To paraphrase George Orwell: all city dwellers are equal, but some are less equal than others. While this is not official policy, two hot-button issues show that the conclusion is inescapable.
Too often, new residents are being asked to pay disproportionately through development charges for public amenities that will be open to everyone. But when it comes to doling out parking permits, new residents are often barred from the public road that should be open to everyone.
Happily, a recent policy shift in Ontario has the potential to prevent at least one of these problems.
Development charges are rooted in the concept that infrastructure costs associated with new homes should be paid by the buyers of those homes. Somewhere along the way, though, city politicians figured out that they could keep property taxes low by over-charging on development levies.
In some municipalities, these charges mutated into a subsidy to existing residents.
The consequences can be profoundly unfair. A $144-million recreation centre in Kitchener is being funded almost entirely through charges on new development, with a city press release proudly noting that “there will be no impact on municipal taxes.” Why should that be, when the facility will serve the needs of both current and future residents?
Editorial: The true cost of soaring development charges on new homes
Admittedly, the short-term political logic is impeccable. Current residents vote and are represented by neighbourhood lobby groups with the ear of city councillors. Those moving to a city have not yet had the chance to influence local politics. There is no Future Homeowners’ Association.
But the moral logic is terrible. Newcomers are often younger and poorer than existing residents. They are trying to get established. It is indefensible to boost their costs to make life cheaper for those who are comfortably housed and better off.
The fiscal logic is also dangerous. A steady stream of development charges can dry up if home construction slumps.
A recent report from Toronto municipal staff noted that development charge revenues are on track this year to be only 23 per cent of the annual average over the last 10 years. Unfortunately, the average over the last 10 years was the figure staff had been using to budget for planned improvements to transit, water infrastructure and roads.
“The city’s ability to fund these projects is currently at risk based on market conditions and a slowdown in development activity,” the report warns.
The city says that this work has to go ahead in anticipation of growth, even if development slows down, noting that things such as sewers must be installed before new homes can be built. Other projects require prolonged planning and design. This is reasonable. But it’s also true that some of the work – such as increasing capacity on the crowded subway lines – will benefit existing residents as much as new ones.
Editorial: How cities are holding back home-building
In a fairer system, Canadians at the bottom of the property ladder wouldn’t pay extra for public amenities used by everyone. And they wouldn’t, at the same time, be excluded from street parking to preserve a privilege for house owners.
Concerns about parking are often at the heart of neighbourhood objections to new development. They were central to opposition this year to zoning changes to allow eight-unit apartments in Edmonton residential neighbourhoods and six-unit buildings throughout Toronto. For decades, larger buildings throughout Canada were required to have on-site parking, in part to soothe neighbourhood concerns about demand for spots on the street.
Such parking rules are thankfully on the wane, but another tactic is to explicitly exclude residents of new developments from consideration for local street parking permits.
When that provision was apparently forgotten for one recent development in Toronto, the local councillor became alarmed at its residents applying for cheap street-parking permits. Rather than acknowledging the core problem that street parking is underpriced, she convinced fellow councillors to have staff look at retroactively changing the rules to stop these residents getting permits.
One positive aspect of the provincial government’s new policy of allowing more homes near transit stations is that it should remove the need to humour house owners’ parking possessiveness in order to get projects built.
A level playing field there will hopefully be joined by one that treats development charges more fairly. No city resident should be less equal than any other.