Category Archives: Urbanism

Good Design is Good Business

Numerous studies over the past decade have touted the popular phrase “Good Design is Good Business”. But with such an intangible product, how can you know that good design will be “good” for your business?

With all the great things we know design can do for your business (such as increase productivity, reduce turnover, increase sales, reduce building maintenance costs and many more) it can be difficult for designers and firms to understand the reluctance to invest in design. Perhaps you never knew what design can do? Ask Apple. They will tell you.

While the most notable studies on the topic have come out of the U.K, there is increasing recognition throughout the Globe about the connection between design and business success. With all the information available online, finding the answers you need can be daunting, but here’s a bit of an overview.

A 2005 report by the UK Design Council pointed out the main flaw to most reports relating design and business. It states: “All worthwhile plans and projects need to be based on sound evidence.” Most people in considering their business plan fail to account for how good design can benefit them, based on a lack of evidence connecting the two concepts.

In 2007 the same council published the Value of Design – Factfinder Report, summarizing the results of two pieces of research, clearly demonstrating the value of design for businesses.

The report can be found online at

Some of the most remarkable and positive findings include:

–       businesses that see design as integral don’t need to compete on price as much as others;

–       almost half of all UK businesses believe that, over the past decade, design has become more important in helping them maintain a competitive edge;

–       businesses where design is integral to operations are twice as likely to have developed new products and services;

–       two thirds of businesses believe that design is integral to future economic performance;

–       over two thirds of manufacturers believe its worth investing in design in their sector;

–       businesses that add value through design see a greater impact on business than the rest.

There are real life examples of good design resulting in good business in top earning global giants such as Apple, RIM and even Target. Think about the digital media market- Apple continues to dominate despite slightly higher prices for one main reason- quality design that keeps consumers coming back.

Think about the role design played in creating the ‘environments’ in some of the top money earning companies such as Lululemon Athletica, Starbucks, and BMW. All use design to portray their image, and reinforce their corporate brand, all which increases profits = $$$.

Design can help your business convey an image, create an atmosphere and make your company unique in a world of increasing competition. Design is proven to significantly improve sales, profits, and deliver a competitive edge to your business.

Design is what makes your space unique, makes your space functional, and can underpin success. Designers bring the knowledge, creativity and advice that can bring any project to life. Making decisions about projects involves budget, schedule and craftsmanship, and the intersection of these three priorities generates design innovation that can:

–       maximize the value of capital investment;

–       give you a cutting edge, quality product and service; and

–       save you money over the life of the building.

Rather than just creating appealing and original spaces, a well-designed building/space can result in cost savings for any business. Decreasing absenteeism, operational costs, and boosting moral, architecture is proving itself in the post recession world. Creating targeted approaches to the largest costs associated with operating a business such as heating and cooling, design can lower energy consumption and reduce costs.

A recently completed project by the Region of Niagara at its Recycling Centre applied these design based cost savings measures, creating an environmental showcase for the Region and providing a real life example of the benefits of good design. As an innovative solution to both the environmental and economic costs of regulating temperature within the plant, the design team installed solar chimneys, taking advantage of the suns energy to draw and exhaust hot summer air out of the plant, using natural ventilation principals to regulate temperatures and encourage airflow. Focused on efficiency and reducing operational costs, the re-design of the plant featured efficient lighting, and the installation of skylights resulting in a cost savings of over $12,000 annually. By installing geothermal, the design reduced the requirements for gas fired heaters in the plant by 75% achieving their goal of environmental sustainability, toward a vision for the facility in line with the basic principals of the recycling program which it houses. A major success, the Green Retrofit at the Niagara Recycling Centre acts as an example of innovation, and stands to support the phrase that good design is good business.

Although rarely associated in the minds of most people, architects can provide the design services to help you succeed. Drawing on extensive experience architects offer services that can maximize the value of your resources to achieve your goals for the present and the future. Offering free sessions to discuss your project, and review a custom design through our ON Target TM packages are available to suit any needs- with no obligations.

