Instead of actually following their own planning policies, our council lurches from case to case, bending to whatever interest group has the most influence at a given time.
By Ryan McGreal
Published June 18, 2009
If you want to understand who really calls the shots in this city, you need look no further than the curious disconnect between Council's approach to residential development fees and business development fees.
A couple of weeks ago, the usual cadre of residential home builders, represented by the Hamilton Halton Home Builders Association, raised holy terror over the prospect that council might raise residential development fees. They demanded instead that charges be frozen at their current rates, even though the city actually loses over $7,000 each time a developer builds a house.
The Hamilton Spectator, a "Platinum Partner" of the Home Builders Association, echoed the call to freeze development charges on their editorial page. Bowed by relentless pressure, council caved on the issue.
As I noted at the time, the logic of greenfield residential development must be understood as a false economy. insofar as suburban homes are unaffordable once their prices reflect the actual cost of servicing them. If the city loses money every time a developer builds a house, why on earth are we encouraging them to build even more - particularly given that the Province has directed cities like Hamilton to plan for more intensification and mixed use development?
After voting to continue using our property tax revenue to incentivize new home construction that will further drain the city's coffers, council is now being asked to raise development charges on new businesses - you know, developments that actually provide ongoing jobs and generate net revenue for the city - by 60 percent for industrial developments and ten percent for commercial businesses.
Like the case for raising residential development fees - a case Council just rejected - there is also a case for raising business development fees. Fee discounts since 2005 have cost the city $17 million for industrial businesses and $10.5 million for commercial businesses. The proposed increases would put Hamilton in the mid-range of GTA municipalities, albeit still lower than Burlington.
It's not clear whether the discounts have attracted enough additional businesses to cover the cost of the discount through new property tax assessments, but staff are recommending the increases to cover shortfalls in the cost of processing the development applications.
In either case, council does not seem to understand the main principle of incentives: add them for helpful activities we want to encourage, and remove them from harmful activities we want to discourage.
Now, I'm not persuaded that the straight monetary cost of doing business in Hamilton is the biggest obstacle to more business investment, particularly given that the city has cut business development fees and property taxes pretty aggressively over the past several years.
More troublesome is the regulatory morass that prospective business investors need to navigate - particularly investors hoping to build or renovate within the current built-up area. It seems that well-connected, high-profile businesses are able to buy, bully or otherwise finagle one-off exceptions and variances to clear these hurdles while smaller players are frozen out.
Consider, for example, the treatment of Dundurn Property Management, which was granted a reprieve on cash-in-lieu-of-parkland for its planned 148 unit condominium project on the vacant site of the former Thistle Club in Durand Neighbourhood.
Now contrast the Pearl Company, which sits literally just outside the official border of the downtown and faces hundreds of thousands of dollars in fees for the zoning violation of turning a derelict warehouse into a thriving, economically self-sustaining arts centre.
Of course, it's far easier just to build on greenfields. Once again, if you're big enough, council will set aside its provincially mandated requirement to provide employment lands and grant you a variance to build single family houses or big box commercial developments on those lands instead.
Ironically, the overall cost of building industrial facilities on existing urban sites may in fact be considerably lower than on greenfields, even after taking brownfield remediation into account. However, the initial financial and regulatory barriers are much higher, so developers stick with the tried-and-true, contriving discounts and subsidies along the way.
So we find ourselves doing the opposite of what we should be doing: adding incentives for harmful activities we want to discourage, and removing incentives from helpful activities we want to encourage.
Does anyone wonder why the smart money is investing elsewhere? Our city is busy pulling itself apart.
We have a Council that enacts sweeping policies and them promptly ignores them, as Peter Graefe adroitly observed in a thoughtful letter to the editor in today's Spectator:
[Council] supported the 2007 Transportation Master Plan, which recommended spending $3 million a year on active transportation, with the goal of having 10 per cent of total trips be taken by bicycle in the near term and 15 per cent in the long term.
If they feel so strongly that spending less than half of what was recommended is still too much, why did they not speak up at the planning stage?
Given their schizophrenic approach to these issues, it seems Council either doesn't have a clue or just doesn't care what its larger strategic objectives ought to be. Instead it lurches from case to case, bending to whatever interest group has the most influence at a given time.
