Raise the Hammer
There's an interesting discussion taking place in Columbia, South Carolina concerning redevelopment efforts on the city's economically beleaguered north-side. Members of that city's council have proposed earmarking a portion of growing tax revenues from established business areas, where property values are projected to increase, for revitalization projects in adjoining poor neighborhoods and commercial districts.
The plan has drawn criticism because of its Robin Hood-like approach to development, but it's the strategic considerations, rather than the ideological debate over wealth redistribution, that's notable in the process.
Those advocating the plan have cloaked none of their arguments in the environmental or aesthetic terminology common to many brownfield vs. greenfield debates. Rather, it's the fiscal rationale of concentrating development in already-serviced areas that's being given the most weight.
The idea is to target stagnate properties not currently on the city's tax rolls and to develop them into revenue producing businesses. The strategy is charmingly simple in its immediate objective, but it has the greater indirect consequence of limiting infrastructure expenditures related to new development in the present while helping to contain maintenance and service costs over the long-term.
This logic is often alluded to in Hamilton's public discussions of land use and urban sprawl, though it's unclear that it actually informs planning approval processes in a meaningful way.
Statements from the Winona Wal-Mart deliberations showed that the city is anxious to correct for an unhealthy business-residential balance in its tax base, but the benefits of increased revenue from new development need to be weighed against the future cost-burden of a more widely dispersed service area.
As many posters to this website have noted, regardless of the amount of development fees charged, the cost of maintaining and servicing new growth areas eventually falls to taxpayers across the city, paid for with funds from the general operating budget.
Practitioners of military logistics understand the significance of spatial dimensions to the management of their supply lines. Increasing the size of an operating area correlates positively with the cost of 'servicing' that area. Personnel of UMA Engineering also understand this concept as it relates to the management of municipal assets.
In 2006, the firm was commissioned by the City of Hamilton to produce a report [PDF link] on the state of the city's infrastructure, in which it noted:
Every time a new survey or subdivision is added to the City, this increases the overall inventory of infrastructure that the City must operate, maintain, and ultimately replace. This additional infrastructure, although initially free, becomes a significant liability for the City.
Pressure for the expansion of urban boundaries continues to exist. Hamilton taxpayers should give thought to the relationship between land use and municipal expenditures, and consider the value of the operating model that they're compelled to invest in.
By Tim J (anonymous) | Posted July 14, 2009 at 23:00:09
Good article. The financing argument is a good one that is often overlooked. Professor Harry Kitchen from Trent University has researched and published many reports on this topic as well.
For example, the City of Hamilton estimates that each year at least 2% of its water and wastewater pipes must be replaced or upgraded in order to maintain a reasonable level of service. For some time now Hamilton has been averaging 1.1% replacement/updrade rate. This pattern is similar for other types of infrastructure. To balance the current budget, the cost is passed to future generations to deal with.
By Balance (anonymous) | Posted July 15, 2009 at 22:36:17
The problem with comparing Hamilton to U.S. jurisdictions is that the same laws do not apply. This isn't solely a Hamilton problem, the Province needs to step up to the plate and allow Ontario municipalities through the Ontario Municipal Act to undertake similar initiatives. We (in Ontario) seem to be 10 years behind with respect to redeveloping urban areas. We should be modelling our Provincial laws with respect to issues such as this around already established success across the world. I don't understand what the hold up is.
By A Smith (anonymous) | Posted July 16, 2009 at 00:10:31
WRCU2 >> Raising the hammer on this board is little more than a hobby.
I actually think that this board is doing quite a bit for downtown Hamilton. Just look at this quote from the Spec link Jason supplied... ( www.thespec.com/News/Business/article/596064 )
"The centre of Hamilton was the big winner, showing an average price of $153,932 during the second quarter, soaring almost 36 per cent from both last year and the $113,150 average reported in the first quarter."
Now compare that to this site's first principles
4) The downtown core is the heart of the city. Without a healthy core, the city as a whole cannot function.
Is a 36% jump in demand for homes a sign of a healthy downtown? The downtown may not be completely healthy yet, but it's making amazing improvement. Therefore, one of the main goals of this site is coming to fruition. I think that's something to be very proud of. I wonder how long it will be before the average downtown property is as high or higher than the suburbs? It may be sooner than we think.
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