The only question to consider in reviewing the literature and resources available is- Do you want to improve your bottom line?

At our office, whenever we want to be reminded of the power of good design for our clients, we call up our contacts at the Independent Living Centre of Waterloo Region, and ask to speak to a new employee. After he’s finished gushing about how wonderful the ILC loft renovation is as a working environment, we can return refreshed to what we do best, helping clients achieve their goals through design!

Weekend Walk a Huge Success!

JMA’s second Jane’s Walk, held Sunday in conjunction with the Pedestrian Charter Steering Committee, was a tremendous success. Close to 30 participants young and old enjoyed the sunshine and warm temperatures, and a lively discussion of what makes for great walks. For Jane Jacobs it’s about a layering of uses and activities, short blocks and many intersections, and lively offerings from businesses and users alike. As William Whyte discovered in his ground-breaking research on successful public places, what attracts people most are other people (and the occasional turtle!).

The route included a trip through Kitchener City Hall itself, a marvelously open and useable building designed by Toronto architects Kuwabara Payne McKenna Blumberg in the early 1990’s . We exchanged stories about the places and streets we visited along the way, and catalogued ideas for improvements. One of the principles of great spaces is that there are at least 10 reasons for being there, and although Hibner Park, City Hall and its Civic Square, and several other spots along the way clearly met this criterion, there is no doubt room for improvement in many of our streets and spaces.

At the end of the walk, leaders John MacDonald and Margaret Santos were asked what keys to success we would recommend to improve our pedestrian realm, our city, and our transit system. We summed it up in two words: quality, and convenience. Make the pedestrian experience, including public transit and cycling, the most convenient option, and it will flourish. Commit to quality in the elements of that public environment by providing layers of great experience, and people will want to be there. And where there are people, there is success.

Leading Sunday’s Jane’s Walk was the newly named Pedestrian Charter Steering Committee mascot- “Martha.” Congratulations goes out to Joel Watamaniuk for entering the winning name. We hope you enjoy walking around the community in your new Converse shoes provided by Nigel’s Athletic Direct located in Market Square, Kitchener. The Pedestrian Charter wishes to thank everyone for participating and encourages everyone to walk as a way of getting around. Hope to see everyone again at next years walk!

Mill Woods Aurora

Recently our firm submitted a design for the Edmonton Park Pavilion Design Competition. Intended to promote design excellence and as part of the City of Edmonton’s commitment to “cutting edge” quality design, and ensuring that such a level of design and innovation is brought to all civic buildings, the competition was a fun way for our firm to work together to generate exciting ideas are outside the scope of our everyday work.

Our Design:

The Mill Woods Aurora Pavilion is a dance of the spirit for the many streams of culture and activity that traverse the Mill Woods community and its major public park. It engages the broadest range of visitors and passersby, as much in snowbound winter evening as warm summer day. It guides accessibility, new uses, casual meeting, and cultural connection, in addition to enhancing the existing park landscape and supporting its organized activities. It will enrich the exploration and celebration of cultural memory, volunteerism, achievement, and future possibilities across diverse heritage traditions. It provides an interactive beacon for Mill Woods’ vibrant and sustainable future.

The Design Addresses the Following Community, Urban, and Architectural Issues

Design Rationale

Rather than concentrating the design of place and shared experience to the building interior or ground plane, in an annualized landscape that is as dark and snow-covered as it is warm and verdant, we wish to offer architectural experiences and possibilities as users move freely through the Community, the Park and the design. The Pavilion will communicate strongly through all seasons, in the night environment, through many media and senses, and to the park as a whole. We believe the role of the Park and Pavilion is to engage the community and passerby as much as the active user, and we have organized the design to support this idea.

