Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
o Introduction; Section E - Relationship to the General Plan:
▪ Paragraph 1: “The City’s General Plan, establishes a goal for the City to grow as a compact, unified City and maintain a clear definition between rural and urban uses”
▪ Paragraph 4: “The City will ensure consistency between the Housing Element and other General Plan Elements so that policies introduced in one Element are consistent with other Elements. At this time the Housing Element does not propose significant changes to any other Element of the City’s General Plan.”
o Charts 4.2 & 4.3 - Vacant and Underutilized Parcels: These two charts (Pages 61--73 & 78) identify individual characteristics of 202 separate parcels with a combined site area of 107.65 acres within the City limits that are available for new residential and commercial development. Table 4.3 provides this data in aggregate. The text following Table 4.2 states these parcels could provide an estimated 1,494 new dwelling units.
o Section C.1 - Housing Growth: The second paragraph of this section (page 25) states “For housing development beyond the 2015-2023 timeframe of the Housing Element, Watsonville voters passed Measure U (2002), the Watsonville Urban Limit Line and Development Timing Initiative, that will guide the logical expansion of Watsonville through 2025.
• In addition, the Manabe-Ow Business Park Specific Plan, adopted by the City in 2010, includes these provisions that were based on the language of Measure U and correspond with similar General Plan policies.
o Chapter 1.1 - Project Background; paragraph 3: “The proposed plan is consistent with the provisions of Measure U and is supported by Action Pajaro Valley.:
o Chapter 1.5 - Specific Plan Purpose and Authorization; paragraph 1: “The purpose of this specific plan is to provide a blueprint for the development of the project site consistent with Measure U and other provisions of the City’s General Plan.”
o Implementation Measure 3.4.11: “The City shall prepare or commission the preparation of specific plans for the new growth areas designated by Measure U:
Buena Vista I, II, and III, Atkinson Lane and Manabe-Burgstrom.” (later named Manabe-Ow)
o Several other provisions of the Manabe-Ow Specific Plan support the ULL and the concept of Measure U. For the sake of brevity, they are not all listed above. • While the rescinded Watsonville Vista 2030 General Plan is non-functioning, a look at some the polices it contained gives an indication of more recent thinking of the public and City decision-makers regarding the idea of continuing a ULL. o Policy 2.1.1 - City-Centered Development: “Urban development will occur as infill within existing City of Watsonville limits and in designated future growth areas within the Urban Limit Line. The City will continue to encourage land use
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
policies in existing urbanized areas in the Planning Area that implement the Action Pajaro Valley Growth Management Strategy.” (AKA Measure U). o Policy 2.2.1 - Annexation: The City shall pursue annexation of undeveloped and underdeveloped land between the City limit boundary and Urban Limit Line (ULL) in phases to allow efficient expansion of urban infrastructure and promote development of lands within existing urban areas before development of lands in outlying areas.”
o Policy 2.2.21 - Urban Limit Line Location: “The Urban Limit Line has been adopted by vote of the people of the City of Watsonville through the Watsonville Orderly Growth and Agricultural Protection Initiative. The specific location represents a shared vision, taking into account and balancing agricultural and open space land preservation, economic development and stability, environmental integrity, and social equity. The location of the Urban Limit Line is based on practical considerations such as: the size of parcels, location of lot lines, existing development at urban densities, environmentally sensitive areas, and other natural features such as the Corralitos Creek, Salsipuedes Creek, Pajaro River, sloughs, and topography.”
o Several additional policies of the rescinded Vista 2030 General Plan were written to support the ULL and the concept of Measure U. For the sake of brevity, they are not all listed above.
Conclusion
• The current ballot measure that will go before the voters in either June 2022 or November 2022 generally does not change the ULL or the text language that was approved by the voters in 2002 other than extending the provisions of the Measure to the year 2040. As a considerable amount of text from Measure U was and is incorporated into the City’s General Plan and Manabe-Ow Specific Plan and these planning documents have been guiding land use and development in the City since 2002 without generating internal consistency problems, and Measure U is acknowledged in the General Plan’s Housing Element, continuation of this language in these planning documents will not result in consistency problems.
• Further, the City Zoning Ordinance (Municipal Code Title 14) has been implementing the policies of the General Plan throughout the City and the Manabe-Ow Specific Plan within the Specific Plan Area in a manner that has not generated conflicts with the content of either these two planning documents. This implementation can continue if the existing language related to Measure U is retained in the General Plan and Specific Plan until 2040.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
V. Effects on the Use of Land and Meeting Regional Housing Needs California Elections Code Section 9212, Item 3
(3) Its effect on the use of land, the impact on the availability and location of housing, and the ability of the City to meet its regional housing needs.
Determination
Through innovative land use planning, the City can provide housing availability in locations throughout the city limits and meet the City’s share of regional housing needs without expanding beyond the existing ULL, as explained in following bullet points.
Background
• Watsonville’s 2005 General Plan, adopted in 1994, includes a Housing Element that provides policies to meet housing needs in the City.
• As stated in the preceding section, the Housing Element was updated in 2015 and guides housing policy through the year 2023. State law requires this element be updated more frequently than other elements of a General Plan.
• The State Department of Housing and Community Development (HCD) determines how many more dwelling units should be constructed throughout the state to meet housing needs of the population, including numbers of lower-income dwellings (AKA affordable dwelling units). Affordable dwellings are defined by the State as housing that costs no more than 30% of a gross household income. In Watsonville’s Housing Element this housing is further defined with these categories:
o Moderate income housing - defined as 81--120% of the County’s median income o Low income housing - defined as 51--80% of the County’s median income o Very Low-income housing - defined as 31--50% of the County’s median income o Extremely Low-income housing - defined as under 30% of the County’s median income.
• HCD tells each regional planning agency how much housing their region is responsible for producing to meet the overall need in the state. This is called the Regional Housing Need Allocation. The Association of Monterey Bay Area Governments (AMBAG) is the regional planning agency in this area. AMBAG tells each City and county within their jurisdiction what their individual Regional Housing Need Allocation (RHNA) is for an 8- year period. The RHNA stated in Watsonville’s existing Housing Element is 700 new dwelling units. Of this total, 406 units (59%) should be affordable rate units with the remaining 294 units (41%) at market rate cost.6
6 City of Watsonville Housing Element-2015 Update, Charts 4.3 and 4.4, pp. 72-73.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
• Watsonville is currently preparing a new Housing Element update but its proposed contents are not available to the public. Therefore, we are relying on data in the existing 2015 Housing Element update.
Analysis and Supportive Evidence
• The Housing Element identifies a list of 201 parcels with an aggregate total of 105 acres that were either "vacant" or "underutilized" within the City limits and concludes these properties have the potential to provide 1,445 new dwelling units.7 This is more than double the number of dwellings specified for Watsonville’s RHNA. • These 202 parcels also include commercial zoned properties that can be developed with either new commercial uses (e.g. retail stores, offices, etc.) or a mixture of commercial and residential uses.
• Since preparation of the Housing Element in 2015, the City has issued Building Permits for new residential projects towards meeting the RHNA. Completed projects include:
o 35 Harkins Slough Road: A
parcel with one single-family
dwelling has been converted to
42 dwelling units, named
Blackbird subdivision, located
near Ramsey Park.
o 445 Main Street: A vacant
business building was
demolished to construct a fourstory building with two retail stores and a TOGO’s eatery on
the ground level and over 40
apartment units on the upper
three floors, named The Terrace.
• Other approved projects are in the
construction phase, such as Sunshine
Gardens, which will provide 64 dwelling units at 1773 Santa Victoria Avenue. This is the portion of the Manabe- Ow Specific Plan area designated for housing. • The majority of parcels identified as “vacant” or “underutilized” remain in their same vacant or underdeveloped condition as in 2015 and remain available for future development. In addition, there are several parcels within the city limits that were not identified in the Housing Element as available for development that have since become new potential sites for future housing and mixed-use projects. 7 Watsonville Housing Element-2105 Update, Chart 4.3, p. 72.
The Terrace - A good example of a mixed-use
“smart growth” project that provides housing in
an area where traditionally only commercial uses
occurred.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
o One example is 221 Airport
Blvd. where a former school and
church parcel have been rezoned
to residential zoning. The
developer is currently working
with City staff to submit a
permit application to build 48
townhomes on the 2.64-acre site.
o Another example is the proposed
Hillcrest Estates subdivision at
the former Cluster auto
wrecking yard. If approved, this
project would construct 149
homes.
• As discussed in the previous section,
City staff is currently formulating a
Downtown Specific Plan that would
promote mixed-use projects in
downtown Watsonville. There is a
large potential for new multi-family dwelling units, similar to The Terrace project, within this limited geographic area. The higher density residential use of the downtown area was not envisioned or included in Housing Element 2015 update. New higher density downtown housing could provide many more housing units near the Metro bus transportation hub on Rodrigues Street and near the community of Pájaro that is already served by Cal Train allowing locals to connect to the Bay Area transportation network. • As discussed above, the state has recently changed land use laws to permit landowners to more readily build accessory dwelling units and duplexes on lands zoned for residential use. Even a modest uptake in the use of these new laws could provide a significant number of new residential units by 2040.
Conclusion
Whatever number the RHNA gives to Watsonville in 2023, the City has already shown its ability to utilize vacant and/or underutilized parcels within the City for providing new housing, and to a lesser extent, new commercial uses. There are many parcels that have been identified in the Housing Element that remain vacant or under-utilized. Likewise, parcels developed with singlefamily residences can now be redeveloped to provide duplexes or accessory dwelling units.
Based on data in the existing Housing Element, these properties provide adequate space for the City to meet its share of the RHNA.
The addition of properties rezoned to higher densities, including those within new Specific Plan areas that encourage housing uses to mix with commercial uses, will provide many more new housing and employment opportunities within the current ULL. This rezoning can be done with dwelling densities to meet an increase in the RHNA for 2023--2031, including meeting an increased allocation for affordable un
This property at 221 Airport Blvd. is an example of
an opportunity site now approved for 48
townhouses that was not included in the City
Housing Element’s list of underutilized parcels.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
VI. Impact on Funding for Infrastructure
California Elections Code Section 9212, Item 4
(4) Its impact on funding for infrastructure of all types, including, but not limited to, transportation, schools, parks, and open space. The report may also discuss whether the measure would be likely to result in increased infrastructure costs or savings, including the costs of infrastructure maintenance, to current residents and businesses.
Determination
Renewing the ULL will decrease public service and infrastructure costs as compared to more outward sprawling urbanization without the ULL as explained in the following bullet points.
Background
• Publicly owned infrastructure in Watsonville consists of streets, curbs, gutters, sidewalks, street lighting, the storm sewer system (e.g. the network of sewer lines), the sanitary sewer system and a domestic water system. The City also provides weekly curbside collection of trash, yard waste and recyclables.
• Streets, curbs, gutters and sidewalk are maintained by the City Public Works Department.
This department is also responsible for maintaining street lights, traffic signals, street signs and bike paths. The bike/pedestrian trails along the sloughs are maintained by Watsonville Wetlands Watch under a contract with Public Works. • The City sewer system includes a network of more than 150 miles of sewer pipelines and a treatment plant located on Clearwater Lane. A 2017 report prepared by the City Public Works and Utilities Department states that 30%--40% of the pipelines are over 50 years old and need to be replaced. The City has commenced a pipeline replacement program that will replace segments of old clay pipe with new pipelines annually. It will take several years to replace the entire length of pipeline that needs replacement.8 Adding infill development will likely increase the number of households/units that can pay to help fund this replacement.
• The City's water system serves the entire City and an unincorporated area north and northwest of the city limits that extends to Corralitos. The beach community of Pajaro Dunes is also a discontinuous part of the service area. The water system consists of 190 miles of pipelines, 14 wells, 8 reservoirs and the Corralitos Filtration Plant treatment plant that delivers to population of 66,000 customers within the service area.9 Customers include dwellings, businesses and institutions (e.g. City Hall, Cabrillo College). The 2017 report cited above states that 100 miles of pipelines are over 50 years old and need to be replaced. In addition, half of the water source infrastructure, wells and reservoirs, are 8 City of Watsonville website: Investing in Our Infrastructure 2017. 9 City of Watsonville website; cityofwatsonville.org/714/Water-Division.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
over 50 years old and need to be upgraded.
10 Adding infill development will likely
increase the number of households/units that can pay to help fund this replacement. • Weekly refuse collection is provided for over 11,000 homes, business and institutional uses. Recyclables are transported to the Solid Waste and Recycling Service Center at 320 Harvest Drive for sorting and recovery. Non-recyclable refuse is transported to the City landfill at 730 San Andreas Road. The landfill is very close to capacity.
Analysis and Supportive Evidence
• While it cannot be known where proposed annexations of lands will occur without an ULL, the annexations of land outside the ULL but within the City water service area north and northwest of the city limits could benefit from existing water and sewer infrastructure. But this area also contains substantial residential properties at urban and suburban densities and therefore would not be viewed as profitable to developers as annexing open space and agricultural lands adjoining other parts of the City. While initial infrastructure installation costs may be lower north and northwest of the city limits than other surrounding areas, all areas beyond the ULL will result in higher long-term infrastructure maintenance costs to the public as discussed in the following bullet points. • According the Brookings Institute providing water, sewer, roads, and other services to far-flung neighborhoods is very costly for local governments. More compact development with a mixture of uses, like the “Smart Growth” approach to urban form, allows more affordable housing types at increased densities, reduces land requirements per household, has lower public service costs, and reduces transportation costs. The higher housing prices that residents may pay in newly revitalized mixed-use areas will be offset by lower transportation costs, energy costs, and better access to jobs, services, and amenities in more centralized locations11
• Sprawl causes more traffic. Building or expanding roads to serve new outward sprawling development increases traffic congestion through “induced demand.” Adding road capacity and locating housing farther from commercial and recreational centers (e.g. parks, gyms, etc.) encourages people to take longer trips and more trips by car.12 The more streets and associated roadside infrastructure (e.g. street lighting, traffic signals, etc.) a city has, the higher the overall cost to maintain city infrastructure. • Sprawl requires more expensive public services than more compact growth. For example, a new development on the outskirts of a city requires police and fire services. Because this development is more distant, more officers may need to be working at the same time to cover the additional area. Alternatively, many municipalities that grow outward 10 City of Watsonville website: Investing in Our Infrastructure 2017. 11 The Brookings Institute. The Link Between Growth Management and Housing Affordability: The Academic Evidence. 2012.
12 Greenbelt Alliance, “How Urban Growth Boundaries Strengthen Communities and Protect Greenbelts”, p. 2 and Data analysis conducted by INRIX, a traffic data analysis corporation.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
address this issue by constructing new sub-stations which must be staffed and maintained separately from the main station. This too increases costs, compared to relying on a single main station, even when the main station is enlarged or renovated to address the service needs of a growing population in a more compact area.
• Much of the existing City water system and sewer system are in serious need for replacement due to age and deterioration of pipes. Without the ULL, some of the funds for pipe replacement are expected to be diverted to inspecting and maintaining new water and sewer infrastructure with expansion of these systems to serve newly annexed areas. • Various studies show that a more cost-effective urban form is achieved by urbanizing at higher densities and by consuming less land. Growth management programs suggests that they may help to reduce public expenditures by their influence on creating a more compact urban form. These studies also show the per capita cost of most services and infrastructure costs declines with increased density and rises with increasing the spatial extent of urbanized land area.13
Conclusion
Maintaining a ULL influences the development of the urban form inside the ULL to be more compact with higher density housing that is more proximate to commercial and recreational uses.
Various studies have shown that a more compact form decreases public service and infrastructure costs. This is due, in large part, because there are less miles of streets, sewer lines and other required urban infrastructure facilities to build and maintain. Of course, new infill development inside a ULL must still install services to newly constructed residential and commercial buildings. However, these services, can take advantage of connecting to existing water mains, sewer mains and similar facilities that are near the newly constructed uses.
Conversely, outward development, that relies on converting open space or agricultural lands to urban uses cannot typically rely on these types of existing facilities because they are not present in rural areas. Even the rural roads that are existing must be upgraded to provide the streets and street-side facilities (e.g. curb, gutter, sidewalk) to meet municipal street standards and streetside standards. Renewing the City ULL will be more cost effective compared to removal of the ULL to allow outward sprawl development. This will facilitate use of public funds on needed infrastructure replacement rather funding the construction and maintenance of new infrastructure.
13 J. Carruthers and g. Ulfarssom, “Urban Sprawl and the Cost of Public Services”. Environment and Planning B: Planning and Design 2003, volume 30, pages 503 - 522
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
VII. Impact on the Community's Ability to Attract and Retain Business and Employment
California Elections Code Section 9212, Item 5
(5) Its impact on the community's ability to attract and retain business and employment Determination
The agricultural land surrounding the City is necessary for economic vitality of businesses inside the City. Through innovative land use planning and use of existing available sites, there will continue to be locations inside the ULL to support existing business and to attract new business until 2040 as explained in following bullet points.
Background
• Watsonville “has a population of over 51,000. It is a rich agricultural community. The Pajaro Valley is one of the world’s largest agricultural centers famous today for its fresh berries, apples, and cut flowers.” 14 Agricultural production supports a large number of professional and good-paying jobs in Watsonville. Examples include crop protection professionals, agricultural research scientists/technicians, seed sales, equipment sales, fabrication, transportation, mechanics, cooling system repairs, office professionals, legal support, and box manufacturers to name a few.
• In recent years various light manufacturing firms have expanded Watsonville’s economic base to include electronics, high-tech, marine supplies, and construction, such as Applied Motion Products, CSE Group, Annieglass, Granite Construction and Granite Rock. 15 During this same time, local institutions, including Cabrillo College, Watsonville Hospital and Salud Para La Gente, have grown and increased their employment of local residents. However, agriculture continues to be the primary economic driver of the local economy.