Is anyone surprised that this same group of elected representatives is resisting Mayor Fred Eisenberger's call to ban corporate and union donations from municipal election campaigns?
Research has found that by far the donations companies, including developers, provide to municipal candidates outpaces the amount of money unions give to candidates.
A recent staff report found that in Hamilton’s 2006 municipal election, of the $767,000 the candidates received, 42 percent of the money came from corporations, and five percent from unions. And of those donations, 77 percent of the corporation contributions and 62 percent of union money went to incumbents.
And those incumbents deliver what their corporate sponsors want, again and again. The result is a political process that sacrifices the city's long-term economic, social and environmental health for the short-term benefit of developers with deep pockets.
By kevlahan_rth (anonymous) | Posted June 18, 2009 at 12:39:23
It should be noted that the land in lieu of cash deal (which is the right way to think of it) encourages greenfield sprawl and penalizes dense infill in three ways:
1. Greenfield developers have usually bought land cheaply, often before re-zoning, so the actual cost is much less than paying cash into a parkland fund. In fact, the greenspace is located in their new subdivision and so actually increases the price they can charge for their houses!
2. The cash amount paid is not based on the surface area of the development, but on the number of dwelling units which greatly penalizes high density in-fill and (again) favours single family houses on greenfield land. In fact, as in the case of the Thistle development, the cash amount required for a dense in-fill development can make the project unviable.
3. The money paid into the parkland fund can only be spent on NEW parks. Since there is usually no land for new parks in existing urban areas, the parkland money paid by an in-fill development will be spent on providing new parks for sprawl developments!
This issue is similar to the parking space requirement: both regulations encourage low-density sprawl.
By jason (registered) | Posted June 18, 2009 at 12:46:40
same old, same old. unbelievable.
Ryan, where can one see reports or stats outlining your comment that the city loses $7,000 per new home that is built? If that's true, it's absolutely revolting. Does the city lose thousands of dollars if I choose to buy a new car, or a new suit??
why should we all be losing so much money because someone wants a new home??
We've lamented the loss of the huge industrial tax base in this town for years, and now we are going to continue to give a free ride to those who are costing us money, yet raise fees on those that we desperately need here to bring in tax revenue??
Welcome to the Hammer.
By kevlahan_rth (anonymous) | Posted June 18, 2009 at 13:25:38
Ryan, you're correct. The goal should be to make the rules (and resources) align with the general principles (e.g. Vision2020, Transportation Master Plan).
The problem is that Councillors like to make decisions based on their own feelings and anecdote rather than official plans, guiding principles and informed opinion and a study of what has worked elsewhere.
In the case of Thistle Club, at least the developers had the official support of the local community and councillor, but I agree that it is dangerous to constantly make exceptions based on influence.
In general, it would be better to have clearly articulated general principles and goals, and allow flexibility to achieve those goals. This is what Vancouver does when allowing higher density in exchange for public space (downtown!), view corridors, commercial space at ground level and allocating resources based on an official transportation hierarchy (pedestrians, cyclists, transit, cars). It's worked in Vancouver because of a strong planning culture that's persisted for the past 30 years: councillors generally defer to the planners and respect the city's general goals.
By zookeeper (registered) | Posted June 18, 2009 at 15:35:29
Remember folks, you can always reply by pressing the "down" arrow.
By z jones (registered) | Posted June 18, 2009 at 15:39:28
@zookeeper okay okay, I get the hint! ;)
Moving right along.....
Jason I think the seven grand number was in the Catch report quoting city staff.
By the way RTH is on a tear lately! nice to see so much activity from you guys.
By jason (registered) | Posted June 18, 2009 at 15:53:04
You know what? I think we've all been missing the biggest key to seeing Hamilton boom and prosper. The thought just hit me. What if we capped taxes at 0.5% and limited spending?? I'm certain we'd drain Boston, Toronto, New York and other cities of their top tier companies and see thousands of young professionals moving here to take the endless supply of jobs in booming, new economy businesses.
It's really that simple.
By JonC (registered) | Posted June 18, 2009 at 16:04:36
Jason you fool, taxes need to be capped at 0.49%. Any higher will force those businesses to the greener pastures fomented when every other city realizes that the solution of lowering taxes to 0.5% cured all of our ills. Wake up! Your high tax rate of 0.5% will surely destroy us!