We wish to:

  • Create a sense of place that celebrates passage and journey, movement and light;
  • Design for potential ease of construction and use should the Pavilion be phased;
  • Foster a common experience of connection, of wonder, and of possibility;
  • Engage the community’s creativity and the diverse cultural and activity streams of its citizens in architectural experiences that invite exploration, touch, and further contribution to an evolving history for the Pavilion and Park.
Description of the Design and Its Achievement of Edmonton Design Committee Principles
 A Universal Scale
The Aurora Borealis is a special and shared northern experience. Our intention is to interpret and link this experience with community aspirations. Unlike its heavenly counterpart, however, the Pavilion’s Streamers of reflected sun and LED light can be openly approached, touched, used and explored by day as well as night, through its textured materials, web-based technology, lighting, and formal movement. Like the aurora, the Pavilion will be an integral part of the skyline for the Park, its surrounding streets, and adjacent community buildings.
Mill Woods consists of flowing streams of heritage, of connection and of capacity that link with 85% or more of global cultures. Each of these streams shares a common experience: of migration, of settlement, and of aspiration. Such patterns of experience are not new to Alberta’s plain. The Plains Cree, migrants themselves from the woodlands of central Canada, called the Aurora the dance of the spirits.
  • The Aurora’s Streamers            Streamer – any one of the luminous streaks that make up the aurora borealis and the aurora australis

Much like the mysterious and magical Aurora, the Pavilion’s Streamers are designed for movement and possibilities, a Dance of the Mill Woods Spirit. The texture of their stainless steel chains will sparkle in the sunlight and glisten in the rain. They create and support ice sculptures in the spring thaw, provide light shows from near and far, and can even generate waves of bubbles when children paint their surfaces with soapy solution on windy days.

Most importantly, however, the Streamers highlight community engagement, volunteerism, cultural heritage and public-spirited initiative. We strongly encourage their embellishment and decoration with brightly coloured disks engraved with the names and stories of community volunteers, athletes, leaders, and achievers. We invite further additions that acknowledge donors and contributors to the Pavilion’s construction, to further amenities in the Park and community, and to supportive programs and neighbourhood capacity-building initiatives. Informal additions of commemorative locks that carry personal meaning and connection will build tradition and help the Pavilion create a unique sense of centre for citizens of all ages. 

The Love Padlocks tradition may have originated in the Far East, but now includes over 28 countries, Rome’s Ponte Milvio, similar bridges in Paris, and districts of Los Angeles. At each of these famous locations couples place locks to symbolize their commitment. Like these examples of popular tradition, as well as destinations like Lithuania’s Hill of Crosses, the Pavilion will become a celebration of Mill Woods’ world of distinct heritages united in community achievement.

Over time, it is our hope that the Streamers of the Mill Woods Aurora will develop into delightful and luminous veils of commemorative story and aspiration. The Pavilion will become a unique, highly visible symbol of a common history, of connections to Mill Woods’ many heritages. It will be a magical addition to the Park year round and in its night environment, using light show compositions and patterns contributed by the public through the Pavilion’s web interface.

In its relationship to the open plain of the Park, the Pavilion is also evocative of a larger morphology of history, passage and movement on the Prairie landscape:

  • of stockade and trading fort;
  • of buffalo pound, and livestock fence;
  • of carved river and streambed.

Mill Woods Community Scale

Most Park visitors use the Pavilion amenities only briefly. They experience the Pavilion from its exterior as they pass through, around, or along the edges of the Park. The Pavilion will enhance the urban experience of these citizens as well as Park users. Interactive lighting controlled through internet access adds to the magic of winter festivals and creates a safe and positive night environment near the Pavilion during evening hours. The stories and commemorative function of the Streamers create connection well beyond the Park boundaries and into the community.

Working with the Park Scale

The location chosen by the City for the Pavilion is central to the Park, providing amenity for all its users. The Pavilion is an entry passage for those arriving from the south, but also a centre of activity and meeting. The orientation of the building complements the goals of the Mill Woods Park Master Plan. The Streamers of aurora extend throughout the site in the form of walkways, connecting the sports fields to the amenities at the Pavilion. The design respects and enhances the path desire lines identified by the Park Master Plan. The Aurora also

provides possible design direction for new elements, pathways, storage buildings, and other amenities that will enrich our experience of the Park.