• The agricultural industry is changing, to become much more technology driven, especially as we focus on robotics, green house production, biotechnology and other farm parameters. This will be a catalyst to offer the community increasingly higher paying jobs, people with higher education and research skills, and to attract industries that focus on climate smart farming techniques.
14 City of Watsonville website; www.cityofwatsonville.org/DocumentCenter/View/17125/Final-Budget-2021--2023, p.13
15 Ibid
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
• The City Housing Element includes an inventory of vacant commercial properties and under-utilized commercial properties that are potentially available for the location of new businesses.
• Restoring the natural systems of the City’s slough wetlands during the last 30 years has provided Watsonville with a newly appreciated resource benefiting residents and local business. The Monterey Bay Birding Festival, which occurred annually during 2004-- 2020, is an example of nature-based activity that added a new source of funds to the Watsonville economy.
Analysis and Supportive Evidence
• The future of Watsonville’s economic prosperity is rooted in the local agricultural industry and the growing institutional service sector. There is also a potential for a tourism/recreation industry focused on the slough system and nearby beaches. • While land in crop cultivation is located outside of the ULL, it is that crop production on rural land that is the economic driver for several agricultural support businesses located inside the ULL. Support businesses include cold storage companies, produce packing companies, testing labs and farm supply stores. Examples of some of these businesses are:
o Superior Foods - 275 Westgate Drive
o Fog City Farms - 1000 W. Beach Street
o NFS Davis Fresh - 195 Aviation Way
o Pacific Agricultural Packaging - 160 Aviation Way
o Sambrailo Packaging - Walker Street
o Pajaro Valley Cold Storage - 172 2nd Street
o Americold Watsonville - 750 W. Riverside Drive
o Cascade Refrigerated - 400 Cascade Way
o Terminal Freezers - 400 Cascade Way
o Control Laboratories - 42 Hangar Way
o Western Farm Service - 425 W. Beach Street
o Ag Grow supply Company - 449 E. Beach Street
o Tractor Supply Company - 580 Auto Center Drive
o Sand Channel Greens (irrigation) - 444 Airport Blvd.
• Similar to how the businesses listed above are necessary to support agricultural production, several other local businesses provide necessary support services to the local agricultural-support industry. Examples of such businesses are Home Depot and Big Creek Lumber. All businesses in this economic linkage will be affected if crop production is reduced by urbanizing surrounding farmland.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
• The City Housing Element identifies 45
vacant parcels with an aggregate site area of
13.3 acres and 12 under-utilized parcels with
an aggregate site area of 16.8 acres that are
zoned for commercial uses.16 These sites can
support new retail and office uses. In
addition, there are also additional sites
available to attract new business. The
Watsonville Airport vicinity and ManabeOw Specific Plan area have existing sites for new businesses that need larger buildings.
• The Specific Plan currently being formulated
for the downtown, can be done to provide
additional spaces for retail and office uses
along with new housing. There are also
vacant commercial buildings, such as KMart in the Pajaro Valley Shopping Center, that are available for new commercial use.
• By preventing encroachment on our natural
open space and agricultural areas, infill
development can foster an economic climate that will encourage new businesses where there is existing infrastructure to support business. Agritourism and nature-related activities, such as bird festivals, can create new economic opportunities for the City. • The City is experiencing new areas of business and employment, such as new pubs, Mexican food restaurants and taquerias, panadería and craft bakeries, floral gift shop and a natural foods market. “This is very exciting for the business world in the Pajaro Valley,” said Shaz Roth, CEO of the Pajaro Valley Chamber of Commerce and Agriculture. “Things are moving forward.”17
• Urban growth boundaries and limit lines combined with “Smart Growth” development of higher-density mixed-use areas promote economic prosperity. Compact development where housing is contiguous to commercial and recreational uses increases the ease of access to local businesses. When people live within walking distance of more businesses, parks, and services these proximate businesses thrive. By reducing transportation costs, residents are more likely to purchase locally produced goods from locally owned shops and services.
16 City of Watsonville Housing Element-2015 Update, Chart 4.3, p. 72 17 Register-Pajaronian, April 15, 2021
The Beer Mule Tavern, which has colocated with three locally-owned eateries and an exercise studio at the
Watsonville Airport, is a good example
of revitalizing an existing light industrial
area and converting it into a new retail
business hub. And there is still space
for light industrial uses at the airport.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
• Watsonville has rail, freeway and airport access that are assets for all local businesses.
These assets will not be impacted by the renewal of the ULL and provisions of Measure U.
Conclusion
The economic well-being of the business economy inside the ULL is inextricably tied to the vitality of agricultural production occurring outside the ULL. Several new businesses and new types of businesses have located in Watsonville during the time the ULL has been in existence.
There is adequate space inside the ULL to further attract and expand businesses, and to stimulate the local economy with the ULL remaining in place during the next 18 years. Adopting new Specific Plans that promote mixed-use projects in selected commercial and industrial areas is an additional way the City can attract both new housing and new businesses.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
VIII. Impact on Vacant Parcels of Land
(6) Its impact on the uses of vacant parcels of land.
Determination
Renewing the City’s existing ULL will encourage infill development on vacant parcels throughout the city limits which is an appropriate use of these parcels as explained in the following bullet points.
Background
• As stated in Section V, Chart 4.3 of the City’s General Plan Housing Element identifies a list of 201 parcels with an aggregate total of 105 acres that were either "vacant" or "underutilized" within the City limits. Of this total, 101 parcels have been identified as “vacant”. Fifty-six vacant parcels were zoned for residential uses and 45 parcels were zoned for commercial uses.
18 City zoning regulations allow various forms of residential uses with a Special Use Permit in all commercial zoning districts.19 • Other information in the Housing Element contradicts the data cited above as follows:
o Chart 4.2 of the Housing Element only lists a total of 64 vacant parcels.20 o The text on page 70 of the Housing Element states there are only 38 vacant parcels designated for housing. Other text indicates an additional 38 vacant parcels are designated for commercial uses (for a total of 76 vacant parcels). This appears to be an error. But even using this incorrectly deflated number of vacant parcels, the text continues to state the 38 parcels could be developed to provide approximately 63 single-family dwellings in the R-1 zoning district and approximately 235 multi-family dwellings in the RM-2 and RM-3 zoning districts. 21
• According to Chart 4.2, only 10 vacant parcels have environmental constraints that could preclude or limit development. Five vacant parcels are within the flood plain; two are between industrial buildings; one is within the agricultural buffer setback and two parcels are likely to have soil contamination.
• Readers are referred to the “Background” subsection of both Section IV: “Effects on Internal Consistency of General Plan, Specific Plans and Zoning and Section” and Section V: “Effects on the Use of Land and Meeting Regional Housing Needs’ for additional background information that is applicable to this topic. 18 City of Watsonville Housing Element-2015 Update, Chart 4.3, p. 72. 19 City of Watsonville Municipal Code, Title 14 (Zoning), Chapters 14--16, CC, CCA, CT & CN Zoning Districts. 20 Housing Element, chart $.2, pp 57--69.
21 Housing Element p. 70.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
Analysis and Supportive Evidence
• The Housing Element’s Figure 4-1 map shows vacant parcels are located throughout the City, not just in a few selected areas.
• Since identified as “vacant” in 2015, some of the 101 vacant parcels cited above have been developed or have obtained permits to begin construction. However, we have also identified other vacant parcels that were not listed in Chart 4.3 of the Housing Element. • There are additional vacant parcels that have not been identified in the 2015 Housing Element Update. One example is A 5-acre parcel on Errington road owned by Tony Campos. Therefore, it is reasonable to
assume the number of these additional
vacant parcels balance out the number of
previously vacant parcels that are currently
being developed. For this reason, it is
reasonable to continue to quantify vacant
parcels as totaling 101 properties
throughout the City.
• The discrepancy of total number of vacant
parcels discussed in the second bullet point
in the “Background” subsection indicates
the City has not conducted an accurate
count of vacant properties.
• If we use the more conservative number of
76 vacant parcels (rather than 101 vacant
parcels), the City staff calculations, conclude 38 of these vacant parcels that are designated for rehousing could provide a total of 298 dwelling units. This is 43% of the 700 units specified as Watsonville’s share of the regional housing need allocation (RHNA) for 2015--2023.
22 Using this same data there are an additional 38 parcels that are vacant which are zoned for commercial uses. Many of these properties can and should be developed as mixed-use projects that combine retail, office commercial with multifamily dwellings on the same site. City staff estimates these parcels could provide about 270 dwellings in addition to commercial uses. This would raise the number of estimated new dwellings on vacant parcels to 568 dwellings units which is 81% of the City’s RHNA.
• However, if the data in Chart 4.3 is used, the new housing numbers would be considerably greater that that in the preceding bullet point. • Vacant parcels with environmental constraints may still be usable as follows:
22 City of Watsonville Housing Element-2015 Update, Chart 4-5, p. 74. 1483 Freedom Blvd. This vacant parcel at
the corner of Atkinson Lane contains 1.77
acres.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
o Flood plain parcels could become mini parks or water retention basins for the City storm sewer system.
o Parcels between industrial buildings could be developed as heavy commercial or light industrial uses.
o Parcels with contaminated soils could be remediated and used for commercial or light industrial uses.
Conclusion
Vacant parcels designated for both residential use sand commercial uses occur throughout the City. While there are discrepancies in the number of vacant parcels shown in the City Housing Element, it is reasonable to estimate this number totaling 201 vacant parcels. City staff will need to inventory vacant sites with better accuracy in the next update of the Housing Element. Using the most conservative numbers for vacant parcels developing these properties would generate 568 new dwelling units which is 81% of the City’s existing RHNA.
However, these are not the only properties that can provide new dwellings and commercial uses.
There are also 100 under-utilized (under-developed) parcels where higher density development can occur. According to City staff calculations in chart 4.3 of the Housing Element, both vacant and underutilized parcels could generate 1,445 dwelling units, in addition to some new commercial uses. This total is more than double the City’s existing RHNA. Even if some vacant parcels are needed for future parkland (e.g. mini-parks), there are adequate vacant parcels for new residential and commercial uses to help meet the current RHNA with parcels remaining to help meet the future RNHA for 2023--2031.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
IX. Impact on Agricultural Lands, Open Space and Traffic Congestion
California Elections Code Section 9212, Item 7
(7) Its impact on agricultural lands, open space, traffic congestion, existing business districts, and developed areas designated for revitalization.
Determination
Renewing the City’s existing ULL will protect the prime agricultural lands surrounding the City from conversions to urban uses and protect surrounding open space lands from various negative impacts as explained in the following bullet points.
Background
• Watsonville area farmland is a major driver of the agricultural economy of Santa Cruz County. The total gross production value of Santa Cruz County agricultural commodities for 2020 was $636,032,000, equal to over $1.5 billion with the multiplier effect on the economy.
• If the Pajaro Valley were a county, it would rank 5th in agricultural production in California. Primary crops grown include strawberries, apples, fresh flowers, cauliflower, broccoli and artichokes. Watsonville has the largest family-owned and operated solely organic vegetable grower/shipper in the USA.
• Besides providing food for California and the rest of the nation, Santa Cruz County exports 35 commodities to 18 countries. More than $280 million a year is spent on transporting fresh and processed farm crops to worldwide destinations. Agriculture and food processing are the mainstay of the Pajaro Valley economic structure. • Our local farmland is irreplaceable not only because of its deep fertile soils, but because of the location of those soils in the moderate Mediterranean climate – mild wet winters and warm dry summers. This type ecosystem only occurs in narrow areas of five regions of the world – California coast; Chile; South Africa, Australia and the Mediterranean. These regions cover only slightly more than 2% of the world’s land areas. • The Watsonville sloughs cover about 800 acres adjacent to the City of Watsonville. The slough system has six interlinked, freshwater sloughs lying at the southern end of Santa Cruz County, in central-coast California. They are fed by the waters of the Pajaro Valley watershed. Wetlands provide water purification, wildlife habitat, flood protection, shoreline stabilization, groundwater recharge and streamflow maintenance.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
• Since the arrival of European explorers, California has lost 90 percent of its wetlands to development and land alteration. The Watsonville Sloughs — one of the largest remaining freshwater marshlands in the state’s coastal zone — provide a crucial resting place for many species of migrating birds. Among the thousands of birds and other abundant wildlife frequenting the sloughs are a variety of rare species, including 23 native plant and animal species that are listed by the federal and California Endangered Species Acts as threatened, endangered, or of special concern.
Analysis and Supportive Evidence
• Renewal of Measure U and ULL would protect our irreplaceable farmland from urban sprawl, and would enable the continuation of food production in a climate and soils that occur almost nowhere else in the world.
• Viability of agricultural lands adjacent to proposed developments would be preserved. • Open space, which comprises our unique system of wetlands that course through the City, would be protected from environmental and societal impacts, such as polluted runoff and human egress, that could result from developments adjacent to and abutting the wetlands.
• Prohibiting urban sprawl encroachment on natural areas surrounding the City will preserve key ecosystem services, including water filtration, flood water storage and runoff control, erosion control, wildlife habitat, fresh air, carbon sequestration, pollination, recreation and aesthetic enjoyment.
• Prohibiting sprawl development also provides other benefits that don’t appear on financial statements, such as reduced air pollution and climate change emissions. An acre A cane berry field in the northern part of the fertile Pajaro Valley is an example of one of the variety of crops that grow on the prime soils surrounding Watsonville.
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
of urban land with multiple households generates about 70 times more greenhouse gases than one acre in agriculture (livestock raising excepted). 23 • Renewal of the ULL will direct City Planning staff to focus on the Downtown Specific Plan and revitalizing the nearby industrial area, rather than planning for annexation and sprawl-type growth.
• Traffic congestion can be addressed with creative planning for mixed-use development, new parking strategies and improved in-city transportation systems. This issue is addressed in Section VI (Infrastructure) and Section X (Summary) of the report.
Conclusion
Urban infill development enables food security and the continuance of the local agriculturalbased economy by preserving surrounding farmland for food and flower production and necessary jobs for local residents. It recognizes importance of the prime farmland surrounding the City is a world-class resource; not merely land reserved for future urbanization. Infill development protects surrounding open spaces, including wetlands from urban encroachment and impacts to wildlife caused by human induced light and noise impacts and predation from pets. Infill facilitates the strengthening of the downtown revitalization that can be implemented to reduce greenhouse gases with fewer car trips.
23 Helen K. Cahill center for Farmland Conservation Policy Innovation and the American Farmland Trust, “Agricultural Land Conservation: An Important Part of California’s Climate Strategy”, April 2016, p. 2
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
X. Summary
The ULL Can Revitalize Our City
It takes little imagination for cities to provide new housing and commercial centers by sprawling outward and converting their surrounding open space to streets and buildings. That’s how the sprawling growth of San José, CA began. But we, supporters of renewing Watsonville’s existing Urban Limit Line (ULL), envision a more positive and imaginative future for our town.
Renewing the ULL that Watsonville has established for the past 20 years will require developers and City leaders to focus on available sites for infill development that utilizes the over 200 vacant and underutilized parcels within our city limits24 and re-imagines our downtown and other commercial areas as opportunities for innovative mixed-use projects. A mixed-use approach for existing commercial areas can revitalize them with interesting street-level stores and offices combined with residential apartments and condominiums along their side or in the upper levels above. Mixed use allows commercial, residential and recreational uses to be located in the same neighborhood rather than segregated from each other. A mixture of uses which are located proximate to each other promotes more walkabilty and less reliance on the automobile to reach daily destinations; including stores, jobs, schools and parks. People that walk more are healthier and they interact with neighborhood residents more thereby creating a stronger and happier sense of community. It is with good reason, that the name for this type of urban development is “smart growth”.
There is no reason why the Downtown Specific Plan, currently being formulated, cannot be written to provide, at least 1,000 new dwelling units over the next 10 years along with a mixture of other uses. A more densely populated downtown will revitalize our city center and provide more incentives for mass transit. There is no reason why we can’t have similar Specific Plans for focal points along the Freedom Blvd. and East Lake Avenue corridors as well. This is the type of “smart growth” that is now occurring in Santa Cruz and many other cities across the nation. By growing up rather than out, we can preserve the surrounding farmland that is so vital in employing a significant portion of our city’s residents and supporting many local agricultural related businesses.
Developing Available Land Inside the ULL is the Wiser Choice The commercial corridors are not the only resource for future development. The existing ULL also includes 168 parcels beyond these corridors and within the current city limits that remain vacant or not developed to their full potential.25 Many of these parcels adjoin each other, thereby providing opportunity sites for larger planned residential or mixed-use projects.
The existing ULL also extends beyond the city limits to include 620 acres of partially developed and marginal agricultural land in the Buena Vista area. There has been some controversy about this area located near the airport. In 2006 the Watsonville Pilots’ Association and the Buena 24 City of Watsonville Housing Element-2015 Update, Chart 4.2, p. 72 25 City of Watsonville Housing Element-2015 Update, Charts 4.3 and 4.4, pp. 72-73
Committee for Planned Growth and Farmland Protection
Report on Impacts of Renewing Watsonville’s ULL
Vista Neighborhood Association (BVNA) sued the
City over its adoption of the Vista 2030 General
Plan. Much of the litigants’ concern was
development within this part of the ULL. However,
the Superior Court decision of March 21, 2008
requiring the City to rescind its approval of the
Watsonville Vista 2030 Plan, does not mean the
Buena Vista area cannot be wisely developed in the
future for new lower density housing. The City
should work with the Pilots’ Association and the
BVNA towards providing lower density housing in
this area. In doing so, the City would provide a
diversity of future housing choices to balance new
homes built at higher densities within the city center
and other neighborhoods within the current city
limits.
