Comment 105485

By jimbob88 (registered) | Posted October 21, 2014 at 11:32:56

Hamilton LRT Assessment Claim is cause for Concern

Any conclusion that there would be a property assessment boom if a Hamilton LRT were built is problematic.

The Canadian Urban Institute (CUI) Study asserts that the financial benefits of a B line LRT [1] are in the order of $82 million over 15 years. However, what the Study did not make clear is that virtually all of this development near the proposed LRT line (if indeed it were to occur) would be at the expense of property development that would have occurred elsewhere in the City of Hamilton.

The report does not include clear statements, such as those included in the 2010 Hurontario LRT Study that: “Any (LRT related) development will, however, be a transfer of development that would have taken place elsewhere in Mississauga or Brampton.” [2]

The assessment increases that would have taken place in other areas of Hamilton should be deducted from the alleged LRT scenario assessment increases to arrive at a net estimated assessment increase. The net assessment increase is a small fraction of the amount that has been implied. The same is true for development charges and permit fees.

The CUI report asserts (on Page 35) that a 1.3 % annual growth rate would occur for Hamilton with LRT, and a lower 1.2% growth rate would occur without LRT. The suggestion that the mere presence of LRT would attract additional city-wide development investment was not referenced nor verified with experienced property developers as developers were apparently not included as participants in the Study. This unsupported assumption has the effect of inflating the estimated taxable assessment by $743 million in the “LRT scenario”.

LRT does not rewrite the laws of supply and demand. Property value increases that may occur near rapid transit stations are countered by slower property value increases for properties located farther away from transit stations - a probable net sum zero game.

Light Rail Transit is an important and effective means of public transportation in cities with populations in excess of 750,000 and with downtown core employment in excess of 50,000. Other complimentary demographic conditions are also needed to warrant the implementation of LRT. For smaller cities, LRT is not viable and LRT’s alleged benefits and business cases do not withstand close scrutiny. The risks are: onerous on-going operating deficits; business and residential tax increases; and conventional transit service reductions to support a system that is not the best transit solution for the municipality.

[1] Page 8, Hamilton B Line, Value Uplift and Capture Study June 2010, Canadian Urban Institute Report [2] Page 7, Appendix 11A Business Case Analysis, Hurontario Main Street Master Plan Report

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