By A Smith (anonymous) | Posted June 18, 2009 at 19:10:40
Your rhetorical aikido is messing with my mind a little bit, but that said, you will all thank me once your property values go through the roof as Hamilton adopts the 0.5% cap on property taxes. At that point in time, I will require nothing more than a large trophy for my efforts and perhaps a $50 gift certificate from Taco Bell.
By mikeonthemountain (registered) | Posted June 19, 2009 at 00:09:34
Fine then. I'll make my own city. With 0.47% tax. And blackjack. And hookers. In fact forget the blackjack and the taxes. Screw this I'm going home.
By mikeonthemountain (registered) | Posted June 19, 2009 at 01:21:38
Where this model of development is headed is already known:
This region keeps going this way that is what is going to happen! Such waste ...
By LL (registered) - website | Posted June 19, 2009 at 09:44:33
A Smith: from the votes, the "market" has clearly rejected your "product". Why don't you stick to your principles and go out of business.
By grassroots are the way forward (registered) | Posted June 19, 2009 at 12:18:33
Corporations should not allowed to make donations in elections period. How can we trust those who accept their funding from the corporations that they will actually represent the people's needs first.
Reform for elections
By A Smith (anonymous) | Posted June 19, 2009 at 12:48:36
LL, tax rates in Hamilton are moving down ( tinyurl.com/kkf964 ), while many other GTA communities are going up, so why would you think I'm losing? In fact, while residential rates are slightly higher than 2006, every other class of property is historically (recent history) low. As for you ignorant, big government, anti individualist loving fools, where are your successes? What victories do you have other than your fancy new voting system?
By nobrainer (registered) | Posted June 19, 2009 at 13:10:48
"LL, tax rates in Hamilton are moving down ( tinyurl.com/kkf964 ), while many other GTA communities are going up, so why would you think I'm losing?"
Tax rates in Hamilton have been moving down for years, so where's all the magic new private investment? Where's all the magic new tax revenue? Last year the city had a big fat zero in total tax assessment increase, where's all the unfettered capitalism? Maybe, just maybe....there's more to running a city or even to attracting capital than lowering tax rates.
By A Smith (anonymous) | Posted June 19, 2009 at 14:27:47
nobrainer >> Tax rates in Hamilton have been moving down for years
Incorrect. Since 2006, tax rates have actually been creeping back up. As for new investment, look around the city, there has been lots of development since rates have been reduced. Just because you don't like big box stores and greenfield development, means nothing.
As for there not being any new assessment growth, according to the 2009 budget, the total property tax levy will be $649,061,131.00. In 2008 it was $624,245,604.00. That's an increase of 3.98%. When you consider that all property tax rates in Hamilton are being lowered from 2008 levels, where do you come up with the idea that assessment growth isn't happening? Show me the numbers, I would love to see them.
By grassroots are the way forward (registered) | Posted June 19, 2009 at 15:36:03
Anyways I will add this to the conversation. Just exactly what good are big box store developments? Are they for the greater good? Are they going to lift the working class to a live of dignity and fairness?
What about those in the green field areas, those who are the farmers, who struggle in our community. Why should they compete with corporations, your big box stores, that bring food from outside our borders, from who knows where?
Yes I know, it is all about plowing under the land, who cares about the food security issue our commuity is faced with or could in the future, when there is no more room to grow food.
As a community it is the people that should decide what is best for all and not just for the one who has the biggest pile of money.
By A Smith (anonymous) | Posted June 19, 2009 at 18:16:12
Grassroots >> Are they going to lift the working class to a live of dignity and fairness?
If the poor were smart, they would start demanding the government exempt all income less than 35k (pick your number) from having to pay income tax. Furthermore, they should demand the health tax be abolished, HST tax and all other taxes that hit the average Joe. If they did this, rather than simply ask for more handouts, people might take them seriously, rather than as beggars.
Property taxes are a huge drain on average people as well, since most of their assets are tied up in the value of their homes. If you want to help the people of Hamilton, you should join my call for 0.5% property tax rates and maybe even an exemption on the first 100k of a property's market value.
Unfortunately, I get the impression that most poor people are apathetic when it comes to their fate, either they are too lazy, or too stupid to stand up for themselves. As long as that is the
case, the rich people will ignore them and rightfully so.
