Tag Archives: development

Does growth pay for growth?

Excellent article by Charles Hamilton in The StarPhoenix

It’s a question cities throughout Western Canada have been grappling with for decades: does new development pay for itself ? Does the city spend more money servicing new neighbourhoods than it collects from the developers who buy the lots and build houses?

A new report released by Saskatoon civic administrators that says not all costs of new suburban development are paid for by the service rates charged to developers is stirring up the debate.

“Most of the direct services – most of the capital costs to build a neighbourhood – are included in the overall developers’ fees, but there are a number things that are not covered like leisure centres and fire halls and other things,” said Randy Grauer, Saskatoon’s acting city manager.

Some cities, such as Calgary, have decided to dramatically increase development levies. Calgary Mayor Naheed Nenshi says it’s an attempt to recoup the real cost of growth.

Some planners in Saskatoon say the same model should be considered here as the city’s population continues to grow at a rapid pace.

“The city has been encouraging developers to go develop on the outskirts, and now we are paying for it because we cannot afford to maintain the infrastructure,” said Avi Akkerman, a professor of regional and urban planning at the University of Saskatchewan.

“Everything that is associated with it is unsustainable.”

Of course developers disagree

“The new areas are paying a large portion of the tax burden,” said local developer Ron Olson, a former president the Canadian Home Builders Association. “The new areas are subsidizing the older neighbourhoods.”

Olson said city planners have to be careful not to “drink the Kool-Aid on this densification.” Restricting development on the outer edges of the city will only force young families to move outside the city – to places like Warman and Martensville – where they can find more housing choices.

“Calgary is a prime example of what we are talking about. The mayor has decided that new growth and suburban growth is a bad thing, and that kind of policy is regressive. You will have a bunch of satellites around Calgary, and those satellites are because young people want to live in single family homes,” Olson said.

Actually I would challenge Ron Olson’s assertions about Calgary.  I would suggest that the Calgary satellite communities have everything to do with house price than a desire to live in single family homes.  The farther you are away from Calgary (or Saskatoon), the less access you have to amenities and then less you have to pay for housing.

Of course the other point is that it isn’t about housing, it is about the cities ability to pay for sprawling infrastructure.  It’s weird but some still see libertarian values as something that needs to be met, even in the city.

The Fall of Niagara Falls

Decades of decay, corruption, and failed get-rich-quick schemes have made the city one of the most intractable disasters in the U.S.  From Business Week:

Niagara Falls has something that sets it apart from other terminally depressed Rust Belt towns, something that makes its economic failure all the more remarkable: those falls, the 176-foot-tall cascade of thunder that is no less breathtaking for being your grandparents’ honeymoon destination. For many years the city’s route to a better future seemed straightforward, and it led to the water’s edge, where you could look across the border to Canada and see a brightly lit skyline of new high-rise hotels. "It’s a booming tourist mecca over there," Hudson said. "Over here, it’s a slum."

While the Canadians were building theme restaurants and luxury suites, the American side spiraled downward. Niagara’s median household income is now just $30,000, 40 percent below the national average, and one-fifth of its 50,000 residents (down from 100,000 in the 1960s) live below the poverty line. As of November, unemployment was 7.5 percent, lower than the national average; so many have been out of work for so long that they no longer register as part of the workforce.

There’s a litany of explanations for this, but for the last decade, through a boom and a bust, several mayors, and nonstop recriminations, a single constant has loomed over the city: the Manhattan real estate billionaire Howard Milstein. In the late 1990s, the municipal government designated a private group backed by Milstein as the "master redeveloper" of 140 acres of downtown real estate. Milstein appeared, at first glance, to be just the man to help the city finally capitalize on its natural potential. He had a hotel and other development interests in Times Square—a fabulously successful example of commercial reclamation—and he proposed to revive Niagara Falls along similar lines, as a casino-centered playground. It never happened. Today, Milstein is still sitting on an enormous swath of land, a ghost town of abandoned homes, shuttered storefronts, and vacant lots in the shadow of a closed-down factory where Nabisco used to make Shredded Wheat.

So what went wrong?

Niagara’s original sin, old timers say, was buying into a particular ideal of progress. A couple of generations ago, when the Canadians started building up their tourism sector, the Americans just laughed. They weren’t going to work as bellhops, not when there were plenty of safe union jobs at the state’s hydroelectric plant or in the heavy industries it powered. Then, after the manufacturers and chemical companies departed, leaving behind husked factories and brownfields, a second and perhaps more corrosive delusion set in—call it the fantasy of the silver bullet.

The city fathers, in their desperation, embraced a succession of capital-intensive cure-alls. In the 1970s they pinned their hopes on the convention center, soon to become a white elephant, while in the 1980s the Ghermezian brothers, who built the Mall of America outside Minneapolis, proposed to erect a massive shopping complex called Fantasyland right in the center of town. That idea collapsed in the face of local opposition. All the while, Niagara Falls kept getting poorer.