The ULL Reduces the Costs for Public
Services and Infrastructure
Directing new development inward rather than outward is a wiser fiscal choice for City taxpayers. New infill development can be served by existing infrastructure rather than building miles of new streets, sidewalks, sanitary sewers, storm sewers and water lines to serve outward sprawling development. While developers may be required to pay for the initial cost of installing this type of infrastructure to serve new development, City taxpayers will always be required to pay to maintain these facilities. In theory, new development generates additional taxpayers who will fund increased maintenance costs of new infrastructure. However, tax monies go a much longer way in maintaining infrastructure when it’s in a compact form rather than a sprawled form because there is far less of it to maintain. Numerous studies have shown, outward growth will also cost more to fund City services, like police and fire protection, when these services must be provided over a wider geographic area than a more compact area.26 Renewing the City’s existing ULL is critical to protect the surrounding farmland and wetland open spaces from development. But containing development within the ULL has several more benefits. It will save tax money by reducing public service and infrastructure costs. Our ULL will also provide the impetus to create a more vigorous and innovative community through building a diversity of housing types, integrating more homes with other types of uses that will allow less use of automobiles and generate more social interaction. 26 Carruthers and Ulfarsson, “Urban Sprawl and the Cost of Public Services”, Environment and Planning B: Planning and Design 2003, volume 30, pages 503 ^ 522
This vacant 5.77 -acre parcel at 18 Eileen
Ave. near the intersection of Holm Road
and Main Street is a potential opportunity
site for additional housing or a planned
mixed-use project.
March 7, 2022
From: Impact Report by Committee for Planned Growth and Farmland Protection
Errors and Omissions of the City Report
• Fails to Address All Criterion of Elections Code Section 9212: Unlike our report, the City Report does not include an assessment of all seven topical items listed for Section 9212. Rather, it discusses just a few of the topics. A glaring omission is the City Report’s lack of discussion on impacts on surrounding agricultural lands, which is specified in item #7 of Section 9212. This is particularly alarming since the protection of agricultural land from urbanization is one of the main stated objectives of renewing the City ULL. • Number of Infill Parcels Available for New Development is Understated:
The City Report understates the infill lots available for new development and the number of dwelling units they could support. It also completely ignores the potential for existing housing stock to be developed with additional units, as anticipated and allowed by state laws like SB 9 and Government Code 65852.2.
With over 13,000 existing units, Watsonville could meet the highest anticipated housing stock need by 2040 by simply adding a unit or ADU to roughly one-fifth of the City’s existing units.
1 It also uses the highest forecasts of units needed by 2040 to fulfill housing needs. As such, the City Report uses skewed data to conclude renewing the ULL will not allow enough of the needed additional housing to be constructed.
There is no mention of the potential for new dwelling units within the Manfre Road area or the unnamed area that borders both Green Valley Road and Freedom Blvd. These two areas are both beyond the city limits but within the ULL and shown with orange and green colorings on the page 7 map of the City Report.
Pages 12--16 discuss housing potentials in other areas inside the ULL but outside of the city limits; but the Manfre and Green Valley Road areas are not acknowledged nor discussed in the remainder of the report. • Many Housing Units Now Being Built are Omitted: Several of the dwelling units currently being constructed have been omitted from the City Report data analysis pertaining to Watsonville meeting its regional housing needs allocation (RHNA). For example, the townhouses currently being constructed at 221 Airport Blvd and the 72 projected housing units on Miles Lane are not included. • Certain Information is not Factual: The map and text on page 17 of the City Report shows that, other than the FedEx facility, the 95-acre Manabe-Ow area “...is mainly undevelopable due to flood plain and peat soil constraints.” This 1 The City’s 2015-2023 Housing Element states that the City currently had 13,528 units as of 2010.
The City Report states that 2,856 additional units may be needed by 2040.
statement is contrary to the fact that City Planning staff has accepted permit applications in 2021 and 2022 for two large commercial projects on flood plain properties near FedEx. The applications propose to elevate 1-foot above flood level as required by FEMA. In addition, the 87 dwelling units now being constructed by the Sunshine Gardens project and within the Manabe-Ow area are not within a flood plain.
The map on page 19 of the City Report identifies the Hillcrest Estates site as “undevelopable parcel” (red coloring). This is false. The City has approved this site for a 147-unit subdivision. While there are soil contamination issues on this site, this problem can be remediated. The project applicant is currently working on a soil remediation plan for this project.
• Other Information Shows the Report is Biased: The listing on page 7 of the City Report titled “What has Measure U Achieved” is presented as Measure U being responsible for “0” housing units and “0” jobs being created in the Buena Vista area. This rationale is false. The reason why no dwellings or jobs have been provided in the Buena Vista area near the airport is the City’s faulty preparation of Watsonville Vista 2030 General Plan which resulted in a successful civil suit against the City. The court ruling required de-certification (nullification) of the new General Plan and the City decided to take no further planning action, and as a result, there has been no development to date in the Buena Vista area. However, this situation could be remedied to plan for and allow housing in at least some of this area.
Similarly, another entry under “What has Measure U Achieved” on page 7 shows a comparison of the 200 existing jobs (FedEx) within the Manabe-Ow area with the “2,100 jobs proposed in 2030 General Plan”. This comparison is repeated on page 8. Again, the reason there is currently a lower than expected jobs number is not the result of Measure U or the ULL. Rather, the City has not followed the guidelines of the Manabe-Own Specific Plan to attract a mixture of retail and office commercial to this area. Instead, the City has accepted project applications for warehouse-type commercial uses which have substantially lower jobs/floor area ratios than other commercial uses.
In a separate instance, pages 8, 39 and 40 of the City Report uses RHNAs for both Cycles 6 and 7 that have not been finalized and are significantly and suspiciously higher than any of the other estimates they quote on page 24 of the same report.
The report fails to provide a single mention of the new housing potential provided by the future Downtown Specific Plan currently under preparation by City staff.
The economic impact summary on page 34 of the City Report only identifies a single site (the 13.6-acre parcel at Hwys. 1 and 129) as a “strategic commercial growth area beyond the Urban Limit Line (that) could be developable in the future”. This site, the Redman House site,” is controversial and is not part of any analysis of the impacts of this Initiative. The City Report fails to identify any
other site within or outside of the ULL for commercial growth. Conversely, our report correctly identifies the Downtown Specific Plan area, which includes vacant and under-utilized parcels, as one realistic area for future commercial growth combined with new housing. We also suggest additional areas where commercial revitalization could occur by adopting other Specific Plans promoting mixed-use. By being so selective in identifying one site for future commercial growth, the City Report gives an impression that it has been prepared to promote annexation of the 13.6-acre site for a specific project rather than to assess the effects of the pending ballot Measure.
Conclusion
The City Report addresses only selected items of Code Section 9212. Further, its analysis is both incomplete and contains skewed data and factual errors. The lack of complete information and inclusion of non-factual data, including that related to housing, results in all of the data projections for housing potential with a renewal of Measure U being substantially understated and incorrect. These problems make the report inadmissible to accurately assess the impacts of passage of the ballot Measure to renew the ULL. Our following report provides a more comprehensive and factual analysis.
SHAPING OUR GROWTH
How Urban Growth Boundaries
strengthen communities and protect greenbelts
By 2040, the Bay Area will grow from 7 million to 9.3 million people. We must decide how to best make room for everyone to live, work, and play in our cities, towns and neighborhoods.
Sprawl is an expensive proposition
As housing prices escalate, some are quick to blame smart growth and UGBs, and say that expanding our cities into open space and agricultural lands will solve our affordable housing crisis. The evidence doesn’t support this view; rather, multiple studies show that sprawl is far more expensive than smart growth. A 2015 study found that sprawl costs America over $1 trillion, and can increase per-capita land consumption by up to 80% and car use by up to 60%.i
Providing water, sewer, roads, and other services to far-flung neighborhoods is very costly for local governments.
Smart growth allows more affordable housing types at increased densities, reduces land requirements per household, has lower public service costs, and reduces transportation costs. The higher housing prices that residents may pay will be offset by lower transportation costs, energy costs, and better access to jobs, services, and amenities in more centralized locations.ii
What is a UGB?
An urban growth boundary (UGB) is a planning tool for cities and towns that identifies the extent of where we locate our homes, schools, and businesses. A UGB separates an urban area from its surrounding greenbelt of natural and agricultural lands, and helps encourage compact, walkable development, especially near transit. UGBs are set for significant periods of time—typically 20 years or more. In the Bay Area, it’s a proven tool to prevent urban sprawl.
What is sprawl?
Sprawl is the outward expansion of low-density housing units, where residents must travel even short distances using an automobile, because of the remoteness of residential areas and inadequate availability of mass transit, walkways, or bike paths.
Transportation costs rise as density decreases
Suburban residents are expected to drive three times as much as urban drivers, who rely more heavily on walking, biking, and public transit.iii
A San Francisco State University study found a 10% increase in compact development and smart growth amenities resulted in a 20% decrease in vehicle miles traveled.iv It also found that building compactly was more successful in reducing vehicle miles traveled (VMT) than various taxing structures (such as a fuel charge).
Furthermore, the estimated annual costs per household to provide roads in the most sprawled communities averaged $804.74 in comparison to $19.87 in the highest density communities.v Sprawl causes more traffic
Building or expanding roads to serve new or existing sprawl only increases congestion through “induced demand.”vi Adding road capacity encourages people to take longer trips or more trips by car. A recent $1 billion infrastructure investment to widen I-405 in Los Angeles resulted in commute times one minute slower than before the widening. vii This in turn only lengthens driver’s commutes. Drivers with a 30-minute commute will spend on average 87 hours dealing with traffic delays over the course of one year.viii That's over 3½ days of sitting in congestion. Furthermore, the estimated annual costs per household to provide roads in the most sprawled communities averaged $804.74 in comparison to $19.87 in the highest density communities.ix Sprawl is harmful to our health
Numerous studies have shown how urban sprawl negatively affects our health.x Cities built around automobile use provide fewer opportunities to exercise than walkable and bikable cities.xi Vehicles release air pollutants, including ozone, carbon, and airborne particulates, that are harmful to both wildlife and humans. Air pollution is a known cause of some respiratory problems, such as asthma and lung cancer.xii Studies have linked increased VMT to rising obesity rates, diabetes potential, chronic illness effects, inactivity, and mental health impacts.xiii People living in less walkable communities have a 50% higher rate of diabetes as compared to the most walkable communities.xiv Thirty-five percent of people in walkable neighborhoods are overweight, compared with 60% in sprawl neighborhoods.xv Another study found there was a positive correlation between the degree of sprawl and the amount of traffic and pedestrian fatalities in the largest 101 U.S. metropolitan areas.xvi For every 1% increase in the study’s density metric, the traffic fatality and pedestrian rates decreased by 1.49% and 1.47%, respectively.
Sprawl makes us unhappy
One study found that people who endure a more-than 45-minute commute are 40% more likely to divorce.xvii People who live in car-dependent sprawl neighborhoods are much less trusting of other people than people who live in walkable, mixed-use, and transit-oriented neighborhoods.
Another study found that someone with a one-hour commute has to earn 40% more money to be as satisfied with life as someone who walks to the office.xviii For a single person, exchanging a long commute for a short walk to work has the same effect on happiness as finding a new love.
Sprawl residents pay more for public services
Sprawl requires more expensive public services than smart growth. For example, a new development on the outskirts of a city requires police and fire services. Because this development is more distant, more officers may need to be working at a time to cover the additional area. The further a home is from a fire station, the higher its property insurance rates to address a low fire rating.xix One study found that a fire station in a low-density neighborhood serves one-quarter of households at four times the cost of an otherwise identical fire station in a more compact neighborhood.xx Similarly, the costs of municipal services also rise as sprawl increases. Denser communities pay less to provide infrastructure and services including water, roads, solid waste, libraries, parks and recreation, governance, and more.xxi A city’s annual average household cost for public services is $1,416 in high-density areas, and up to a whopping $3,462 in sprawling areas.
Sprawl uses more water
As lot sizes increase, water consumption increases largely due to the increased irrigation needs. In San Francisco, the average resident uses just 45.7 gallons of water per day, the lowest in all of California. Smart growth development tends to have less water-consuming landscaping. A 2015 report from Energy Innovation and Calthorpe Associates found annual per-capita water use almost doubled from 25,000 gallons in “urban” development to 44,000 gallons in “standard” development.xxii An analysis comparing current Bay Area development trends to a more smart growth scenario for future development found that the smart growth scenario would reduce water consumption by 9%.
Denser development also helps reduce water lost to leaky pipes. A 2014 report from the American Water Works Association found that California leaks about 228 billion gallons of water per year from municipal water infrastructure—the pipes that move water to where we live and work. This represents 25% of the total water in the system, which is about the annual water demand for the entire City of Los Angeles. Building within our
existing UGBs instead of expanding into open spaces or agricultural lands creates less opportunities for leaks simply because fewer miles of pipes will be necessary to serve development.
UGBs promote economic prosperity
Compact and contiguous development increases the ease of access to local businesses. Smart growth can lead to increased productivity and business activity, where people live within walking distance of more businesses, parks, and services. By reducing transportation costs, residents are more likely to purchase locally produced goods, which increases regional employment and productivity.xxiii UGBs protect our natural values
The open space and agricultural lands next to our cities provide a vast range of ecosystem services. Water filtration, water storage and runoff, clean air, pollination, carbon capture, recreation, and natural beauty are just some of the services that our open space provides.
Without our natural and agricultural lands, we would have to cover the costs for providing these services. For example, if the City of New York did not protect its watershed and drinking water supplies, it would have to pay $6 billion to $10 billion in water filtration plant capital costs and more than $300 million per year in operations.xxiv There is also great economic value of open space and parks within cities. It is estimated that the parks within San Francisco alone provide $959 million in value (direct use, health, property values, tourism, cleaning and storing water, etc.) per year.xxv
Protecting our natural and agricultural lands from sprawl development also protects our water supply. In the Bay Area, about 30% of our water comes from local rivers, streams, and groundwater aquifers. More than a quarter of all the land in our region—1.2 million acres—serve as watersheds and groundwater infiltration zones that replenish these local water sources. Paving over critical water resource lands puts these local sources in jeopardy.
There’s plenty of land available inside UGBs
Plan Bay Area, our regional blueprint for land-use and transportation planning, clearly shows we have enough space within our existing urban footprint to accommodate 100% of the region’s future growth through 2040. This means all growth will be infill development or within established UGBs.
The methodology behind this analysis in Plan Bay Area was designed to meet the existing and projected housing needs of people at all income levels throughout the region. Our regional planning agencies, the Metropolitan Transportation Commission and the Association of Bay Area Governments, developed this methodology to achieve multiple goals, including increasing the supply, diversity, and affordability of housing; promoting infill development; promoting an improved intraregional relationship between jobs and housing; protecting environmental resources; and promoting socio-economic equity.
This analysis shows that there are many available opportunities for more housing within our existing urban footprint and inside our UGBs. We should focus efforts on building the region’s next generation of new homes and new jobs within this footprint.
People want to live in multi-unit housing close to transit Recent trends show people are increasingly attracted to living in dense urban areas, and urban populations are growing faster than suburban and rural areas. A recent analysis of U.S. census data shows that urban populations are growing faster than suburban or rural populations and employment centers in the country’s major metropolitan areas have faster job growth.xxvi
In particular, those aged 25-34 with a bachelor’s degree or higher level of education are migrating to the large metropolitan areas, stimulating economic growth. “In 2000, young adults with a four-year degree were about 77 percent more likely to live in close in urban neighborhoods than other metro residents. Now, these well-educated young adults are about 126 percent more likely to live in these close-in urban neighborhoods.”xxvii Younger adults prefer similar locations with urban amenities, and they prioritize short commutes. Currently, 34% of Millennials in the Bay Area live in apartments, compared to 21% of Gen Xers and 11% of Baby Boomers.
The same number of Millennials intends to remain in apartments in the future.xxviii The Urban Land Institute found that the construction of multi-family housing in urban locations in the Bay Area increased from 35% of total housing construction in the 1990s to nearly 50% in the 2000s; in 2010, it represented 65% of all housing construction. It projects that demand for multi-family housing will increase as seniors downsize and seek greater access to shops and services. Indeed, the current single-family housing stock provides a large supply relative to future demand, and an oversupply is projected by 2040.
Greenbelt Alliance’s Grow Smart Bay Area report found that if the Bay Area redevelops opportunity sites with homes and businesses in ways that are consistent with community visions, and if city plans succeed, our cities and towns have plenty of room to accommodate all our new residents and workers.
Done right, infill development will improve the quality of life in our neighborhoods, with safer streets, more homes people can afford, and more services close by. Focusing growth within our existing cities and towns will also protect the iconic landscapes that provide us with local food, clean water, and places to enjoy the outdoors.
i Victoria Transport Policy Institute and LSE Cities. Analysis of Public Policies That Unintentionally Encourage and Subsidize Urban Sprawl. March 2015. ii The Brookings Institute. The Link Between Growth Management and Housing Affordability: The Academic Evidence. 2012. iii Sustainable Prosperity. The Cost of Sprawl. 2014 iv Dr. Sudip Chattopadhyay. Do Smart Growth Strategies Have a Role in Curbing Vehicle Miles Traveled in California? A Further Assessment Using Household Level Survey Data. The B.E. Journal of Economic Analysis & Policy, 2012. v David Thompson. Suburban Sprawl: Exposing Hidden Costs, Identifying Innovations. University of Ottawa, 2013. vi Gilles Duranton and Matthew A. Turner. The Fundamental Law of Road Congestion: Evidence from US Cities. 2011. vii Data analysis conducted by INRIX, a traffic data analysis corporation. viii TomTom. TomTom Traffic Index: Measuring Congestion Worldwide. ix David Thompson. Suburban Sprawl: Exposing Hidden Costs, Identifying Innovations. University of Ottawa, 2013. x David B. Resnik. Urban Sprawl, Smart Growth, and Deliberative Democracy. American Journal of Public Health, Oct 2010. xi Howard Frumkin, Lawrence Frank, and Richard Jackson. Urban Sprawl and Public Health. 2004. xii David B. Resnik. Urban Sprawl, Smart Growth, and Deliberative Democracy. American Journal of Public Health, Oct 2010. xiii Sustainable Prosperity. The Cost of Sprawl. 2014. xiv A. Motluk. Neighbourhood Health. University of Toronto Magazine, Winter 2013. See also, for example, V. Russell-Evans.
