Monthly Archives: February 2011

JMA Sponsored Event a Huge Success!

Yesterday, February 24th, John MacDonald Architect sponsored an event on Smart Growth, urban sprawl and municipal taxation. Featuring a keynote by author and planner, Pamela Blais, the day generated lively discussion and debates surrounding the issues.

At 4:15 JMA Principal John MacDonald offered a local perspective on urban sprawl and the fiscal landscape of KW, illustrating how urban residents subsidize sprawl in the suburbs.

Offering a candid critique of past planning and architectural conceptions of designing cities, the event promoted re-urbanization efforts, offering alternatives to current policies that tend to promote sprawl. Rather than an attack on suburban home builders and home owners, the goal of the day was to point out that rather than continuing to allow suburban homes to be subsidized by higher multi residential taxation rates, buyers pay the true cost of their purchase- whether downtown or in the suburbs.

Attendees included Chair Seiling, CAO Mike Murray, councillors from the Region, Kitchener, Waterloo, Stratford, Guelph and Brantford, as well as representatives from local real estate, Directors from the Canadian Condominium Institute, Home Builders, Developers, Professors, Lawyers, Facilities Management, other architects, and interested citizens.

A special thanks to everyone who attended, and to Distinctly Tea for providing the delicious tea for the event.

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JMA convenes forum on Sprawl and the Fiscal Landscape

As part of its continuing commitment to foster discussion about issues affecting the quality of communities in the Grand River Watershed, John MacDonald Architect is hosting a focus session on the fiscal landscape that drives urban form in our community.

The session is titled:

The Flipside of Smart Growth: Urban Sprawl in the Grand River Watershed

As our communities contemplate their budget and tax ratio projections, this is a timely and critical event that explores how taxation and fees can support goals for vibrant and sustainable communities, rather than hinder them.

The event will be held Thursday, February 24th, 2011, from 2 to 6 pm. Our architectural firm has placed its offices and adjacent meeting spaces in the Bonnie Stuart Building, 141 Whitney Place, Kitchener, at the service of the gathering.

The highlight of the afternoon will be an address by noted Toronto planning consultant Pamela Blais, of Metropole Consultants, who has kindly agreed to speak to leadership and representatives from the Grand River Watershed. Ms Blais is the author of the recently published Perverse Cities: Hidden Subsidies, Wonky Policy, and Urban Sprawl. The book catalogues the many ways in which government and public utility fiscal policies and practices continue to subsidize urban sprawl, in spite of equally strong policy rhetoric that commits our communities to Smart Growth and more sustainable forms of community development.

Commenting on the upcoming event, Pamela Blais said: “I am pleased to participate in this event, and thank John MacDonald for organizing a forum in which to air these important issues. I look forward to an open discussion about the critical but often overlooked role played by fiscal and policy misincentives in driving urban sprawl.”

Although it may be unusual for a professional architectural firm to host such a high-profile discussion of tax and fiscal policies and the marketplace distortions they cause, we feel strongly that the public interest deserves an open and neutral forum in which to air these issues.

Our communities and our citizens are undertaking large investments in public infrastructure that will determine our competitiveness, the sustainability of our watershed, and the quality of life for our children.

The investments may take the form of extensive utility, road, and expressway projects to support an auto-centred community; or equally extensive commitments that shift to more compact, sustainable urban form. Consumer and taxpayer perception, and conventional wisdom, is that low-density growth at the periphery of our urban centres is a net fiscal benefit to our communities. Ms Blais has effectively set out the evidence that citizens living and working in more sustainable forms of community provide significant subsidy to auto-dependent forms of development, both during initial construction and annually as these areas are maintained and replaced. We believe that in order for citizens and communities to make informed decisions about investment and lifestyle, the cost of such decisions should be accountable and transparent.

Invitations to the event have been issued to politicians representing citizens within the Grand River Watershed at all levels of government, to senior planning and finance staff, as well as to representatives of citizen and business groups that are affected by the fiscal landscape that drives growth. We are pleased with the response to date, and have confirmed attendance from each sector, including among many others:

  • Region of Waterloo Chair Ken Seiling and CAO Michael Murray, as well as members of Regional Council
  • Municipal councillors from Waterloo, Kitchener, Hamilton, and Brantford, with other municipalities pending
  • Representatives of chambers of commerce, major landlords, and consumer advocacy groups such as the Canadian Condominium Institute
  • Representatives of development, finance, and real estate firms active in the watershed
  • Representatives of local universities and the academic communities in planning, design, and community

We’ve been very happy with both the response and the balanced mix of participants to date. Space is limited, but we want to accommodate the high level of interest and ensure a balanced discussion. Anyone wishing to participate in this event should contact us with a request as soon as possible. Please visit us at:

Website: www.johnmacdonaldarchitect.ca

Twitter: http://twitter.com/JMacArch

For information regarding the event, to arrange media accreditation, or to arrange interviews, please contact:

Cailin Radcliffe

cailin@johnmacdonaldarchitect.ca

519-579-1700

The Subsidy Cascade

Let’s play a game.

I’ll write about municipal taxes and utility fees, and you try to stay awake. Yes, It’s that season again, in which a tale of two certainties, Death and Taxes, should be revised to Death by Thinking about Taxes, Followed by Taxes. Notwithstanding, we will now add our contribution to the subject by writing about writing about taxes. Insane, I know.

If ever a column risked banishment to the bottom of the bird cage, I think this is it.