The Pavilion’s Gathering Space

The two lobes of the Aurora Pavilion are designed to create a vibrant new public outdoor space for Mill Woods and its principal park. Oriented to admit summer breezes, yet protected from prevailing winter winds, this unique and magical space supports many scales of activity and event in all seasons:

  • as summer camp space, race start line, cinema, meeting ground, market, and centre for winter carnivals, seasonal events and cultural celebrations of all kinds;
  • for casual use and event dining that supports concession operations; for kite, chess and games rentals, impromptu croquet games and other amusements;
  • as a venue for temporary exhibitions for the Royal Alberta Museum, Edmonton Fringe Festival performances, tournament headquarters, fundraisers and contest sites, and broadcast studio for local talent shows;
  • for community connection, web-based interaction, citizenship ceremonies, fund-raising, acknowledgement and commemoration using the interactive veils that form the space.

Sustainability Principles


The project will attain LEED Silver certification through a variety of building, site, innovation and community sustainability measures that include:

  • Orientation and clerestory to provide natural day lighting and winter solar gain.
  • Recessed glazing and overhangs for protection from summer sun, with automatically operable clerestory and internal transom windows for natural cross-ventilation.
  • Wood structure from sustainably managed forests.
  • Steel elements have the inherently high recycled content of steel, and no maintenance or coating required for its stainless components.
  • Innovative rainscreen straw bale exterior wall construction on rubble trench foundations forms the building’s unique shapes cost-effectively, with durable finishes and high insulation value.
  • Foundations using rubble trench technology to below frost lines significantly reduces new concrete use and the attendant energy of its manufacture, and allows for recycling of local concrete product from demolitions.
  • Collection of all snow melt and rain water runoff, as an integral part of the architectural design. Permeable paving to central court, combined with hard surface finishes to access walkways, patio, and concession area.
  • Stormwater drainage to infiltration trenches with low maintenance, native drought resistant grasses and habitat protection, with potential below grade water collection for re-use in grey water systems.
  • High performance insulation values to roof and wall, with high reflectance-coefficient roof covering to reduce solar gain and heat island effect.
  • High efficiency gas-fired boiler or potential ground source hydronic loops with in-floor radiant heat for thermal mass storage and humidity control, programmable for daily energy savings and seasonal setbacks.
  • LED-based interior and exterior lighting controlled by sensors and web-based interactive software, exploiting colour capabilities and long life expectancy.
  • Water-bottle filling station as a focus of the gathering space, to promote alternatives to commercially-bottled water use by both sport participants and spectators.
  • Development of a landscape aesthetic and path system that allows for areas of the park to return to zero maintenance native grasses.

Technical Aspects of the Design Solution

Material and Construction Principles (with reference to the Typical Wall Detail)

  • Rubble and concrete trench foundations to below frost depth, with foundation drainage.
  • Concrete slabs-on-grade with clear finish.
  • Simple, sustainable load-bearing wood structure and straw bale exterior wall construction finished in textured, durable cement stucco. The exterior plane assembly of the bale wall incorporates a foundation drainage membrane manufactured from recycled HDPE.
  • Independent post foundation, galvanized steel post and bracket support to stainless steel top and bottom tension cable system and link-chain Streamer elements.
  • Flat roofs draining to select water leader locations, joining to the perimeter drainage system, to infiltration planting beds extending throughout and beyond building.
  • LED lighting systems, web-based programmable to exterior lighting. Webcam technology for community interaction and public oversight.

The Pavilion is a deliberately flexible offering that engages Mill Woods and its citizens in an ongoing narrative of emerging tradition, of identity and reflection, and of a community journey in harmony with economic, social and environmental sustainability.

The Bewildered House

I look out for buildings that are eloquent and truthful, making promises from the exterior and follow through in their interior. They have an uncompromising character, palpable as you experience their presence on the street and when you inhabit their rooms. Like people of strong character, I am immediately drawn to some, and others leave me cold. But either way, I know where I stand, and I am comfortable with that.