Expanding cities and expanding waistlines: Urban sprawl and its impact on obesity, how the adoption of smart growth statutes can build healthier and more active communities. 2009. xv Howard Frumkin, Lawrence Frank, and Richard Jackson. Urban Sprawl and Public Health: Designing, Planning, and Building for Healthy Communities. 2005. xvi R. Ewing, R. Schieber, and C. Zegeer. Urban Sprawl as a Risk Factor in Motor Vehicle Occupant and Pedestrian Fatalities.
American Journal of Public Health, Sept 2003
xvii Erica Sandow, Umea University. On the road: Social aspects of commuting long distances to work. 2011. xviii Alois Stutzer and Bruno Frey. Stress that doesn’t pay: the Commuting Paradox. 2004. xix Steve Mouzon. Costs of Sprawl- Part 1. Original Green, Mar. 2011. xx Todd Litman. Understanding Smart Growth Savings: Evaluating Economic Savings and Benefits of Compact Development, and How They Are Misrepresented By Critics. Victoria Transport Policy Institute, 2015. xxi Sustainable Prosperity. The Cost of Sprawl. 2014. xxii Energy Innovation and Calthorpe Associates. Moving California Forward – How Smart Growth can Help California Reach its 2030 Climate Target While Creating Economic and Environmental Co-Benefits. 2015. “Urban” development is defined as moderate to high density urban centers, consisting largely of multifamily and attached single-family homes, with some smaller lot single-family homes. “Standard” development is defined in part as largely consisting of separate-use, autooriented development. xxiii Todd Litman. Understanding Smart Growth Savings: Evaluating Economic Savings and Benefits of Compact Development, and How They Are Misrepresented By Critics. Victoria Transport Policy Institute, 2015. xxiv See New York State Department of Environmental Conservation’s New York City Watershed Program xxv The Trust for Public Land. The Economic Benefits of San Francisco’s Park and Recreation System. 2014. xxvi Joe Cortright. City Report: Surging City Center Job Growth. 2015. xxvii Joe Cortright. City Report: The Young and the Restless and the Nation’s Cities. 2014. xxviii Urban Land Institute. Bay Area in 2015. 2015.
REPORT
OCTOBER 2013
SUBURBAN SPRAWL:
EXPOSING HIDDEN COSTS, IDENTIFYING INNOVATIONS
Sustainable Communities
BY: DAVID THOMPSON - ©CanStock Photo Inc /iofoto
ACKNOWLEDGEMENTS
The author thanks: Andrew Bevan for a warm and productive collaboration that led to the establishment of the Sustainable Communities program and the initiation of this report; anonymous interviewees from the property development industry, municipal government, academia and the non-profit sector for giving freely of their time and insights; Stephanie Cairns and Mike Wilson for many exchanges of ideas and for helping to steer this report through reviews; Dana Krechowicz, Brittany Richardson and Barbara Hayes for steering it through production; Allison Thompson for skilful research under tight timelines; Dana Krechowicz, Stephanie Cairns, Alexander Wood, Pamela Blais, Noel Keough, David Amborski, Alex Long and Michael Cleland for very helpful reviews of drafts; Karen Sherlock for careful and accurate copy-editing; Brittany Richardson for professional design and layout; Jack Dylan for the infographic design; and Jennifer Wesanko for the communications strategy for the report's release. The author takes full responsibility for the content.
AUTHOR David Thompson1
Sustainable Prosperity is a national research and policy network, based at the University of Ottawa. SP focuses on market-based approaches to build a stronger, greener, more competitive economy.
It brings together business, policy and academic leaders to help innovative ideas inform policy development. c/o University of Ottawa, 555 King Edward Avenue, Ottawa, ON K1N 6N5 613-562-5800 x3342
SUBURBAN SPRAWL:
EXPOSING HIDDEN COSTS, IDENTIFYING INNOVATIONS
EXECUTIVE SUMMARY
For thousands of years, cities and towns were built at a human scale. Even large cities were walkable. Then, within the span of two lifetimes, cities and towns were completely transformed. Instead of being built for people, they were being built for automobiles. They sprawled.
Sprawl has a number of characteristics: low density of development per hectare; rigorously separated uses (e.g., long distances between housing and retail); “leapfrogging” past existing areas of build-up, leaving undeveloped gaps; and/or dependency on the automobile. Most of all, sprawl is characterized by development on previously agricultural or natural “greenfield” sites.
Sprawling, suburb-dominated municipalities are now common worldwide – and predominant in North America. While 81% of Canadians now live in urban areas, half of metropolitan residents are in the suburbs, and suburbs are growing 160% faster than city centres. Although sprawl is common, it is still in the experimental stage, and we don’t know how this experiment will work out. The signs suggest we will need to be more aware of the hidden costs and consider innovative ways to create denser urban form.
CAUSES
Why have the suburbs grown so fast? Much of the literature places the blame on municipal plans and zoning rules. However, while such plans and rules allow for sprawl and even shape it, they don’t require it. There is however a demand for sprawl; people and firms have been choosing the suburbs without considering some of the other costs. Why is that? A key factor is price: it’s cheaper to buy a house in the suburbs. In a 2012 survey, 79% of Toronto-area residents said prices influenced their choice of location; the survey concluded that housing affordability, not personal preference, may be driving homebuyers to the suburbs. Likewise, for firms that have a choice of location, the suburbs are generally cheaper.
Prices are lower in sprawling areas for a number of reasons. Distance from city amenities is one reason, but it is not the only one. Markets don’t exist in a vacuum; they exist in a framework of government policy and law, and are heavily influenced by it. For example, several decades of government spending on major free-to-use highway systems has enabled daily longdistance commuting. Furthermore, the ongoing policy failure to address the other costs of road use (such as illness, injuries and climate change) subsidizes and perpetuates automobile use and suppresses the price of transportation to and from suburban locations.
II E xec u tive s umma r y
Most significantly, undercharging developers for necessary infrastructure and municipal costs created by new greenfield developments artificially distorts the market in favour of sprawling development, though some municipalities are starting to examine the underlying costs. Utility pricing that fails to reflect the higher costs of servicing sprawling areas is another hidden subsidy.
COSTS OF SPRAWL
The costs of sprawl are many and diverse. Some of these costs are counted, meaning they show up on financial statements.
Other costs are hidden – they don’t show up on financial statements, but they are real and substantial. Different stakeholders pay for sprawl in different ways, either directly or indirectly. However, it is important to realize that we all—businesses, governments, and homeowners-- bear the costs in the end.
Governments and their taxpayers absorb many of the costs of development directly and in future infrastructure liabilities.
Municipalities can pay a significant financial cost for sprawling development. Sprawling suburban development requires new infrastructure and thus new capital spending. When a new development is approved on the fringes, municipalities get additional property tax revenues, but they also pick up new costs, including liability for future infrastructure maintenance and replacement costs that continue indefinitely, and rise over time. In the inital wave of sprawl, these costs were not understood.
Development charges help municipalities recover some of these costs from developers but not all of them. Municipalities are beginning to understand the burden these costs place on their communities. In Edmonton, for instance, the City picks up all the capital costs of fire and police stations, and portions of some roads and recreation facilities. It also covers all the costs of maintenance, repair and renewal of the infrastructure, including pipes and roads. The costs to Edmonton of new suburban developments will exceed revenues – by a very large margin. Across just 17 of more than 40 new planned developments, costs to the City are expected to exceed revenues by nearly $4 billion over the next 60 years.
Edmonton is not alone. Peel Region recently determined that new development was not paying for itself. Calgary Mayor Naheed Nenshi has started calling these hidden costs the "sprawl subsidy." Some muncipalities are starting to ask questions and find savings. In established areas, much or all of the required infrastructure already exists, and so redevelopment and infill development typically entail significantly lower municipal capital spending. Halifax Regional Municipality (HRM) recently found that it could save hundreds of millions of dollars by reducing the expansion of low-density sprawling development and opting for more dense urban development. Calgary found that by adopting a denser growth pattern that used 25% less land, it could save $11 billion in capital costs alone.
Today's transportation systems further mask the costs of sprawl. The vast majority of roads in Canada are free to use, but they aren’t cheap to build or maintain. Governments in Canada spend almost $29 billion on roads every year – far more than they spend on transit, rail, air, marine and all other transportation modes combined. Fuel taxes, licence fees and all other motor vehicle payments cover only a little over half of that cost; $13 billion is subsidized by other sources.
This large subsidy to road use is overshadowed by other costs that don’t appear on financial statements: air pollution, climate change emissions, noise, delay from traffic congestion, and losses and injury from collisions. Estimates of these costs range upwards of $27 billion per year. Parking is also often “free” or heavily subsidized. Based on US estimates, the cost in Canada is in the tens of billions of dollars per year.
Suburban households can end up driving about three times more than households close to the city centre, with consequent costs to household budgets and to the economy. Higher transportation costs for extra car ownership and fuel cancel out some of the household budget savings from lower home prices. By thinking about the long-term costs differently, consumers could reconsider the preceived benefits of sprawl. For instance, eliminating one car from a Calgary household’s bills—an average savings of about $10,000 per year--would put up to 18 times as many homes within financial reach (depending on income level). Clearly, the real cost of a suburban house to individuals and families is much higher than its sticker price. To address this in the future, home buyers may start considering the costs of more than just the properity at the time of purchase.
On the social side, the unquestioning expansion of sprawl obscures statistics on more motor vehicle collisions, higher E xec u tive s umma r y III
climate change and smog emissions, and higher levels of obesity, diabetes, and other chronic illnesses that also impose significant costs on the economy. For example, in Toronto smog emissions from automobiles cost the economy $2.2 billion per year and kill an estimated 440 people per year.
From yet another angle, businesses pay the costs of sprawl every business day. Roads congested by commuter traffic delay freight and raise delivery costs. Long-distance commuting, as well as the mental and physical health problems associated with sprawl, raise employee absenteeism while reducing productivity.
Finally, sprawl encroaches on natural areas surrounding municipalities, stressing and even eliminating key ecosystem services, such as water filtration, storage and runoff control, fresh air, erosion control, pollination, recreation and aesthetic enjoyment. The total value of such services provided by the Toronto greenbelt has been estimated at $2.6 billion per year.
INNOVATIONS
Municipalities from St. John’s to Vancouver have identified goals for the reduction of future sprawl and the creation of more liveable communities. However, little progress has yet been made, and the majority of population growth still occurs in the suburbs. Fortunately, there are communities examining the costs and finding innovative options. There is a growing body of experience that shows that public policy can shift price signals and transform markets to reshape municipal sprawl and create more liveable communities. They can also help to boost the economy and, by addressing hidden costs directly, balance municipal government finances.
Canada has an enormous stock of existing suburbs, a rising population and a growing interest in reducing the extent of future greenfield sprawl. These forces have sparked an interest in redeveloping existing suburbs, or “retrofitting suburbia” – the redevelopment of vacant lots, abandoned malls and big-box stores, inner city surface-parking lots, abandoned industrial (brownfield) sites, decaying older suburbs, as examples. What's needed is to use policy instruments to correct the price relationships currently encouraging sprawl while at the same time revitalizing urban cores and existing suburbs. These changes will raise property values for existing owners and help to achieve the urban form goals now being adopted by municipalities.
While prices have the advantage of allowing for “choice,” it is important to bear in mind that choice isn’t everything: equity, economic mobility and social stability are important, and spending choices are more restricted for those with lower incomes.
There is a need to ensure fairness – to consider equity, economic mobility and social stability when designing pricing policies.
Below are examples of policy tools and innovative communities across the country that have begun to address the hidden costs of sprawl and design alternative approaches.
DEVELOPMENT CHARGES
Development charges, which help defray municipal costs associated with new development, can be adjusted to reflect the higher costs imposed on municipalities by sprawling development. Development charges can be calculated based on the location in which the development occurs. For example, the City of Kitchener’s suburban residential development charges are 74% higher than those for central neighbourhoods. For non-residential buildings, suburban charges are 157% higher.
Similarly, Ottawa has higher charges for development outside of its greenbelt. Hamilton provides a 90% exemption from development charges in the downtown area. Calgary recently doubled its development charges on new suburbs. Peel Region also doubled its charges.
UTILITY CHARGES
Providing services to sprawling areas tends to be more expensive. For example, a study of municipal wastewater systems in the Great Lakes area found that operation and maintenance costs can be twice as high in low-density areas. Municipalities can charge for utilities based on costs related to frontage (property width), and many do so. The City of Terrace charges $.65/ foot for water main while Winnipeg charges $.95/foot for water main and $2.95/foot for sewer main. Such charges help create a financial incentive for denser development.
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PROPERTY TAXES
Several options exist to use the tax system to address sprawl.
Property taxes are calculated by multiplying the assessed property value by the tax rate. The tax rate can be varied by property class. Some Montreal boroughs have lower rates for multi-unit buildings, thus encouraging denser development.
Adjusting tax rates by location could also help reduce sprawl, if rates were to be reduced in central areas and raised in outlying areas. Provincial legislation determines the tax rates available; Ontario’s Municipal Act, for instance, would require amendment to make such a change.
Another option is to levy higher taxes on the land’s value and lower (or no) taxes on the buildings on the land. This “land value taxation” would encourage redevelopment of parking lots and underutilized land in city centres – thus taking some of the demand away from sprawl. Several cities in Pennsylvania have adopted land value taxation.
Finally, municipalities can offer special reductions. For instance, Windsor has a property tax assistance program for redevelopment of “brownfield” (abandoned industrial) properties, which encourages development in established areas.
Ontario has reduced tax rates for farms, which encourages farmers to continue farming instead of selling their land to developers.
TRANSPORTATION PRICING REFORM
Providing and boosting subsidies to transit, car-sharing and active transportation can level the playing field with motor vehicle subsidies. Such changes would encourage more density and less sprawl and municipalities continue to call for more investment in transit.
Fuel taxes can be adjusted to cover the costs of roads. Canada’s are among the lowest fuel taxes in the developed world.
Higher fuel prices can reduce the advance of sprawl and low density housing, while boosting inner city growth. Provincial governments can share the higher revenues with municipalities, or provide municipalities the power to levy such taxes (as Metro Vancouver has).
Parking pricing can be reformed to charge users the costs of “free” parking across municipalities – including in suburban shopping malls. Road use can be charged for directly. Highway 407 in Southern Ontario has a fully automated toll system.
Vehicle registration and licencing fees can also be set on a distance-travelled basis to reward less driving and encourage denser development.
ECONOMIC BENEFITS OF DENSITY
Filling in the spatial gaps in cities and increasing urban density can bring about what economists term “economies of agglomeration”: spreading the fixed costs of infrastructure over more businesses and households, reducing costs on a perunit basis. This also gives firms more potential workers to choose from, resulting in better employment fit and higher labour productivity. Job seekers also have more employers to choose from, reducing unemployment. The greater density of firms and employees results in knowledge spillovers, within sectors and between sectors. Urban density also improves the access of firms to suppliers and markets. And proximity of firms in related or complementary industries allows for productivity gains through specialization and outsourcing.
Such economies of agglomeration boost economic growth, and it appears that, as the economy tends toward being information-based, that association will grow stronger. In the Greater Toronto Area, for instance, population growth has accelerated downtown, in 2006–2011 exceeding growth in the surrounding regions of Peel, York-Durham and Halton for the first time. The downtown population is both younger and better educated, and they report that being close to work and public transit are their top two reasons for living downtown. Employers are moving downtown to attract this workforce and access the market.
EQUITY AND FAIRNESS
Pricing reforms should be carefully designed to address unfair impacts on lower-income Canadians. Some reforms can be beneficial. For instance, raising property tax rates on single-family dwellings while reducing rates on multifamily rental dwellings (as some Montreal boroughs have done) will tend to be more progressive than flat rates across the board, or rates that are higher on multifamily dwellings.
E xec u tive s umma r y V
However, sometimes a particular revenue-raising instrument can have a regressive consequence. Focusing on the combined costs that determine housing affordability--housing plus transportation--can compensate. The revenues can be used to support transit, build truly affordable (well-located) housing, or support social services. What matters is not whether an individual element of a policy package is regressive, but whether the package overall is more regressive than the alternative.
Finally, the overall distributional impacts of sprawl pricing reforms should be borne in mind. Reducing further sprawl reduces vehicle use and the smog emissions that disproportionately harm lower-income people. Making housing in central areas with good transit less expensive provides living arrangements that are truly more affordable (rather than distant houses with low sticker prices and expensive automobile dependence).
FEDERAL AND PROVINCIAL ROLES
Other levels of government can support municipal innovation, recognizing their influence on what municipal governments can achieve in restraining future sprawl. Provincial legislation provides and shapes the municipal capacity to employ pricing policy instruments (property taxation, charges, fees and levies, and other matters). For example, provincial governments restrict the authority to collect development charges.
Under existing legislation, some reforms that municipalities could take to change the prices and create incentives for denser development are impossible. Yet, some larger cities have been given expanded powers under charters. This model could be rolled out to other larger cities, and general municipal legislation could be revised to expand powers of all municipalities to address sprawl.
In addition, provincial and federal governments could revise their own policies in order to support municipalities that are addressing sprawl. Transit investments, carbon pricing, highway tolls and higher fuel taxes, and improved regional governance arrangements can make it easier for municipalities to manage sprawl.
