Charge Developers For Sprawl, Says Pembina Institute
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Charge Developers For Sprawl, Says Pembina Institute

A local think tank says the costs of sprawl should be paid by the sprawlers.

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At this point in time, almost everyone agrees that urban sprawl is wasteful, which is partly why we have things like provincial growth plans and municipal Official Plans to direct growth inward, toward existing city centres. But now, one local think tank is pointing out that sprawl has an actual, monetary cost—and they think developers and homebuyers should have to pay.

The Pembina Institute, authors of a study released earlier this week arguing that people would opt to live near city centres if they could afford it, has just released a followup report with policy options for making that type of housing more attainable.

Among the suggestions—including that officials educate people about the additional transportation costs that come with living in sprawl, and that property tax rates on parking lots be increased—the institute advances one proposal that makes sense on a kind of primal, eye-for-an-eye level: make developers pay for the cost of sprawl, using development charges.

Development charges are fees that municipalities make developers pay whenever they build something. Pembina has found that the majority of GTA municipalities—including, certainly, Toronto—determine the amount of these charges based on the type of development (so, one price for a single-family home, another price for an apartment unit), rather than where that development will be located. In other words, the fees are the same whether the proposed development makes efficient use of land or not.

The problem with this way of doing things is that sprawling communities require all sorts of expensive services from municipalities: kilometres of sewer pipes, water mains, sidewalks, roads, and so on. Dense communities still require those things, but make more efficient use of them. The current development-charge regime, according to Pembina, effectively “subsidizes” sprawl by assigning it too cheap a price relative to the higher cost of providing it with all those utilities.

Pembina’s proposal is to put the squeeze on sprawl by determining development charges based on location, using zoned pricing. The thinking is that this would shift the additional costs of serving sprawling communities onto the developer, and away from the municipality. If this were to happen, developers would probably pass the costs along to homebuyers, and so ultimately the people who live in sprawling communities would be on the hook.

Presumably this would free up some money for use elsewhere. And according to Pembina’s analysis, Ontario municipalities already have the authority to implement it. Sounds good, we guess?

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