“The Backwards House” is located near Union and Mary Streets on a site that originally straddled over Kitchener and Waterloo. “Bewildered” is a more fitting adjective though. Sadly, one can say that this building never knew itself, and true to itself, now sits dazed and incongruous both on Mary Street and on King Street. Curiously I know I am standing before (or behind?) a very confused building.

Time and progress haven’t been kind to this house, but even when the ground was staked out to dig a hole for its foundations, it was already architecturally doomed to a muddled existence. The front is lovely, playfully informal with its asymmetry, its turret, its windows of different shapes and sizes, balconies and fanciful wood trim that speak of well-to-do domestic happiness and comfort. The back of this sunny home is that of a dour and imposing church!

As you walk along Mary Street, lined with trees and charming century homes, you can’t miss the surly church apse, two stories of brick wall, with scarce openings for bleak windows and doors. Not knowing how you would enter this “church”, what you find beyond is a ramshackle of left over spaces between the backs of buildings.

This house originally addressed King Street. It was well set back, over one hundred feet from the street, and one can only imagine the kind of garden it would have had. The promise is that of well-appointed landscaping to set off the best features of the house, somewhat ceremonial, distinguished, and somewhat playful. Instead there are buildings of squat shapes that line King Street and plenty of parking. The front of this house is visible only through the shadows of a narrow driveway.

Ironically, I enjoy the uncompromising and unapologetic confused attitude of this building that never fails to leave me bewildered. Don’t look for this building. It is more fun if you stumble upon it accidentally.

Guest Blogger Margaret Santos

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.

Meet me At Starbucks

My goal as an Architect has always been to serve my clients and my community with good design. It has been exciting and challenging at the same time. My most difficult challenge is finding those people who want or need good design, but don’t know where to start. My hope that by offering to “meet you at Starbucks” (or Timmies if you prefer!) I can help bring answers to any of your questions, provide you with some free advice, or have a conversation about good design.

The Architecture industry is surrounded by mystery and misconception, but we want to change that.  It is true that architects are only involved in 5% of building construction that occurs around us because people don’t realize that they can benefit from an architect’s services.

Architects don’t just design the fancy buildings that catch your eye. Architects are trained to solve any problem you put in front of them, from the smallest piece of furniture, to a house addition, to zoning changes, to the local community centre.  We know that we can bring, to any design problem, creativity and problem solving to give you exactly what you need and want.

We are trained to think of every possible solution and give you the one that best serves your needs, wants, desires, budget, for now and for your future. We hope that we can design a space, room, building, garden, or deck that will make you feel good everytime you enter it.

Now, some of you might think, Architect’s just cost extra money and design things that are too expensive for my budget.  Your priorities are our priorities, so if budget is a priority we maximize the value of your budget. We also ensure that you get a good contractor and quality work from your budget. With proper planning we can actually save you money, more than the costs for our services. We can reduce your energy costs, reduce your long-term maintenance costs, get the highest quality for your resources, increase productivity, and reduce wasted square footage.

We at John MacDonald Architect believe that architecture is a team sport and we need you to play.  We are designing something truly custom just for you.  In order to do that we need your input.  We want your project to be a valuable long-term investment, with strong personal associations.

Already know a builder? That’s great! We would love to work with them to come up with a solution.  Two minds are greater than one they say and even better if one has the construction know-how and the other with a design know-how.

Think your project is too small to need an architect? No such thing. We design a service to suit your needs and your project. We want good design services to be available to everyone because a small project may loom very large to those who live with it everyday. Whether you need a more productive kitchen for your life style, a more generous entryway, a more organized storage system, more flexible offices, property selection assistance, a building inspection, or some colour advice, we can design a service to help you.

We want to bring architecture and good design to everyone who might have a question, to everyone who thought that an architect was too much for them. No question is too small for a cup of coffee, so name a time and a place and we’ll see where it leads…

Guest Blogger- Krista Hulshof M.Arch.

A New Year of Tax Fraud


Municipalities will be ringing in the New Year by ringing the cash registers, once again collecting their revenue from one slice of citizens, and using it to subsidize another. Their New Year’s resolution should be to stop this fraudulent practice, and bring tax fairness to forms of urban development that are economically and environmentally sustainable.