CONCLUSION
The main driver of sprawl is prices. Prices have a profound impact on the decisions of firms and individuals, including decisions about where to build new developments, and where to buy houses and site businesses. Currently, price structures encourage sprawl while obscuring significant costs, creating a series of 'suburban myths.' By more closely examining both costs and alternatives, we can turn prices around and make them reward infill development, brownfield development and suburban retrofitting. When we do so, we will reap significant economic, environmental and municipal budget benefits.
The time is right to recognize a shift in attitude and growing body of innovative practice across the country. Municipal governments are studying the financial costs of sprawling development and the long-term liabilities it imposes. Major cities are exploring revenue-raising mechanisms to finance much-needed transit improvements, while citizens are open to the idea of taxes and user fees to support municipal services. With a better understanding of the costs and opportunities, perhaps we can better challenge our historic assumptions and adopt policies that will create towns and cities that work better for individuals, businesses and governments.
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E xec u tive s umma r y VII
CONTENTS
ACKNOWLEDGEMENTS I
EXECUTIVE SUMMARY II
INTRODUCTION 1
SPRAWL AND ITS CAUSES 2
PRICES 2
WHY ARE PRICES LOWER FOR SPRAWL? 3
THE COSTS OF SPRAWL 3
WHO PAYS FOR SPRAWL? 3
MUNICIPAL INFRASTRUCTURE & OPERATIONS 5
DATA ON MUNICIPAL COSTS 6
ROADS AND ROAD USE 6
PARKING 6
CLIMATE CHANGE 7
SMOG 7
PERSONAL HOUSEHOLD COSTS 10
HEALTH IMPACTS 11
ECOSYSTEM SERVICES 11
MUNICIPAL ALTERNATIVES AND INNOVATIONS 11
PRICING 12
DEVELOPMENT CHARGES 14
UTILITY PRICING REFORM 15
PROPERTY TAX REFORM 15
LAND VALUE TAXATION 15
PROPERTY CLASS TAX REFORM 16
SPATIAL-BASED REFORM 16
TARGETED TAX REDUCTIONS 16
TRANSPORTATION PRICING REFORM 16
TRANSIT, CAR SHARING, AND ACTIVE TRANSPORTATION SUBSIDIES 16 PARKING PRICING 17
FUEL TAXES 17
ROAD USE PRICING 20
DISTANCE-BASED PRICING 20
INFORMATION 20
EQUITY AND FAIRNESS 20
DIVERSE INCENTIVES 21
FEDERAL AND PROVINCIAL ROLES 22
MUNICIPAL AUTHORITY 22
POLICY ALIGNMENT 23
CONCLUSIONS 24
ENDNOTES 25
C ontents VIII
INTRODUCTION
For ten thousand years, cities and towns were built at a human scale. Even large cities were walkable. Then, within the span of two lifetimes, cities and towns were completely transformed. Instead of being built for people, they were being built for automobiles. This was unprecedented in
human history.
Sprawling, suburb-dominated municipalities are now
common worldwide – and overwhelmingly predominant in
North America. However, it is important to bear in mind that suburban sprawl is still in the experimental stage. As with other experiments, we don’t know how it will work out, and what the unintended consequences will be.
Fly over any North American municipality and you will see a pattern of development that creates enormous costs. The costs of sprawl range from smog and climate change
emissions, to chronic disease and emergency room
admissions, to higher costs and reduced productivity for businesses and financial liabilities for governments. Some of these costs increase our current tax rates as property owners and income tax payers. Some costs are hidden in long-term government liabilities. Others appear as private costs, including losses of personal income and business
profitability. Still others are unaccounted for financially – climate change and habitat loss, for example – but are both real and substantial.
Fortunately, sprawl is a problem that can be addressed. We can slow the future advance of sprawl and revitalize
established areas with new development. Natural areas and agricultural land can be preserved, while vacant buildings and lands are brought to life. We can supply truly affordable housing – housing that doesn’t simply shift the costs onto homeowners’ transportation and property tax bills. We can provide businesses with locations that attract workers and boost productivity. We can help manage costs and balance the bottom line of municipal and other levels of government.
How can the costs of sprawl be reduced? How can we
reshape development? The answer is clear: we need to
address the causes of sprawl.
For decades, we have understood the problem, but we have attempted to address it in a way that does not tackle the underlying causes. Cities have employed a range of planning and regulatory instruments in an attempt to rein in sprawl.
Some of these have had an impact, but sprawl proceeds at an astonishing pace. New construction continues to
encroach on natural spaces and prime farmland, while urban businesses and neighbourhoods struggle to stay afloat.
Municipal policies, zoning and development plans have
often been criticized for facilitating sprawl. While they do allow for sprawling types of development, they don’t require it. The main driver of sprawl is prices. Prices have a profound impact on the decisions of firms and individuals, including decisions about where to build new developments, and
where to buy houses and site businesses. Currently, price structures encourage sprawl. And as long as prices pull new development toward the fringes of our cities, citizens, businesses, governments and the economy will continue to suffer the costs of sprawl.
Public policy can shift prices to encourage development in established areas and protect natural areas and agricultural land from further incursions of sprawl. Cities and other levels of government have at their disposal a range of policy
instruments that can adjust prices that currently cause sprawl.
The literature on sprawl is broad and goes into far greater depth than the space of this overview permits. This report surveys the main topics and provides sources to enable the reader to dig into areas of particular interest. The next section of this report explores the many ways that prices encourage sprawl. While some of these prices could be
regarded as market-determined – reflecting basic dynamics of supply and demand – many others are the direct result of past government decisions on regulation and budgets, at all levels of government.
The report then discusses some of the main costs of sprawl – both costs that show up on financial statements and those that are hidden. These costs are truly massive; they are of a scale that makes addressing them not only a local, but also a national, priority.
The next section of the report discusses some of the ways that governments can reshape prices to help rein in sprawl.
There are many policies that municipal governments can
employ. There is also room for policy co-operation; provincial governments can expand municipal capacity, and provincial and federal governments can align their policies to support municipal policies. Such policy changes not only can help address sprawl but also can boost the economy and help
balance government finances.
Finally, the report concludes by reflecting on the opportunity for cities that work better for individuals, businesses and
THIS REPORT IS ABOUT SUBURBAN SPRAWL AND HOW WE CAN REDUCE ITS FUTURE GROWTH AND SUBSTANTIAL COSTS BY ADDRESSING ITS PRIMARY DRIVER: PRICES. 1 I nt r od u ction
governments. Cities are beginning to address the causes of sprawl, for good reasons. A national conversation about sprawl is beginning – a conversation that is based on
evidence and could lead to the development of the political will to make important and necessary change.
SPRAWL AND ITS CAUSES
There is no universally accepted definition of sprawl. However, sprawl as an urban form does have a number of characteristics, not all of which may be present in a given case:
• Low density. Sprawling developments tend to have a
lower density of uses (e.g., housing) per hectare of land than is typical of more central, urban neighbourhoods.
• Separation of uses. Sprawling development tends to
have different land uses (e.g., housing and retail)
separated, often by considerable distances.
• Leapfrog development. Sprawling development often
takes place beyond the margins of existing built-up areas, leaving gaps that further reduce overall density.
• Automobile dependence. Sprawling development –
whether residential or other – tends to require the use of automobiles for transportation.
• Fringe. Sprawling developments take place on lands
that are distant from traditional urban cores, on
“greenfield” sites that were previously agricultural or natural.5
That last, locational, point is consistent and perhaps the defining characteristic of sprawl: simply put, sprawling development is sprawling.
In several decades of literature on sprawl, there has been widespread recognition of the ways in which municipal
regulatory policies (e.g., planning and zoning rules) have contributed to sprawl. Municipal governments have
approved development plans and zoning bylaws that
anticipate greenfield developments with low density, a
strict separation of residential from other uses, and often inadequate or non-existent pedestrian infrastructure. These plans and rules do contribute to sprawl.
However, they are not the whole story. Development plans don’t actually require anything to be built. A municipal plan could be adopted and nothing built if the demand for sprawling development were not present. Likewise, zoning bylaws
don’t create or prompt sprawl; they manage some aspects of its form. No development plan or zoning bylaw says that new developments have to occur in sprawling suburbs.
It may be that the prevalent identification of planning and zoning rules as a factor in sprawl is due to the prominent role that urban planners have played in drawing attention to the problems of sprawl. However, there are clearly
other factors at play; the underlying demand for sprawl is created elsewhere.
PRICES
“Where people choose to live (in the city core,
existing suburbs or new greenfield suburbs), the
types of buildings they live in, where business
people choose to locate their businesses … [these
decisions] are all highly influenced by price.”
– NATIONAL ROUND TABLE ON THE ENVIRONMENT AND THE ECONOMY6 Property prices are a key driver of sprawl. The influence of prices can be illustrated by a choice facing a typical
homebuyer – a growing family with a limited income,
searching for a three-bedroom house. Given the choice
between a house near the centre of town that costs
$600,000, and one at the fringe that costs $300,000, most will be forced to choose the suburban house because that’s what they can afford.
A 2012 survey of Toronto-area residents confirms that price is key to location decisions: 79% said price influenced their choice of location, and 81% said that if home price were not an issue, they would give up a large-lot home to get a
smaller residence in a walkable area with good transit.7 Many businesses are subject to the same pressures. For
some businesses, location is determined by their market, or a crucial input. Others can choose location. Other things being equal, if faced by the choice between an expensive space in a downtown office tower or a cheaper space in a suburban business park, many firms will choose the latter.8 If facing higher shipping expenses due to traffic congestion getting in and out of town, firms sensitive to freight costs may opt for warehouse or production space near a suburban highway interchange.
WHERE DO CANADIANS LIVE?
Globally, people have been migrating to cities for decades, and now more people live in cities than in rural areas. Like other developed nations, Canada is primarily an urban nation; the proportion of Canadians living in urban areas has been rising for more than 150 years and now stands at 81%.2 Approximately two-thirds of Canadians live in large urban areas (those with populations over 100,000).3
What those numbers don’t reveal is that half of the residents of metropolitan areas actually live in suburbs, and suburban growth is proceeding at over 160% the rate of growth in city centres.4 The statistics substantiate the visible reality:
relatively small city cores, sometimes with ribbons and nodes of density huddled around transit lines and stops, surrounded by many kilometres of low-density suburbs.
S p r awl & its C a u ses 2
Simply put, prices influence a lot of decisions for individuals and firms – including decisions on where to locate.
Development plans and zoning rules will shape new
suburbs, but without the demand, those suburbs wouldn’t exist. Demand creates suburbs, and prices shape demand.
It is not hard to see why prices are an important driver of sprawl. All other things being equal, individuals and families like a low price (or at least what they perceive as a low price – see discussion below under Personal Household Costs).
Firms are required to maximize profits, and keeping costs down is essential to maximizing profits.
In a nutshell, sprawl occurs because a building on the edge of town is cheaper. But why is that?
CONSUMER PREFERENCE OR PRICE?
Advocates for sprawl frequently argue that the cause of sprawl is simply consumer preference: sprawling suburbs exist because homebuyers chose to live in the suburbs.
This is true in a narrow sense; people who bought a house in the suburbs did choose to buy that house. But why? The
answer for many, according to a survey in the Greater Toronto Area (GTA), is quite simple: 79 percent chose to live where they do based on home cost.11
“Drive until you qualify” is a mortgage affordability expression that neatly captures the relationship between location and housing price. Prospective buyers whose incomes can’t
support a mortgage in central parts of town are advised by lenders to look further out of town, where sticker prices are lower – often by tens or hundreds of thousands of dollars. The claim that buyers prefer the suburbs hides the reality that many can only afford a house in the suburbs. 12
Sprawl advocates also claim that buyers actually want certain features that come with sprawling developments, such as larger houses and bigger yards. The same GTA survey
investigated homebuyers’ preferences if home prices were equal. It found that while a detached single-family home is the most important attribute hen choosing where to live, large houses and big yards are less important to GTA residents than walkable, mixed-use neighbourhoods, short commutes to work, and easy access to frequent rapid transit..
Another argument is that homebuyers select suburban
neighbourhoods as safer for their kids. Yet the risk of violent death for young people (between the ages of one and 24) has more to do with automobiles than crime,13 and sprawl means more time spent in automobiles. Automobile collisions kill several hundred young Canadians every year. Injury is the leading cause of death of young people in Canada, and motor vehicle collisions are the leading source of fatal injuries.14 Contrary to the claims of sprawl advocates, sprawl is not merely an outcome of consumer preference, but rather it is an outcome of price.15 The benefits of sprawl are largely internal (private) and related to reduced housing costs.16 WHY ARE PRICES LOWER FOR SPRAWL?
Markets don’t exist in a vacuum. They exist within a
framework of government policy and law, and are heavily influenced by it. Markets can also be distorted by government policies, or their absence.
For example, several decades of massive government spending to build free-to-use highways has enabled daily longdistance commuting. It has also reduced long-distance food transportation costs,9
thus reducing the profitability of local
farming and the value of farmland around cities and towns.
Distance commuting and low-price farmland make it more
attractive to build suburbs in greenfield areas.
The suburban housing market in its current form would not exist without that free-to-use road network. And the market in its current form continues to be indirectly subsidized by ongoing government spending on road maintenance,
repair, replacement, expansion, clearing, lighting, policing, emergency medical services and other road-related costs.
Furthermore, the ongoing policy failure to internalize the externalities of road use (e.g., illness, injuries and climate change) amounts to a subsidy to automobile use and
suppresses the price of transportation to and from suburban locations.
Undercharging developers for municipal costs caused by
new greenfield developments artificially distorts the market in favour of sprawling development. Utility pricing that fails to reflect the higher costs of servicing sprawling areas is another hidden subsidy.
Bearing in mind the influence of public policy on markets and prices, we can begin to reformulate the question.
Instead of asking “why is sprawl cheaper?,” the more
germane question is “how should we change the policies
that make sprawl cheaper?” This is discussed in the sections below on policy solutions.10 It is important first, however, to get a sense of the costs of sprawl.
THE COSTS OF SPRAWL
The costs of sprawl are many and diverse.17 Some of these costs are counted, meaning they show up on financial
statements. Other costs are hidden – they don’t show up on financial statements, but they are real and substantial. They are termed “externalities” and economists have been
quantifying them for decades.
WHO PAYS FOR SPRAWL?
Different stakeholders pay for sprawl in different ways, either directly or indirectly. However, it is important to realize that we all bear the costs in the end (Individual costs mentioned below will be expanded upon in the following sections). 3 S p r awl & its C a u ses
Businesses pay the costs of sprawl every business day.
Roads congested by commuter traffic delay freight and raise delivery costs. Long-distance commuting, as well as the mental and physical health problems associated with
sprawl, raise employee absenteeism while reducing
productivity.
Homeowners in sprawling areas find themselves
dependent on automobiles for transportation, contributing to increased injury risk from collisions and rising obesity levels due to physical inactivity. Smog emissions from
automobile use affect residents of neighbourhoods that
commuters drive through in order to reach central areas.
Compact neighbourhoods with lower municipal infrastructure costs end up subsidizing low-density areas due to the
structure of development charges.19 Household budgets
are impacted by the fuel costs associated with long
commutes.
Governments pay many of the costs of development
directly, for instance, paying for new roads, pipes and other infrastructure and services used by developments. These costs are often higher per unit for sprawling neighbourhoods than they are for denser, central neighbourhoods.
However, this premium is rarely reflected in development charges or property taxes. There is also a legacy liability for
EXTERNALITIES
In the ideal exchange in the marketplace, the full costs of producing a good or services are included in the price. However, in the real world, markets don’t obey theories.18 For many goods and services, the market price doesn’t tell the full truth about costs.
The classic example is a factory producing a good and releasing smoke that causes illness to its neighbours. The costs of ill health are not included in the price of the good; neither the company nor the buyer bears the associated health-care costs. Those costs are said to be “externalized” from the market transaction; they are termed “externalities.” Those health-care costs do appear on the financial statements of health agencies and are ultimately picked up by taxpayers.
However, those financial statements generally don’t identify the causes of the costs.
Furthermore, many of the costs of emissions do not appear on any financial statements (e.g., losses of productivity) and so are further hidden. Economists can generate estimates of such costs, and they are substantial. However, they aren’t incorporated in prices.
Such market failures create economic inefficiency. Because the cost of the good is artificially low, it is overproduced – produced at a level higher than the “socially optimal” level.
Governments should, and do, take steps to reduce and eliminate externalities. “Getting the prices right” means addressing not just financial subsidies but also the externalities. Governments often do so through regulation, e.g., by stipulating limits on polluting emissions, which helps to internalize the cost by requiring polluters to install pollution control equipment.
Another way governments address externalities is by adjusting market prices to take externalities into account directly – by raising a price (through a charge, user fee or tax) or reducing a price (rebate, credit, loan or grant). This kind of policy instrument provides an ongoing financial incentive on the producer to internalize the externality. This is known as a dynamic incentive; the more producers reduce the externality, the more money they make or save. Regulatory standards, in contrast, provide a static incentive; once the standard is met, there is no incentive to make further improvements.
Pollution is a negative externality, but some externalities are positive, e.g., education and health care. These provide benefits not only to the individuals directly involved but also to others, like employers and the broader community. In such cases, the appropriate pricing adjustment is a subsidy (e.g. publicly funded education and health care).
In the case of sprawl, there are significant external costs, some of which are discussed below. However, the benefits of sprawl are mainly internal (profits, reduced housing costs), resulting in an overproduction of sprawl.
