how to handle expected population growth and the city’s infrastructure. Hemson Consulting Ltd., the consultant hired to take on another study of growth financing in the city, completed its second and last engagement session on Aug. 18.

The primary purpose was to educate stakeholders on the method for calculating growth charges. Key stakeholders have been defined as primarily Winnipeg’s development industry, chiefly because developers will be the ones dealing with growth costs most directly.

While the development industry needs to understand and be part of the discussion, the premise that all citizens are not directly affected is fundamentally flawed. Neither Hemson Consulting nor the public service is responsible for the tight timelines and limited scope of the study. City council needs to provide all Winnipeggers with more information on the issue of growth charges. All Winnipeggers are dealing with the repercussions of development that does not pay its fair share and leaves taxpayers to cover the costs.

Winnipeg’s crumbling roads clearly demonstrate the effects of unsustainable and unfunded growth. But that is just the tip of the iceberg. Social-policy groups, community-based organizations, recreation and neighbourhood-renewal corporations all know the first response from any city councillor or bureaucrat when pushing for better or expanded social programming is “we have no money.”

While cities such as Ottawa, Toronto and Vancouver are creating complete communities through charging new developments some of the cost of creating affordable housing, Winnipeg is charging not-for-profit housing providers property taxes because it can’t afford to waive them. The city could choose to apply growth charges in a way that fosters complete and equitable communities, waiving or reducing fees for infill development in the inner city, affordable housing and transit-oriented development.

Winnipeg is one of the only cities in Canada that does not charge new developments for the costs of regional infrastructure. Currently, agreements are negotiated on a case-by-case basis that requires developers to provide, or pay for, all of the infrastructure within a site, as well as some boundary roads, intersections and drainage infrastructure.

Larger developments must undertake a cost-benefit study to calculate how property taxes from the development will support water, sewer, regional roads, police, community services and all of the other services a city provides for its residents.

There is, however, no consistent process in determining the cost of increased pressure on existing infrastructure and services or in establishing the annual per-kilometre cost of maintaining the new roads, sewer lines, etc. While the initial installation of services is accounted for, the long-term and regional-scale effects of differing types of development may not be.

Infrastructure in low-density communities, such as those built in the last 20 years, cost more to develop, maintain and service. Transit cannot be efficiently provided at low densities, giving residents few alternatives to driving and increasing the demand on roads. More sewer and water infrastructure is required, which, even if the upfront costs are paid for, ultimately become the responsibility of the city. More emergency vehicles are required to keep response times similar to that in denser areas. New schools or busing programs may be required for students.

While the ad hoc system of developer agreements attempts to recoup some of these costs, they do not account for the city-wide and long-term effects of these developments.

The data making the case for changing Winnipeg’s existing development agreement framework, included in Hemson’s initial report, are striking: when compared with similar Canadian cities, Winnipeg spends far below average on capital costs ($327 per capita, compared with $876 per capita); Winnipeg has an infrastructure deficit of at least $7 billion.

This is not to say developers are responsible for Winnipeg’s current financial situation; growth charges are not a panacea. Urban sprawl has major health and environmental costs that must be considered when approving new developments, whether the capital costs of this growth are paid for or not.

Developers need a fair and predictable environment in which to do business, but it should not be up to developers to decide how and where we grow as a city, how we provide for services for our residents, or how we create a more equitable city. Growth charges are an important tool to better steer development towards the type of dense, inclusive, complete communities called for in the city’s OurWinnipeg initiative. They are one part of a puzzle in reducing Winnipeg’s spiralling infrastructure deficit.

And because these things matter to all Winnipeggers, citizens should be engaged in the important process of deciding how growth charges will be established.

Christina Maes Nino is a community animator with the Social Planning Council of Winnipeg.