>> Why should they compete with corporations, your big box stores, that bring food from outside our borders
Why should consumers (including low income) have to pay higher prices for food simply because local farmers can't compete? How is that fair?
>> who cares about the food security issue our community is faced with or could in the future, when there is no more room to grow food.
In a free market, land is always used for the product that brings the most profits to investors. Therefore, if food prices skyrocket, this will make farmland and all land in the Hamilton area more valuable for growing crops than for things like suburban homes. If that scenario plays out, people that live on big lots will sell their land rich homes to agri investors and buy expensive condos or townhomes. The market always changes to give people what they want most, as long as the government doesn't throw up unnecessary roadblocks.
By beancounter (registered) | Posted June 19, 2009 at 21:41:46
And just think: There will be lots of innovations to make it easier to grow food on abandoned big box parking lots!
By grassroots are the way forward (registered) | Posted June 19, 2009 at 23:48:32
A Smith: Well, it is not that I totally disagreed with you on all the taxes we pay out. Really because when you think of it, if one earns less then the low income cut off and still owes money, what does that tell you? But then it is affluent have the ways and means to influence policy that drags down the working people, of course there you are on the sideline cheering them on(the rich).
As far as your comment about the poor being apathetic or stupid, well that says something about you as an individual. They are many in the community who fight for fairness, to empower those at the bottom. I think you should be focusing in on the fact that those who have, do a pretty good job of trying to silence the voices of those that struggle.
Anyways, if you ask me, there really isn't an entity called the free market anymore, it is only the few players, the global elite who call the shots, but as usual people like you are quite daft and fall for the propoganada.
By LL (registered) - website | Posted June 20, 2009 at 00:05:43
"Your rhetorical aikido is messing with my mind a little bit..."
By A Smith (anonymous) | Posted June 20, 2009 at 01:31:31
beancounter >> There will be lots of innovations to make it easier to grow food on abandoned big box parking lots!
That innovation is called a backhoe and it's been around for a few decades.
grassroots >> But then it is affluent have the ways and means to influence policy that drags down the working people, of course there you are on the sideline cheering them on(the rich).
Here is a great example of why poor and average people are getting screwed over... Dalton McGuinty promised the people of Ontario he wouldn't raise taxes in 2003, he did it anyway (in the form of a regressive Health tax) and then the people of Ontario reelected him.
If a politician can blatantly screw people over and still get reelected, how is that the fault of the rich people?
By grassroots are the way forward (registered) | Posted June 20, 2009 at 02:20:31
A Smith: Do you have any idea of the income levels of those that actually voted liberal? In my travels I do not think too many low income people voted for the liberals either, in fact you would probably find that many low income people do not vote.
I did not vote liberal, they do not stand up for those that struggle but then neither do the conservatives.
By geoff's two cents (anonymous) | Posted June 20, 2009 at 12:42:19
". . .I think you should be focusing in on the fact that those who have, do a pretty good job of trying to silence the voices of those that struggle. . . ."
This is a sweeping generalization, with no evidence to support it, but then you go on to say:
". . .in fact you would probably find that many low income people do not vote. . . ."
In many cases, then, isn't the silence self-imposed, at least in part? This is what your argument suggests.
Grassroots, I respect your point of view, but I wouldn't be too hard on the "haves" vs. the "have-nots". Not only are there lots of the former doing valuable community work, but there are many of the latter who just downright undeserving, and many who fall in between. (As a low-income post-graduate student, for instance, I'm certainly not what anyone would call wealthy, yet my education suggests I've had more opportunity than others). A word of caution: The wealthy are not inherently evil or dispossessing, and the poor are not inherently good.
". . .but as usual people like you are quite daft and fall for the propoganada."
Hmmm. I'm not sure whose propaganda A. Smith is listening to, but many of your posts read as if you've overdosed on propaganda from the other side of the political spectrum. Not that the far left doesn't have anything worthwhile to say - It's just that it wears a little thin seeing yourself and A. Smith go back and forth on every forum blaming some social grouping for every conceivable problem in the world. How about some moderation?
On another note, kudos to the RTH staff for producing a great read over the last few months! I've thoroughly enjoyed it.