TABLE 1: EXAMPLES OF NEGATIVE AND POSITIVE EXTERNALITIES
NEGATIVE EXTERNALITIES
(FISCAL POLICY: TAXES, CHARGES, USER FEES)
POSITIVE EXTERNALITIES
(FISCAL POLICY: REBATES, CREDITS, LOANS, GRANTS)
Water wastage Transit
Energy wastage Education
Traffic congestion Preventive health care
Derelict land and suburban sprawl Urban revitalization
Habitat destruction Community facilities and parks
C ost of S p r awl 4
governments: infrastructure maintenance costs continue
indefinitely, and rise over time. Governments also pay
indirectly – for example, federal and provincial governments covering health-care costs related to diseases linked to sprawl. Municipal governments are spending money on
climate change impacts caused partly by excessive
automobile use, and on preparing for and adapting to
climate change.20
MUNICIPAL INFRASTRUCTURE & OPERATIONS
When a new residential development (or industrial or
commercial development) is built on the fringes of a
municipality, a variety of new infrastructure investments are required. Some of these infrastructure costs are covered by the developers and are then passed on to buyers. Developers can cover costs directly (sometimes termed “in-kind”) or indirectly (by paying development charges to the
municipality). However, many of the costs are left to the municipal government, which translates into higher
property taxes and other taxes across the entire municipality. To the extent that federal or provincial grants cover some costs, they are passed along to an even wider set of taxpayers.
In Edmonton, for example, developers pay for sewers,
underground electrical cables, roads and sidewalks, water mains and a handful of other costs.21 The City and its taxpayers pick up the rest of the infrastructure costs, including fire and police stations, portions of arterial roads, recreation facilities, transit centres and libraries. In addition, the City covers all operating costs – including transit, refuse collection, snow clearing, drainage, and police and fire protection. Finally, and importantly, the City covers the costs of all infrastructure maintenance, repair and renewal. Edmonton is not alone in covering many of the current and future costs of new
suburban developments.
The net cost to a municipality can be quite high. In the Edmonton example, it appears the cost to the City of new suburban developments will exceed revenues from those
new developments. Across just 17 of the more than 40 new developments underway or planned in Edmonton, net
costs have been projected to exceed revenues by nearly
$4 billion over 60 years.22 The City has not published data on what the other twenty-plus planned developments will cost taxpayers.
Certainly, the problem of new developments causing net
financial losses is not confined to the City of Edmonton.
Other municipalities and regions are becoming more aware of the same problem. For instance, the Region of Peel
recently doubled its development charges after determining that new development was not paying for itself.23 “Staff has given us all kinds of financial statements proving that development is not paying its way,” said Mississauga Mayor Hazel McCallion. “It’s not my opinion here. The facts are on the books. We are going into debt in a big way in the Region of Peel.”24
Of course, development that takes place in any part of a city can entail costs to a municipal government. However, in established areas, much or all of the required infrastructure already exists, and so redevelopment and infill development typically entail significantly lower (sometimes zero)
municipal capital spending. Sprawling suburban
development, on the other hand, requires new infrastructure and thus new capital spending.
This results in a city being responsible for a larger stock of infrastructure, which means higher maintenance and
renewal costs in the future. Roads eventually crack and develop potholes, sidewalks crumble, and pipes decay and begin to leak. Repair and maintenance costs rise to the point where it makes financial sense to replace the aged infrastructure. This happens a few decades after the infrastructure is put in place. Turning back to the Edmonton example, the cost of the 17 developments is projected to exceed revenues in each and every year. However, the net loss to the City is projected to rise dramatically 30 years after initial construction, increasing by five-fold.25
Other cities have found similar results. In 2005, Halifax Regional Municipality (HRM) estimated the cost of services for a range of development densities.26 HRM found that on a per-household basis, the costs of the lowest-density
development were more than three times higher than highdensity urban development. The costs of many key infrastructure elements are related to distances covered (longer pipes and, particularly, roads cost more than shorter ones).
HRM subsequently adopted a regional plan that set a goal to have 25% of growth take place in urban areas. The existing trend was 16%. HRM recently commissioned another study
to determine the net financial savings that could be obtained by meeting the goal of the plan, and by exceeding it (using 40% and 50% urban growth scenarios). The study concluded that HRM could save nearly $66 million by 2031 through
achieving its urban densification goal, and $715 million by achieving the 50% urban growth scenario.27 Note that such a short timeline (22 years) would exclude the substantial infrastructure renewal costs; the savings from higher density likely would be much larger in the longer term.
TABLE 2 – HALIFAX REGIONAL MUNICIPALITY
PROJECTED SAVINGS DUE TO URBAN DENSITY28
REGIONAL GROWTH –
URBAN FRACTION
NET SAVINGS
2009-2031
16% (Trend) 0
25% (Goal) $66 million
40% (Scenario A) $337 million
50% (Scenario B) $715 million
5 C ost of S p r awl
Calgary undertook a similar study, with similar findings. It compared the capital costs of new infrastructure for existing patterns of development against those of a denser growth pattern recommended in the Plan It Calgary process. The recommended pattern, which would use 25% less land,
would be 33% less expensive to build – resulting in a savings to the City of more than $11 billion in capital costs alone.
Operating costs were also much lower for the denser growth pattern; at the 60-year point, the savings would be on the order of $130 million per year.29
The City of London found that over a 50-year period
sprawling growth would entail capital costs $2.7 billion higher, and operating costs about $1.7 billion higher, than for a compact growth scenario. 30
These municipal losses amount to an extra subsidy to new suburban development. The financial cost of that subsidy is enormous, and puts a strain on municipal budgets – a strain that will grow larger in future years.31
DATA ON MUNICIPAL COSTS
Generating this type of data on the municipal costs of
sprawl can be transformative to how municipalities look at growth. For example, some Edmonton city councillors are now openly questioning whether further developments
should be approved in the absence of cost-benefit analyses.
Obtaining data on whether a new development is going to make money or lose money for a city is good business-like management. Indeed, it raises the question of why such
decisions were ever made without the relevant data. Very few businesses make significant decisions without assessing both the benefits and the costs.
For many municipalities considering reining in sprawl, the objection often voiced has been “if we don’t approve it, the next municipality over will get all that development and all the property taxes that go with it.” This may be true; it is also true that the next municipality over will also get a lot of costs – perhaps billions of dollars more than revenues.
The Federation of Canadian Municipalities (FCM) has
consistently drawn attention to the fiscal challenges facing cities, particularly infrastructure management costs. FCM is surveying its members in an effort to determine how many municipalities have data on whether new suburban developments yield net revenues or net costs. Some municipalities are collecting this data, but not all have done so.32
ROADS AND ROAD USE
Road use is currently free of charge on the vast majority of roads in Canada. However, the cost of roads is certainly not zero. Governments in Canada spent almost $29 billion on roads in 2010/11 (see Table 3), far more than they spent on transit and all other transportation system elements
combined (see Figure 1).33
TABLE 3: ALLOCATION OF GOVERNMENT SPENDING ON
ROADS IN CANADA, 2010/1134
FEDERAL $2.48 billion
PROVINCIAL/TERRITORIAL $14.69 billion
LOCAL $11.89 billion
TOTAL $28.96 billion
FIGURE 1: GOVERNMENT SPENDING ON
TRANSPORTATION IN CANADA, 2010/11 ($ MILLIONS)
Source: Transport Canada35
There is a widespread view that motorists pay fully for roads through fuel taxes. It is a mistaken view; road spending is not covered by fuel taxes. Even adding revenues from permit, licence and other fees collected by all levels of government, the total revenue from road users amounts to only $15.5 billion per year across Canada. More than $13 billion per year – nearly half – of the annual spending on roads is subsidized by other revenue sources.36
In addition, fuel taxes and road-related user fees and
charges cover none of the social costs of road use: air pollution, greenhouse gas emissions, noise, delay from
traffic congestion, and vehicle collisions. These costs are high – estimated at more than $27 billion per year in one study.37 A more recent study puts the annual cost of
collisions alone at $63 billion.38
The benefits of using automobiles on roads are mainly
private, in other words they are internal to motorists:
convenience and faster access to destinations, depending on the situation.39 The costs are both private (internal) and social (externalized).40
PARKING
As with roads, parking is often provided to users free
of charge, particularly in suburban areas. Indeed, from a shopper’s perspective, free parking is a significant and sometimes determinative factor in choosing a shopping
destination.
C ost of S p r awl 6
As with roads, “free” parking does have real costs. These include the costs of preparing, maintaining and repairing the parking spaces, and the opportunity costs of the land devoted to parking and not used for other purposes.41 The cost of providing a parking space in downtown Toronto is $35,000 and up,42 consistent with costs in other large North American cities.43
Whether free parking is provided by businesses or municipalities, the costs are paid by many. Businesses have to pay for their free parking spaces, and they are only able to pass along a portion of the costs to others. Customers of
businesses who provide free parking pay higher prices for goods and services, while employees pay through reduced wages. Taxpayers pay through higher property taxes to
cover costs of providing municipal free parking.
Residents with onsite parking – whether they are house
owners or apartment renters – pay for driveway and garage/ carport construction and upkeep, and the lost opportunity to use the space for other purposes (the opportunity cost).
When suburban shopping malls, business parks and
industrial parks provide free or subsidized parking, they encourage higher levels of motoring (60% higher for
employer-provided parking).44
The bottom line on “free” parking is that it’s not free. It’s actually a wealth transfer to parking users that is paid by everyone. The scale of the cost of “free” parking is enormous; based on a US study, the cost in Canada would be in the tens of billions of dollars per year.45
CLIMATE CHANGE
The transportation sector is Canada’s largest source of greenhouse gas (GHG) emissions,46 and 69% of transportsector emissions are from road-based motor vehicles. From 1990 to 2010, GHG emissions from transport, caused
primarily by energy used for personal transportation, rose 33%, or 49 megatonnes. Overall, the transport category in 2010 contributed 195 megatonnes of GHG emissions and
accounted for 47% of Canada’s emissions growth from 1990 to 2010.47
The problem is not automobiles per se; it is the excessive use of automobiles. And sprawl increases automobile use.
Statistical analysis suggests that climate change emissions from motor vehicle transport are closely correlated to
sprawl.48 Greater automobile dependency and travel results in greater energy consumption and GHG emissions for lowdensity areas (see Figure 2).
For its residents, sprawl locks in a higher future level of driving. Sprawling areas are generally automobiledependent, and residents end up needing more cars and driving further distances:
• Research for National Resources Canada shows that
vehicle kilometres travelled can be approximately three times higher per household in suburban areas than in
communities close to the city centre.49
• Census data show that automobile dependence increases significantly further from the city centre. In Calgary, “more than half of those living within five kilometres of their workplace walk, bike or take transit. At 10–14 kilometres, that percentage drops to less than a quarter.”50
Climate change is already having significant financial
impacts, most notably through extreme weather events.
Hurricane Sandy in October 2012 was estimated to have
cost the United States more than $60 billion and Canada more than $100 million in insured costs alone.51
While no particular storm, flood or drought can be attributed to climate change (just as no particular case of lung cancer can be attributed to smoking), it is clear that climate change is “loading the dice”, i.e. increasing the likelihood of extreme weather events.52 It is also clear that the number and cost of such events is on the rise (see Figures 3 and 4).
In coming years, it is estimated that climate change will cost Canada into the tens of billions of dollars every year.53 The global costs of climate inaction could be very high, at 20% or more of global GDP, or higher.54 Needless to say,
considering Canada’s economic reliance on trade, that
kind of decline in global GDP would have profound effects on Canada’s economy.55
SMOG
Smog is created by certain air pollutants – sometimes
termed “criteria air contaminants,” or CACs – many of which also cause acid rain. Regulatory emission controls on
automobiles and other emission sources have reduced the ambient concentration of some CACs over recent decades.
However, total emissions remain a serious health problem.
In Ontario alone, smog emissions have been estimated to kill more than 9,500 people per year56 – almost twice as many as die from infectious disease.57
Motor vehicles are an important source of CAC emissions. In Toronto, air pollution from traffic has been estimated to kill more than a quarter of those killed by air pollution overall (440 out of a total of 1,700) and to cost $2.2 billion per year.58 Motor vehicles are more CAC-intensive than transit.59
As noted in the climate change section above, sprawl is associated with greater transportation-related fossil fuel combustion, which results in greater emissions. The higher levels of automobile use necessitated by sprawl boost
morbidity and mortality, along with their financial and economic costs.
7 C ost of S p r awl
0 25 50 75 100 125 150 200 250 300
Transport-related energy consumption – Gigajoules per capita per year Urban density – Inhabitants per hectare
80 60
40 20
0 Urban density and transport-related
energy consumption
Source: Newman et Kenworthy, 1989;
Atlas Environnement du Monde Diplomatique 2007.
Houston
North American cities
Phoenix
Detroit
Denver
Los Angeles
San Francisco
Boston
Washington
Chicago
New York
Toronto
Perth
Brisbane
Melbourne
Sydney
Brussels
Vienna
Tokyo
Moscow
Hong Kong
Amsterdam
Singapore
West Berlin
Munich
Hamburg
Paris
Copenhagen
London
Stockholm
Frankfurt
Zurich
Australian cities European cities Asian cities
FIGURE 2: URBAN DENSITY AND ENERGY USE
Source: Emmanuelle Bournay, UNEP/GRID-Arendal60
C ost of S p r awl 8
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 (bn US$)
400
350
300
250
200
150
100
50 0
©2012 Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE - as at March 2012 Insured losses (in 2011 values)
Trend insured losses
Overall losses (in 2011 values)
Trend overall losses
NatCatSERVICE
Natural catastrophes worldwide 1980–2011
Overall and insured losses with trend
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Number
1,200
1,00
800
600
400
200
0 NatCatSERVICE
Natural catastrophes worldwide 1980–2011
Number of events with trend
©2012 Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE - as at March 2012 Geophysical events
(Earthquake, tsunami,
volcanic eruption)
Meteorolgical events
(Storm)
Hydrological events
(Flood, mass movement)
Climatological events
(Extreme temperature,
drought, forest fire)
FIGURES 3 AND 4: TREND IN WEATHER CATASTROPHES AND COSTS61 9 C ost of S p r awl
PERSONAL HOUSEHOLD COSTS
Although house prices in sprawling areas tend to be lower than in central areas, the cost of transportation tends to be higher: as noted above, residents of sprawling areas are more dependent on car travel and tend to own more cars
and drive further distances.
The personal costs of car ownership are high. In Canada, the average car costs its owner approximately $10,000 per
year,62 which translates to roughly $830 per month.
Reducing the number of cars in a household by one would yield savings enough to enable ownership of a much more valuable home.
Considering another major household cost, retirement, the annual cost of owning an extra car for 35 years could buy more than $570,000 of RRSPs63 – more than the vast majority of Canadians in their 50s have saved for retirement.64
The question of affordable housing takes on an entirely new meaning when considering the automobile dependency
created by suburban sprawl. In a sense, homebuyers are
being sold on the low sticker price for houses, while the high costs of the needed car ownership are brushed aside.
Housing in sprawling areas is only “affordable” because the costs are being transferred to the homeowner’s
transportation bill.
As the housing + transportation indices show, there is more to home affordability than the sticker price. Walkability of the neighbourhood, proximity to shops and services, and availability of high-quality transit are important
determinants of true affordability. A cheap house at the edge of town that requires automobile transportation is not as affordable as it looks.
Some argue that the solution is greater “financial literacy” for homebuyers. If homebuyers would just learn how to do the research and crunch the numbers, the argument goes, they could make better financial decisions, including the decision to locate in a neighbourhood that truly reduces their costs.
The reality is that many people are simply too busy with work, families and other commitments to dig up nontransparent costs and perform the needed financial analysis for home buying, car buying, retirement planning, energy efficiency investments and the many other long-term
financial decisions they face.
In order for real people to make the best decisions, they require relevant information. Housing + transportation
affordability indices are an attempt to start developing that information. Ultimately, relevant information needs to be supplied to homebuyers when they are making decisions
about whether to buy the house. It is very unlikely that all vendors of suburban housing will voluntarily perform the calculations and tell prospective buyers about the additional costs required in order to use their products. If markets don’t provide such information, governments will need to step in.
AN IMPROVED MEASURE OF AFFORDABILITY:
HOUSING + TRANSPORTATION INDEX
Researchers are beginning to cast light on the
combined costs of home ownership and
transportation. For example, the Center for
Neighbourhood Technology has developed the
Housing + Transportation Index, based on 337 US
metropolitan regions. The index demonstrates that
homeowners can save thousands of dollars per year
in transportation costs by locating in compact, rather
than dispersed, communities. Aggregated across an
entire municipality, it can add up to hundreds of
millions or even billions of dollars of savings per year.65 “Families who pursue a ‘drive ’til you qualify’
approach to home ownership in an effort to reduce
expenses often pay more in higher transportation costs
than they save on housing, thereby placing more, not
less, stress on their budgets.”
– A. MOTLUCK 66
Research for Canada Mortgage and Housing
Corporation (CMHC) on a housing + transportation index
showed that in Calgary, being able to eliminate one
car per household would put many more homes
within financial reach of the potential buyer –
depending on income level, up to 18 times as many
homes.67
Even if the housing + transportation costs are eventually displayed prominently on housing product information, it is far from clear that buyers will be able to make the “rational” decision that ideal economic actors would make.
Behavioural economics has provided important insights
about real-world decision-making, including the tendency to heavily discount future costs and benefits.68 Simply put, many people tend to make decisions based on immediate
costs and benefits, and they downplay future costs. Thus, there may need to be policy interventions that extend
beyond the provision of information and that effectively reduce the risk of homebuyers overextending on
transportation costs (just as CMHC now intervenes to
reduce the risk of overextension on home mortgage
payments).
The hidden household transportation costs of sprawl
become even more important in light of potential energy cost increases. Although fuel prices are below their 2007 peak, in 2013 they are still historically high despite a major C ost of S p r awl 10
global recession followed by a prolonged economic slowdown.
Oil prices could well climb in the future: demand in developing countries continues, while the current boost to OECD
unconventional production appears set to last little more than a decade.69 As jurisdictions around the world continue to respond to climate change by expanding carbon pricing
and regulation, the cost of fuel is likely to rise even further.