So, dear reader, why can’t this architect and designer resist dragging the pond for the putrid evidence of tax rate imbalances, development charge cross-subsidies, and the evils of postage stamp pricing that we will shortly discuss? Well, maybe three reasons.

First and foremost, we’ve somehow got to maintain the communities we’ve built, and to hand them over to our children in a fiscal and physical shape that’s actually affordable and sustainable. The evidence is fairly clear that for decades we’ve not been doing this, and the reckoning is nigh. Understanding how we fund our municipal costs, and the actual price of the services we so take for granted, is critical to the public discussion of decisions we face for the future of our communities.

Second, it seems that planning and environment departments at every level haven’t been paying attention to what the finance departments are doing, and vice versa. In a classic case of silo thinking, the planners and environmentalists have been busy promoting and regulating compact, sustainable communities that we can afford, while our system of revenue and expenditure continues to subsidize urban sprawl that we cannot. This has got to stop. A critical first step is to get the conversation and the evidence out into the open, and out of the hands of the experts.

The last and most important reason to talk about these issues is to link them to our responsibilities as citizens. Not as taxpayers. Citizens. A healthy discussion of the common good involves some fundamental principles that are sorely lacking when we make everyday choices. Where subsidies are hidden from us, or where others foot the bill for lifestyle preferences, we make poorer decisions.

Pamela Blais, an urban planner and principal of Toronto-based Metropole Consulting, has recently published a book detailing the many ways we encourage sprawl through cross-subsidy and the mis-pricing of taxes and services, Perverse Cities: Hidden Subsidies, Wonky Policy, and Urban Sprawl. Blais’ work is based on a simple truth often overlooked: that our communities are shaped not by policy, but by the repetition of a few key location and density decisions made by developers, builders, homeowners, business owners, employees, families and institutions every day. “These decisions are shaped in no small way by prices – both absolute price levels and the relative prices of different types of development in different locations – and of different modes of transport.” Plans don’t make urban form. Everyday choices do.

When the true costs of our decisions are clearly reflected in the prices we pay for housing, transport, and utilities, we make informed decisions and finance our own preferences. Blais chronicles the many ways that taxes and fees work against this principle, and more seriously the ways that inefficient choices are subsidized by efficient ones.

Chief among the culprits for Ms Blais is the concept of Average Cost Pricing, which might also be called Feet in Oven, Head in Icebox Pricing. For example, public finance departments take large swaths of cost (like the cost of new infrastructure to support community growth) and divide these costs by the number of new residential units and amount of non-residential floor space that is anticipated in this growth. This creates an average development charge of many thousands of dollars that is assessed against each new unit, regardless of where that unit is located and how that unit affects costs! Although the total amount of required funding is thereby collected, this approach means the creation of a unit at the periphery of our communities, in a sprawling suburb, with its heavy cost burden on density-sensitive service networks, is not only given a price break, but actually subsidized by the pricing of units built in compact urban form and central locations. Buyers, unaware of these factors buried in pricing, are given a discount in the first case, and a penalty in the second.

Much is made of “free market choice” by advocates of laisse-faire planning approaches, but with cross-subsidies like the example above the market is anything but free. Blais sides with most economists in arguing for marginal cost, rather than average cost pricing. This determines the public cost of growth and network upgrades as the actual cost of adding more units both at the periphery and also within the existing network, as well as the effect of density on the cost of services. In each case the appropriate price is charged.

Municipalities are starting to tailor development charges to reflect these large differences in development costs imposed by growth, but the little done to date looks more at where growth is located, rather than equally critical factors of density and mix of use.

Once initial housing and business choices are made, using the assistance of cross-subsidies that reinforce inefficiency, the situation gets rapidly worse.

Perverse Cities does an admirable job of setting out the myriad of ways that the initial subsidy is reinforced, through our tax and utility bills. At each step the application of Average Cost Pricing subsidizes the operating and maintenance costs associated with sprawl, using dollars collected from people who have made more sustainable choices. Blais uses a term coined by others to describe this system: “Postage Stamp Pricing”. The postal system is a classic network distribution system, with highly variable costs to deliver letters along a far-flung street of 60 foot wide single family lots rather than by standing in an apartment or office mailroom stuffing slots. The cost of the first is many times that of the second, yet the price of a stamp is equal for letters to both locations and densities. Repeated not once or twice, but millions of times a day across all our service systems, the subsidy for inefficient growth is enormous.

But can we establish efficiency in our low density ex-urbs? A common well, perhaps? In snow plowing? Road repair? Sewers? No. Can we ignore all the vehicle kilometers generated by new subdivisions, retail strip malls and fast-food restaurants, and simply ask downtown condominium owners to pay the average operating cost of these networks through their property tax and utility bills? Yet we do. Each day we pay bills, and each spring we debate property taxes, with little thought to the massive transfer of money from efficient and sustainable areas of our communities to those areas that create very high costs, from areas where the transit system covers its costs through revenue to areas hopelessly subsidized.

The effect of subsidized location, building, and transportation decisions made again and again and again is played out in a cascade of network services, billings and taxes, all reinforcing last-century’s utopian dream: the sprawl that we know is economically and environmentally unsustainable.

For Pamela Blais there are clear solutions to price distortions that require changes in how development charges, property tax, and utility bills are calculated. The solutions involve data that in many cases is already collected. She advocates that subsidies should be identified, debated, and consciously applied, rather than hidden. Only then will our choices begin to tackle the sprawl that is as rampant as ever, and the future civic costs that leave our children in an economic and environmental straightjacket.