By grassroots are the way forward (registered) | Posted June 20, 2009 at 13:09:00
Geoff's two cents: Sweeping generalization? No, I do not agree with you but I respect that you have your view. During the last provincial election there was a public forum in Gore Park and I asked many people, are you going to vote? The majority of the people that attended were low income and their voices were, why bother, they do not listen anyways.
There was a forum on Poverty and Health a few weeks back that was not picked up by the main media source in this town either, why is that? I mean if I am to follow you line of thought, one would think that this important issue would of been on the front page.
Then I ask you, who is to blame, if not the system itself?
But then with the Common Sense Revolution, we seen both workers, who were strip of their rights and the poor were strip as well to be left with almost nothing. The growth of temporary work, where you have no rights, no protections, no job security. But then I get the feeling that people like you, have no gumption to actually stand up and fight for what is right.
Just actually what are you doing about it, nothing? Something? Expand your views.
By A Smith (anonymous) | Posted June 20, 2009 at 14:01:12
grassroots >> I asked many people, are you going to vote? The majority of the people that attended were low income and their voices were, why bother, they do not listen anyways.
Low income people will come out to a forum, but casting a vote at the local voting booth is too difficult? That is so magnificently stupid that it fully explains why the poor remain poor and the rich remain rich.
>> who is to blame, if not the system itself?
Stupid people who don't vote and who don't inform themselves of the issue are to blame, that's who. Look at Iran, these people are willing to die in order to have their say. If the poor in Canada are to pathetic to defend what they believe in, they deserve to be told what to do.
>> I get the feeling that people like you, have no gumption to actually stand up and fight for what is right.
The people who win power are the ones who want it the most. If the poor ever get mad enough to get off their ass and vote in large numbers, they will win power. There are more average/poor people in Canada than rich, so the numbers are in your favour. If the rich are calling the shots, it's because the poor are letting them.
By grassroots are the way forward (registered) | Posted June 20, 2009 at 14:48:32
A Smith: If I am not mistaken , the poor have rallied over the years, only to be met by the police, not so much different then what is going on over there.
By geoff's two cents (anonymous) | Posted June 20, 2009 at 15:04:01
"But then I get the feeling that people like you, have no gumption to actually stand up and fight for what is right."
A curosory glance at my previous comment will show that you and I have not yet agreed on what is right. You'd be right if you pointed out that I'm not necessarily willing to take a stand for what you think is right.
"Just actually what are you doing about it, nothing? Something? Expand your views."
I'm an academic. My interests as a historian include world empires and environmental history. I get paid a meagre allowance for expressing what I believe and having a mind open to nuance and willing to engage with others. It's not much, I assure you, and it doesn't go very far in Vancouver (It went further in Hamilton), where my rent accounts for slightly less than half of my gross income. While I'm in financial limbo waiting for this September's support to kick in, I'm spending four hours a day commuting to the only job I have been able to land (It's a temp job with no benefits or holidays, and a mediocre wage). This doesn't leave much time for preaching on street corners and the like, but a medium-term goal of mine is to become more active on behalf of the urban environment I live in. I've been flirting with the long-term notion of starting my own website.
I have to say, though, that keeping an open mind is very time consuming! It often entails questioning what other people say, not always believing those who are most convinced they are right, not holding one-dimensional, black and white views (ie. the rich being responsible for all of society's problems; the courageous and righteous poor being trodden upon by a sadistic ruling class), and lots (!!) of reading.
By A Smith (anonymous) | Posted June 20, 2009 at 15:45:45
grassroots >> the poor have rallied over the years, only to be met by the police
I am not talking about a useless rally, but just taking the time to vote. Are you saying that the police in Canada come out to block poor and average income people from voting? I have never heard of that.
By grassroots are the way forward (registered) | Posted June 20, 2009 at 16:12:57
Geoff: Well, as an academic, and your interests revolve around world empires and the environment, I would be interested in knowing just exactly what your thoughts are. How do you see the world?
I am not an academic but I have done lots of reading.
We are seeing a globalized system of empire that has many across the globe living in dire poverty, wars across the globe in the name empire, the environment is not good and who exactly is behind this? Is it the poor and downtrodden?
Have you ever read the book Toxic Sludge is good for you?
Anyways, as far as your temp assignment, at least with voices like mine, temp workers in Ontario at least have won their right to termination or severance pay and the right to stat holiday pay. That helps you as you struggle, right, that is if you were in Ontario.
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