Higher fuel prices would have a disproportionate financial impact on suburban homeowners. If enough of those
homeowners find themselves unable to afford their
transportation costs, the value of suburban and exurban homes could tumble. This is what happened in the US
housing bubble collapse; house values in areas requiring lengthy commutes fell more rapidly than those in central, compact neighbourhoods.70 And when home values go
down, many owners find themselves holding more debt
than assets.71
HEALTH IMPACTS
The health costs of smog from vehicle emissions, and injury and death from traffic collisions, are discussed above.
However, there are other health impacts of sprawl.
The research is still relatively new, but the literature has already identified linkages between sprawl and a large
number of chronic diseases and risk factors.72 For example, University of Toronto researchers found that populations in less walkable neighbourhoods develop higher levels of
diabetes; among new immigrants, the rate is 50% higher in the least walkable areas compared to the most walkable.73 Another study states that there are “public health
consequences of urban sprawl… [I]ncreasingly sedentary
lifestyles now contribute to greater levels of obesity, diabetes and other associated chronic diseases.”74
Furthermore, there are mental health impacts, ranging from loss of sense of community and social capital, to driver stress and road rage.75
What about the risk of injury from violence? Even in
American cities (where the risk of death due to violent crime is far higher than in Canadian cities), when considering crime and car crashes together, suburbs and particularly exurbs have a higher overall risk of violent death. This is due to the higher incidence of collisions in comparison to
crime.76 A study of the largest 101 metropolitan areas of the US determined that the degree of urban sprawl is directly related to traffic fatalities and pedestrian fatalities.77 In Canada, although death rates from motor vehicle collisions are declining in response to consumer safety requirements, motor vehicle collisions still kill more than 2,000 Canadians a year.78 Although the media and the federal government have made a political priority out of violent crime, the real health priority is automobile collisions, which kill four times as many Canadians as die from homicide.79
ECOSYSTEM SERVICES
The natural areas surrounding municipalities provide a range of ecosystem services that have value to residents, businesses and municipal governments. These services include water filtration, storage and runoff control, fresh air, erosion control, pollination, recreation and aesthetic enjoyment.
These ecosystem services don’t appear on financial statements, but they are real, and economists have quantified them. For example, the total value of ecosystem services provided by Toronto’s greenbelt has been estimated at $2.6 billion annually.80
The City of New York has purchased land and conservation easements in the Catskill/Delaware watershed in order to protect its drinking water supplies, avoiding $6 billion to $10 billion in water filtration plant capital costs and more than $300 million per year in operations.81
Where municipalities do not protect their surrounding
environment, sprawl can literally pave over agricultural and natural spaces, displacing, damaging and even eliminating some of these services.
MUNICIPAL ALTERNATIVES
AND INNOVATIONS
The purpose of this section is to discuss ways of preventing or reducing future sprawl at the suburban growth boundary
and beyond (see Figure 5) and of revitalizing inner areas of municipalities.
Municipalities across Canada recognize the high costs of sprawl and have identified goals for the reduction of future sprawl and the creation of more liveable communities:
• St. John’s (Nfld.) Municipal Plan. Urban form objective is to “encourage compact urban form to reinforce the
older areas of St. John’s, to reduce the cost of municipal services, and to ensure orderly development in new
areas.”82
• Saint John (N.B.) Municipal Plan. “City Structure Goals:
1) Limit urban and rural sprawl and use land more
efficiently. 2) Revitalize existing communities through compact development, context-appropriate infill, and
promoting infill development on vacant and underused
properties. … 6) Develop a compact built form that
supports both a healthy lifestyle and efficient, convenient and viable alternative transportation choices, including transit, walking and cycling.”83
• Ottawa Official Plan. “The policy direction of this Plan is to promote an efficient land-use pattern within the urban area through intensification of locations that are
strategically aligned with the transportation network,
particularly the rapid transit network, and to achieve
higher density development in greenfield locations.”84
11 C ost of S p r awl
• Hamilton Transportation Master Plan. Objective:
“Encourage a more compact urban form, land use
intensification and transit-supportive node and corridor development.”85
• Saskatoon Integrated Growth. The Integrated Growth
Plan endorsed by city council “will mean a change in focus from planning new greenfield developments to balancing
outward growth with strong infill development in
locations and forms that make sense.”86
• Calgary Municipal Development Plan. Urban form
goal is to “direct future growth of the city in a way that fosters a more compact, efficient use of land, creates
complete communities, allows for greater mobility
choices and enhances vitality and character in local
neighbourhoods.”87
• Metro Vancouver. “Goal 1: Create a compact urban
area.”88
A 2005 CMHC study examined six major metropolitan areas across Canada and found a distinct lack of progress in
restraining sprawl.89 The 2011 Census of Canada notes that the majority of population growth is in the suburbs,90 and municipalities still commonly anticipate upwards of 70% of development ending up in greenfield locations.
Fortunately, there are effective solutions. Public policy can shift price signals and transform markets so they help
manage municipal sprawl and create more liveable
communities. They can also help boost the economy and
help balance government finances.
PRICING
There are many public policy instruments that can correct the price relationships that currently encourage sprawl. In addition to reducing the future growth of sprawl, such
policy instruments can revitalize urban cores and existing suburbs, raising property values for existing owners.
This section outlines a variety of policy instruments that directly alter prices – for example, through taxes, user fees and the like. Many other types of instruments also affect prices, albeit indirectly. For instance, urban growth
boundaries (UGBs) – greenbelts that define limits to where development can take place – also affect prices. UGBs are an effective tool for reducing sprawl in a defined area, though sprawl can leapfrog across a UGB if it is too small, and prices are driven up throughout the area. UGBs have been used in many urban areas, such as Vancouver, Portland and now Toronto.
Using prices to influence choices is a “softer” mechanism than regulation; it allows for greater economic efficiency, as well as some degree of flexibility. If, for instance, the cost of commuting by automobile goes up while the cost of
commuting by transit goes down, an individual can still choose to use the automobile if and when desired. If infill development is made more profitable than suburban tract development, individual developers could still choose to build in suburban areas.
However, not all the elements behind a given price can be reformed. For instance, land distant from amenities will tend to remain cheaper than land close to amenities. Also, FIGURE 5: URBAN-SUBURBAN-EXURBAN STRUCTURE
C ost of S p r awl 12
reforming prices won’t solve all problems. For some
problems, there is still a need for regulation. For example, zoning bylaws will always be required in order to provide an appropriate separation distance between truly incompatible uses. And it may be that pricing-reform policy changes are resisted by vested interests, in which case governments will be forced to consider regulation to achieve their goals.
RETROFITTING SUBURBIA
Canada has an enormous stock of existing suburbs. Over
time, if left unattended, infrastructure begins to wear and crumble, children of the original homebuyers
graduate and schools close, making the neighbourhood
less appealing. Families move out, strip malls are
shuttered. If the neighbourhood is not revitalized,
vacancies, vandalism and crime can follow.
At the same time, many cities aim to reduce the extent of future greenfield sprawl. Yet, with Canada’s population continuing to rise in coming decades, new development
is going to have to go somewhere.
Existing suburbs present an tremendous opportunity to
reduce the extent of greenfield sprawl, and to densify
and revitalize cities.
These three forces – the aging of existing suburbs, the reining in of future greenfield development and the
continued growth in population – have sparked an
interest in redeveloping existing suburbs. Many
communities worldwide are in the midst of doing so
under the banner of “retrofitting suburbia” – the
redevelopment of vacant lots, abandoned malls and
big-box stores, inner city surface-parking lots, brownfield sites (abandoned industrial sites), decaying older
suburbs, etc.91
With another 6 million to 14 million Canadians needing
housing in the next 24 years,92 there is a opportunity to achieve the kinds of urban form goals that municipalities have adopted. If prices can be aligned to support the
retrofitting of suburbia, along with some relaxation of zoning and density rules, it could quickly grow to scale.
While prices have the advantage of allowing for “choice,” it is important to bear in mind that choice isn’t everything:
equity, economic mobility and social stability are important, and spending choices are more restricted for those with lower incomes. There is a need to ensure fairness – to
consider equity, economic mobility and social stability when designing pricing policies (see section on Equity and
Fairness).
Public acceptability is, of course, vitally important to the potential success of using pricing instruments to resolve sprawl concerns. Despite received wisdom, residents are generally supportive of municipalities generating revenues and delivering good services. For example, a majority of Calgarians93 would prefer to see taxes increased in order to maintain or improve service levels. Only 7% would like to see services and taxes cut (see Figure 6). These proportions have remained consistent over the years.
ERODING THE TAX BASE
One objection to taxes that seek, as a matter of policy, to reduce social harms (“bads”) is that they could undermine their own base. If, for instance, a carbon tax reduced
fossil fuel consumption significantly, then government
revenue would decline.
Given that the primary policy aim of taxing externalities is to reduce the bad, achieving that goal counts as a
success. Revenues can be restored by boosting the tax
rate. If that rate eventually becomes too high, taxes on other bads can be instituted.
If all of the bads end up being greatly reduced or
eliminated, then the overall program can be considered
a major success. Some public expenses, like health care, will fall if externalities are reduced. But if the revenues need to be replaced, the policy focus can return to
raising revenues by taxing goods, such as income and
consumption.
Interestingly, when asked what type of revenues the City should collect if it needs more, 73% support new or expanded user fees, while only 27% support increased property taxes.
Again this is consistent over the years.
FIGURE 6: CALGARIANS’ SUPPORT FOR MUNICIPAL TAXES (2012) Source: Ipsos Reid94
13 C ost of S p r awl
Citizen satisfaction surveys like Calgary’s are conducted in cities across Canada, and national norms are consistent with the findings in Calgary: the majority of residents prefer to see taxes increased to maintain or expand services, while a small minority would prefer cuts to taxes and services.
TABLE 4: NATIONAL NORMS – CITIZEN SATISFACTION
SURVEYS95
PREFERENCE %
Increase taxes to enhance of expand
services 22
Increase taxes to maintain services at
current level 32
Cut services to maintain current tax level 22
Cut services to reduce taxes 11
The types of policy instruments discussed below are
available to municipalities to varying degrees. The legal capacity of municipalities to implement some of these policy instruments is determined by each province. This is discussed later, in the Municipal Authority section.
DEVELOPMENT CHARGES
As noted earlier, new developments bring costs to municipal government, and some of these costs are recovered from
developers through development charges (also termed
development cost charges, development levies, off-site
levies).96
The costs of development vary considerably. For
developments that are close to existing infrastructure (e.g., infill), the costs tend to be relatively low. Those that are far from existing infrastructure tend to have higher costs. Some types of infrastructure have costs that vary by length (e.g., roads and pipes), which results in costs being higher for lowdensity development.
Despite these variations in costs, many municipalities have charged a flat development charge rate per unit or per unit area (square footage). This results in location, density and other cost drivers being ignored in the calculation of
development charge rates. Thus, compact, location-efficient developments end up subsidizing far-flung sprawling
developments, thereby providing another financial incentive for economically inefficient development.97
Development charges can better reflect direct and indirect infrastructure and other costs engendered by development.
Development charges can be adjusted so they are relatively low on developments near municipal cores and relatively high on developments in greenfield areas on urban fringes. This can be done cost-effectively by calculating development charge rates based on the area in which the development is taking place (area-specific rating), which is easier than calculating the exact costs on a per-unit basis (marginal cost rating).
As an example, the City of Kitchener has set lower development charges for central neighbourhoods as compared to suburban areas. Comparing fully serviced lots, suburban charges are 74% higher than those for central neighbourhoods across all building types (see Figure 7).98 Even semi-serviced suburban lots (no sewage or water service) require a 40% higher development charge than fully serviced lots in central neighbourhoods. For non-residential buildings, the
difference is even starker. Fully serviced suburban lot charges are 157% higher, and semi-serviced suburban lots 84%
higher, than fully serviced central lots.
FIGURE 7: KITCHENER RESIDENTIAL DEVELOPMENT
CHARGE RATES (FULLY SERVICED LOTS)
$3,140
$5,475
$3,827
$6,673
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Single detached or
semi-detached
dwelling
Townhouse
or street
townhouse
dwelling
Multiple or
duplex dwelling
Lodging house
Central Neighbourhoods
Suburban Area
$5,542
$9,662
$1,661
$2,898
Data: City of Kitchener99
Ottawa has similar rate differentials for development outside its greenbelt.100 The City of Hamilton has taken a slightly different approach with a similar pricing result, providing a 90% exemption from development charges payable for
developments in the downtown area.101
In addition to adjusting charges based on location, municipalities can provide incentives for particular types of development, such as redevelopment of brownfield (old
industrial) sites, development in areas well served by transit, or infill of older inner-ring suburbs (see earlier discussion of retrofitting suburbia). The City of Hamilton, for example, has established exemptions and credits of up to 100%
of the costs of development charges or environmental
remediation required to redevelop a brownfield site.
Revisiting the development charge structure across the
board gives municipalities an opportunity to reduce,
Mu nicipa l P o licy S o lu tions 14
eliminate and even reverse some of the subsidies that many are currently providing to suburban sprawl. Municipalities are moving on this opportunity. For example, Calgary
recently reached an agreement with developers to double the development charges on new suburbs;102 Mayor Naheed Nenshi would like to see them doubled again.103 Peel Region also recently decided to double its development charges after being faced with the data indicating that development was not paying for itself.104 Ottawa is currently phasing in increased development charges.105 Below, in the section on Municipal Authority, some of the legislative limits on
development charge reform will be discussed.
UTILITY PRICING REFORM
Many local utilities are based on networks of infrastructure, e.g., water delivery, wastewater (sewage) collection and electricity delivery. The larger the network infrastructure requirements per dwelling, the higher the capital investment cost. This means that sprawling, low-density developments are less cost-efficient than higher-density developments.
Likewise, developments in new greenfield areas that don’t already have infrastructure in place will have higher costs than redevelopment of central and established areas that have good infrastructure.
Not only do the capital costs of providing municipal servicing to sprawling areas tend to be higher, but so do operation and maintenance costs. For example, solid waste collection that requires more driving time and fuel use will be more costly. Moving water and wastewater greater distances
boosts pumping costs; a study of data from 10 municipal wastewater systems in the Great Lakes area of the United States found that operation and maintenance costs in lowdensity areas is higher – sometimes more than twice as high – as it is in higher-density areas. The same is true for distance to utility plants.106 As Enid Slack puts it:
“Given the evidence that the cost of services
increases directly with distance and inversely with
the density of development, the most costly areas
to service logically tend to be the outlying, lowdensity developments.”107 These findings suggest that in municipalities where services are charged at the same rate regardless of density or location, the higher-density and central areas are subsidizing the lowdensity and sprawling areas. The policy implications of this wealth transfer are clear: the financial subsidy should be eliminated. Municipalities can charge for utilities based on costs related to frontage (property width, measured at the front of the lot) and, in fact, many do so.
For example, the City of Terrace charges $0.65/foot for water main,108 while Winnipeg charges $0.95/foot for water main and $2.95/foot for sewer main.109 Such charges help create a financial incentive for denser development.
PROPERTY TAX REFORM
Municipalities levy property taxes through a basic formula:
the assessed value of the property multiplied by the tax rate (sometimes called the mill rate) produces the annual tax payable. There are some variations on the basic formula, as will be seen below. Tax rates are calculated once the total assessed values and annual municipal revenue needs are
determined.
LAND VALUE TAXATION
Property value is composed of two elements: the value of land and the value of buildings or other “improvements” on the land. Taxing the improvements on land, which is part of market value assessment, provides a disincentive to improve that land.
Land value taxation means levying the tax on the land value only, not the improvement value. A variant – having property tax based on both values, but more heavily weighted on the land component of the value – is termed “split-rate taxation.” Land value taxation or split-rate taxation would boost the financial incentive to improve underutilized land.110
Many downtown cores in Canada have derelict buildings,
empty lots and relatively low-value surface-parking lots.
Shifting to a system of land value taxation or split-rate taxation would provide greater incentive to redevelop such sites and put them to a higher-value use. Doing so would boost the density of the urban core, thereby reducing the demand for suburban land.
Cities in Pennsylvania have experimented with land value taxation. In 1979–80, the City of Pittsburgh shifted to a splitrate taxation that boosted the tax on the land component to more than five times the rate on structures. It experienced a “dramatic increase in building activity, far in excess of other cities in the region,” particularly in the commercial sector.
While demand for commercial space was an important
factor in this growth, the evidence suggests that the shift toward land taxation was important in enabling the city to avoid rate increases in other taxes that could have impeded development.111
“[One] way to promote compact metropolitan
development would be to … adopt split-rate
property taxation. Under this type of property tax
reform, a city can lower the tax rate on buildings
and other capital improvements and still maintain
the level of municipal services by raising the tax
rate on land values. The Commonwealth of
Pennsylvania has had this form of property
taxation since 1913. Pittsburgh and Scranton have
been the pioneers in tax reform, but by 1995, some
15 cities in the Keystone State had adopted tworate property taxation.” – R. ENGLAND112
15 Mu nicipa l P o licy S o lu tions
One complication is that if tax rates on all unimproved lands rise, farmers would end up paying more, boosting their
incentive to sell to property developers. However, this effect could be mitigated or eliminated by reducing the tax rate for land that is actively farmed.
PROPERTY CLASS TAX REFORM
Some municipalities vary tax rates across property classes. In Edmonton, for example, the tax rate on higher-density
apartment buildings is greater than the rate on single-family dwellings.113 This creates an incentive to build at a lower density, which contradicts Edmonton’s stated goals of
increased density.114 Toronto’s property class rates are similarly skewed against existing multi-residential
buildings,115 but other cities’ are not (e.g., Hamilton,116 and Winnipeg117). Some Montreal boroughs have higher rates for multi-unit dwellings, while others have lower rates.118 Whatever the rationale for varying rates on different types of property,119 those rates will affect the incentives in relation to density of development. In order to serve municipal goals of higher density, property class tax rates can be structured to favour multi-residential, townhouse and other relatively dense classes.