This practice was highlighted at a recent conference held in Toronto, called “Retrofitting and Planning Sustainable Suburbs”. Although the conference was short on answers, a presentation by Peter Katz (Director of Smart Growth for Sarasota Florida) on long-term fiscal stability for communities was most revealing. In it, Katz compared tax revenue to urban density, with surprising results.

Both our regional and local governments generate their revenue, and incur their expenses, across a specific geography. A local comparison of three different properties in this landscape shows the subsidy from higher density to lower.

The three properties?

1) A 14 storey Downtown Kitchener condo (66 units, .7 acre including its associated street area, located on a street corner used by many of us)

2) a 7 storey historic and well-kept rental property (36 units, .5 acre including its street area, 90 feet of frontage along a street used by many of us)

3) a typical suburban home (1 unit, .12 acre, 45 feet of frontage, along a street used by only its inhabitants)

The typical suburban property is valued at about $200,000, and generates $2,250 of revenue for City and Region (ie., provincial education taxes excluded).The condo property carries $9.9 million of assessment on the municipal rolls, and generates $110,000.The rental building is valued at $2.55 million, but by virtue of its more than double tax rate relative to condo and single family home assessment, that $2.5 million generates $55,000 of revenue for the City and Region.

By comparing the revenue to the area of property and street necessitated by each, we can begin to see the enormous disparity, and the size of the suburban subsidy. The suburban home sends about $14,000 per acre to City Hall. Astonishingly, the condo sends $160,000 per acre even when the corner streets are used in the calculation. That’s more than 10 times the revenue of suburban development. The rental units cough up $115,000 per acre, taken in large part from citizens with little or no savings or net worth.

Multiply these numbers over and over, and you get the picture. Katz, in his presentation of numbers for his community, shows a similar effect on the commercial side. Strip malls and local suburban malls, with their massive parking and wasteful use of adjoining streets, generate about the same tax revenue per acre for Sarasota as suburban residences. No more.

What do our local condo owner or renters get for their tax bill? Garbage and recycling pickup, like the suburban homeowner? No. They pay extra for that, on top of their tax bill. Given that about 50% of municipal expenses are dependent on response times and density (25% of Kitchener’s costs are related to fire coverage alone over its network of streets), the tax bill could be seen as a fraud perpetrated upon sustainable development by suburban voters. Worse, the 36 unit rental property requires snow plowing, police drive-by, asphalt repairs and replacement, for only 90 feet of street. Its equivalent in the suburbs, on a dollar for dollar revenue basis, requires 1200 feet. Worse, that thirteen times length of infrastructure, paid for with utility rates common to all electricity, water and gas users, is maintained by all users equally. In addition to that subsidy, the renters must maintain their private pipes common to the units within the building, through their rent.

We’ve known for a long time that municipal property taxes transfer money from those without the means to pay to suburban voters with net worth, and the Ontario Government has directed municipalities years ago to end this practice. This directive has for the most part been ignored. Now, to grind salt into the wound, let’s add the subsidy: from sustainable, walkable, transit-friendly existing or new development to unsustainable existing and the suburbs-to-come, paid year after year. Properties generating $100,000 or more per acre are paying for municipal services for other areas of the city that incur the costs, yet generate only about $14,000 per acre. In business terms, it makes no sense whatsoever.

And what is the attitude of suburban voters to this largesse? On transit investment to support densification, or quality downtown urban infrastructure? Don’t do it. On taxes? We need relief. On municipal services? We don’t get our fair share. On change to allow density and a greater variety of uses? Don’t touch us!

Given that “Smart Growth” apparently means 40% residential development within built-up areas, and 60% outside it, and given that commercial and employment development can go where it wishes to chew more farmland, our municipal leadership will continue to massively subsidize low density development with capital and operating dollars, while talking a good game.

For this New Year, let’s resolve to end this fraud. It’s not enough to promote sustainable development. We’ve got to stop penalizing it.