In addition, higher property tax rates for parking lot and vacant land classes would encourage more productive
development.120 This would have a similar effect to land value or split-rate taxation, without the side effect of making farming more expensive.
SPATIAL-BASED REFORM
Some municipalities set standard tax rates across the entire municipality. Others vary their tax rates by location, e.g., Hamilton121 and Winnipeg.122 Hamilton currently has higher tax rates for properties that are in the central part of the city and well served by transit.123 These rates constitute a financial incentive for development in outlying communities and
away from transit. This undermines Hamilton’s Transportation Master Plan objective of encouraging “a more compact
urban form, land use intensification and transit-supportive node and corridor development.”124
Removing area rating in such cases would help to revitalize central neighbourhoods and achieve municipal goals related to increased density and transit use. A further step in the same direction would be for municipalities to have lower rates in central areas and near transit. Provincial legislation governs what is possible for area rating; Ontario’s Municipal Act, for example, would require amendment to expand the range of factors that could be used to set area rates.
As noted earlier (see Utility Pricing Reform section), some municipalities also have a frontage levy – an annual charge based on property width, which is added to the property tax bill. Such a charge not only addresses the cost of providing utilities to properties, but also functions as an encouragement to denser development.
TARGETED TAX REDUCTIONS
Municipalities can provide special tax reductions aimed at reducing future sprawling development.
For instance, municipalities can provide tax reductions for development of brownfield sites, which will reduce the
demand for greenfield building sites. The City of Windsor’s Brownfields Property Tax Assistance Program cancels any increase on property taxes for a brownfield property
undergoing remediation and development.125 The City also provides grants for brownfield rehabilitation.
Reducing tax rates for farms can make farming more viable in the face of challenges from global competition, farm subsidies and subsidized food transportation. Ontario, for instance, has adopted a reduced tax rate for farm properties:
25% of the normal property tax rate. This provides an
incentive for farmers to stay in the business of farming, rather than selling their farms to developers.126 Likewise, a municipality can adopt special tax rates for other green spaces protected from development by a conservation
covenant.127
TRANSPORTATION PRICING REFORM
The subsidies to motor vehicle transportation, discussed above, provide an added incentive to live and conduct
business in sprawling areas. Eliminating those subsidies, and applying the savings to sustainable transportation modes, will help to rein in sprawl.128 There are many policy
instruments that can be used to alter the suite of transportation prices facing individuals and firms.129
TRANSIT, CAR SHARING, AND ACTIVE TRANSPORTATION
SUBSIDIES
Subsidizing transit, car sharing130 and active transportation (walking and cycling) infrastructure will reduce the
environmental costs of transportation and make living in urban neighbourhoods more attractive.
A significant impact of providing transit is its ability to help reshape a municipality. Surface transit (bus and streetcar/ light rail) helps build ribbons of greater density along its routes. Subways and sky trains build nodes of greater density along their routes. Central networks of transit help build density throughout a municipal core. These various forms of added density help to reduce the growth of sprawling
development on the urban fringes.
Of course, it matters where transit is built. Transit in urban cores and established areas can attract residents and
businesses, reducing sprawl. Building transit systems that extend into sprawling areas can provide an added incentive to sprawl.
The costs of transit are often cited as a rationale for not proceeding with transit system expansion. However, as
shown earlier, Canadian governments spend far more on
Mu nicipa l P o licy S o lu tions 16
roads every year than they spend on transit – nearly four times as much – and Canada is the only G8 country without a national, long-term transit funding strategy.131
FIGURE 8: NODES OF DENSITY AT SUBWAY STOPS, YONGE STREET, TORONTO Image: phototouring132
The initial investment costs of transit system improvements can be offset by capturing the increase in nearby real
estate values created by the improvements. Municipal
governments capture some of the value increases through higher tax revenues from increased density. They can also purchase property near future transit locations and then rent or sell it when the value has risen. And, of course, all levels of government will benefit financially from reduced automobile use and its attendant costs.
PARKING PRICING
Parking is often provided at a subsidy, even free of charge, although there are real costs that are borne by society.
Parking prices can be reformed to pay for the overall costs of parking and to help achieve municipal goals like slowing sprawl and revitalizing urban cores. Currently, parking downtown in many municipalities costs money, while
parking is provided free of charge in suburban malls, big box stores and business parks. Free suburban parking provides a gravitational pull for shoppers, employers and others – undercutting downtown businesses and helping to hollow
out central areas. Municipalities (and provinces) could eliminate and even reverse this pull by charging for parking in suburban areas. Doing so would not only encourage
greater use of sustainable transportation modes and help downtown areas, it would also reduce demand for parking, freeing up land for other purposes.
The technology to price parking in suburban lots already exists and is in use. Metered parking lots with self-serve kiosks are quite common and can be expanded across
municipal regions. Mobile phone technology can make it
even more convenient to make payments.
Parking taxes (also termed parking levies) can be tailored in a number of different ways, one of which is to apply them only to parking lots that are currently unpriced.133 This would provide an incentive to charge for parking in such lots, and to provide less “free” parking space.134 Parking taxes could be adjusted to provide for reduced rates for efficient forms typically found in urban cores, such as underground parking or parkades above commercial uses.135
Provincial governments can implement a range of such
parking tax systems or can give municipalities powers to do so.136 Parking fines could be increased in order to encourage better compliance with parking rules and free up more
parking spaces.
FUEL TAXES
Fuel taxes boost the costs of commuting and provide a
disincentive to locating far from urban cores. A US Federal Reserve Board study across several large municipal areas between 1981 and 2008 found that a 10% increase in gas
prices resulted in a long-term 10% decline in new house construction in areas with long commuting distances.137 A study of Canada’s 12 largest metropolitan areas concluded that higher gasoline prices contributed significantly to reducing sprawl: a 1% increase in price caused an average
0.32% increase in the population living in the inner city and a 1.28% decrease in low-density housing units. Gasoline prices were found to be a larger influence on sprawl than household income or the population of a major census
area.138
As noted earlier, existing fuel taxes (even when added to the full basket of road user fees) fail to cover the financial costs of roads, let alone the social cost. In addition, fuel taxes in North America are at the bottom of the pack in the developed world. By both measures, there is room to increase fuel taxes as many other countries have done (see Figure 10).
Municipalities in Canada do not generally have authority to levy fuel taxes independently. Both the provincial and
federal levels of government have established fuel taxes, and there is some revenue sharing with municipalities. The tax rates could be raised and more revenue shared with
municipalities. Alternatively, providing municipalities the authority to establish fuel taxes would give them another tool with which to reduce the subsidies to sprawl. Metro Vancouver has the authority to set a local portion of the fuel tax and collect the proceeds, and the money is provided to the regional transit and transportation authority.139 Such authority also helps to balance the books, as well as helping municipalities diversify away from their dependence on the property tax. Every penny of fuel tax in Toronto, for instance, would be worth a 1-3% change in property tax.140
17 Mu nicipa l P o licy S o lu tions
If structured as an ad valorem tax, rather than a per-litre tax, a municipal fuel tax would grow when fuel prices rose, just as income tax revenues do when incomes rise.
“Not only could the application of a municipal fuel
tax raise the price paid by road users to a level that
is more in line with the cost (production costs plus
environmental costs) of providing roads, it would
permit cities to have funds for improving and reconstructing their local roads and provide them with funds for public transit if they so desire. It would
also lead to a more efficient use of local roads.”
– H. KITCHEN 141
ECONOMIC BENEFITS OF MANAGING SPRAWL
As noted earlier, addressing the negative externalities associated with sprawl reduces economic distortions and boosts economic efficiency and overall welfare. In addition, filling in the spatial gaps in cities and raising urban density can bring about what economists term “economies of agglomeration.” Higher urban density results in spreading the fixed costs of infrastructure over more businesses and households, reducing costs on a per-unit basis. It also improves the access of firms to workers and vice versa. Firms have more potential workers to choose from, resulting in better employment fit and higher labour productivity.142 Job seekers also have more employers to choose from, reducing unemployment. The greater density of firms and employees results in knowledge spillovers, both within sectors and between sectors. Urban density also improves the access of firms to suppliers and markets.
Proximity of firms in related or complementary industries allows for productivity gains through specialization and outsourcing.
Such economies of agglomeration boost economic growth, and it appears that, as the economy tends toward being information-based, that association will grow stronger.143 In the Greater Toronto Area, for instance, population growth has accelerated downtown, in 2006-2011 exceeding growth in the surrounding regions of Peel, York-Durham and Halton for the first time since the early 1970s. The downtown population is both younger and better educated, and they report that being close to work and public transit are their top two reasons for living downtown. Employers are moving to downtown to attract this workforce and access the market.144 In addition to the benefits of density generally, some of the individual policy tools involved in managing sprawl also bring particular benefits. Governments have invested billions of dollars in job creation, and it is important to get the most bang for the buck. It turns out that public transit is a strong job creator. Transit creates more than 20 person-years of employment per million dollars invested – an employment return on investment more than five times higher than that of the oil and gas extraction sector, for example.145 Construction and maintenance of transit also have very positive employment multipliers (see Figure 9).
Moreover, the employment and economic benefits of transit tend to stay local. Operating transit systems is a labourintensive activity, as is construction. The money spent on wages ends up being recirculated in the local economy. Figure 9 demonstrates the contrast between the high levels of direct and indirect employment created by labour-intensive transit and ground transportation and the low levels created by oil and gas extraction, which is capital intensive. For the oil and gas sector, few jobs are created because much of the money spent ends up leaving the local economy to bring in imported equipment.
FIGURE 9: CANADIAN EMPLOYMENT MULTIPLIERS – SELECTED SECTORS (DIRECT AND INDIRECT EMPLOYMENT) 0 5 10 15 20 25
Person-years employment per $ million invested
Direct
Indirect
Construction
Repair and Maintenance
Professional, Scienti c and Technical Services
Transit and Ground Passenger Transportation
Other Municipal Government Services
Oil and Gas Extraction
Support Activities for Mining, Oil & Gas Extraction
Petroleum and Coal Products Manufacturing
14246
Source: After Thompson and Joseph, data from Statistics Canada143 Mu nicipa l P o licy S o lu tions 18
FIGURE 10: DEVELOPED COUNTRY UNLEADED FUEL TAXES
Source: OECD147
19 Mu nicipa l P o licy S o lu tions
ROAD USE PRICING
Another option for reforming transportation pricing is to charge directly for road use.148 Tolling technology has come a long way since the days of toll booths that stop traffic.
Billing on the 407 toll highway in Ontario, for instance, is fully automated.
“There is … real potential for municipalities to
introduce user fees in the area of non-public
transportation, especially given the emergence of
new, efficient technologies to collect tolls.”
– TD BANK149
There are several ways to implement road pricing.150 Many methods can be tailored to help rein in the impacts of sprawl.
Road Tolls. Tolls can be charged for the use of a particular section of road, which can be long or short. Tolling a network of urban ring and radial roads can provide a disincentive to long commutes.
Cordon (Area) Tolls. Cordon tolls are fees paid by motorists to drive into a particular area, usually a city centre. The London (UK) cordon toll has reduced congestion and sped up traffic dramatically compared to baseline levels, as well as providing funds for transit expansion. Complementary
measures are needed to reduce the risk of driving people and businesses toward suburbs, e.g., exemptions for central area residents, ring-road tolls.
Congestion Pricing (Value Pricing). Congestion Pricing
means varying toll charges over time and across locations to reduce traffic congestion and peak-period commuter traffic volumes. Variation can be on a fixed schedule or dynamic to reflect real-time congestion.
HOT Lanes. High Occupancy Toll (HOT) lanes are essentially Carpool/High Occupancy Vehicle (HOV) lanes that also allow low occupancy vehicles paying tolls. Provided that the tollpaying, low occupancy vehicles don’t displace or slow the high-occupancy vehicles,151 HOT lanes assist in reducing congestion and emissions. HOT lanes, like other road pricing systems, can provide revenues to support transit, downtown renewal, brownfield remediation and so on.152
DISTANCE-BASED PRICING
Motorists currently pay a number of annual and one-time flat-rate fees and charges, which could be restructured to reflect the amount they drive.153 Such a restructuring would reward decisions to locate in central areas of town rather than distant areas requiring long commutes.
Vehicle registration and licensing fees, for instance, could be based on kilometres travelled per year. Currently, authority to collect such fees rests with provincial governments but this could be changed, and some major cities have already been given the authority to do so (e.g., Toronto, Vancouver and many large cities in Quebec).154 Similarly, insurance premiums can be pro-rated to distance travelled – termed pay-as-you-drive (PAYD) insurance pricing.155
INFORMATION
While not directly affecting prices, providing information to market participants can bolster the impact of prices. For example, municipal governments could publish community
walkability scores156 and housing + transportation index scores (see Personal Household Costs section). If provincial governments or industry associations required real estate agents and mortgage lenders to provide such scores, it could assist homebuyers in making well-informed decisions.157
EQUITY AND FAIRNESS
Pricing instruments to manage future sprawl, if poorly
designed, could unfairly affect lower income Canadians. This is an important concern, and not just for those with lower incomes and the fair-minded majority of Canadians; if this concern is not addressed, the proposed policy changes likely won’t attract a wide enough constituency to be adopted.
User pay systems have a well-deserved reputation for being regressive in their impact. Since the 1980s and 1990s, many local and higher level governments have gone through
periods of imposing what have been called “user fees.” Often these weren’t really user fees at all, but rather flat charges levied on a per-person, per-household or similar basis. Nor were they applied to reducing negative externalities; indeed, they were often levied against goods with positive
externalities, such as health care (see Externalities discussion, above). Such charges were more akin to poll taxes (annual per-person head taxes) and, understandably, about as
unpopular.
Applying a flat tax or charge unrelated to consumption
carries little or no justification other than raising revenue.
Intelligent design of pricing instruments can make them target the “bad” more accurately, and protect lower income people. For instance, raising property tax rates on single-family dwellings while reducing rates on multi-family rental
dwellings (as some Montreal boroughs have done) will tend to be more progressive than flat rates, or rates that are higher on multi-family dwellings. Likewise, frontage rates for utilities will cost more for bigger properties, which – other things being equal – tend to be owned by people with more money.
Note the reference to “other things being equal.” Sometimes other things are not equal, and a particular instrument’s revenue-raising side might have an unintended regressive consequence. For instance, a lower income person in a
bungalow in an older part of town may have a 50-foot lot, while an expensive house sits on a newer 40-foot lot. The lower income person ends up paying a higher frontage rate than the owner of the expensive house.
Mu nicipa l P o licy S o lu tions 20
The other side of the instrument, however, is revenue
spending – and the revenue can be used in a way that makes the overall instrument neutral or even progressive (e.g., spending the revenue on income supports, transit subsidies or affordable housing).
Finally, an individual pricing instrument – even if it has a regressive impact in a particular case – can be part of a larger program of policy changes that overall is progressive. What matters is not whether an individual element of a particular reform package is regressive, but whether the package
overall is more regressive than the alternative. Bearing in mind that property taxes have a regressive impact,158 it is necessary to ensure that any revenue streams that replace it are at least less regressive, and ideally progressive.
A few simple principles could usefully inform a fair pricing guideline:
• Apply fees, charges and taxes to negative externalities, and subsidies to positive externalities.
• Design pricing instruments to provide “lifeline” or
progressive rates, i.e., low or zero price rates for modest use of goods and services, and higher rates for larger
quantities.
• Design pricing instruments to phase in transition to new prices, which will allow people to plan ahead in order to reduce disruption.
• Design pricing instruments to “grandfather” some prices for existing uses, or exempt qualified ratepayers (e.g., where a user fee or a shift in property tax structures could hurt retirees on fixed incomes).
• Where a pricing instrument cannot be designed to have a progressive impact, employ the revenues from it, or
develop a companion instrument or program of
instruments, to provide compensation for lower income
people (e.g., use road tolls to subsidize transit, or provide income assistance).
• Employ a review lens of fairness and political acceptability in all stages of pricing implementation: issue identification, instrument selection, instrument design and
communication.
Finally, in addition to considering the impact of individual policy instruments, it is important to bear in mind the overall distributional impacts of sprawl pricing. By reducing further sprawl, pricing helps to reduce vehicle use and smog
emissions that harm lower income people
disproportionately.159 By making housing in central areas with good transit less expensive, it provides living
arrangements that are truly more affordable (rather than distant houses with low sticker prices and expensive
automobile dependence).
DIVERSE INCENTIVES
As shown, there are many tools available to municipalities to help reduce future sprawl and create more liveable
communities. Employing a diverse range of tools is useful, for many reasons.
First, adopting a range of policies sends a clear signal about the overall policy direction of the (municipal or other) government. For example, the City of Kitchener, Ontario has signalled that it wishes to “facilitate the reurbanization of developed areas of the city, including the downtown and central neighbourhoods, by stimulating private sector
investment in the reuse of vacant and underutilized lands,” and to that end, it is offering a “comprehensive package of financial incentives.”160 A clear signal about the government’s intentions can influence private planning and investment decisions – above and beyond the influence of the pricing instruments adopted.
Second, the tools have different types of impact. For instance, distance-based pricing of road use provides an incentive to reduce distances driven but not to avoid driving during rush hour (dynamic congestion charging can do this). Likewise, property tax adjustments can be used to alter the ongoing cost of home ownership but have no direct effect on the very important up-front sticker price (development charge adjustments work better here). All of the tools have useful effects, but none is a silver bullet. Using a variety of instruments will help create a range of helpful incentives.
Third, it is unlikely that the implementation of any single instrument would result in a significant change in the pattern of suburban development. The price differentials between central and suburban housing are simply too large (in the hundreds of thousands of dollars in many cities) in
comparison to the impact that a single pricing instrument would have. For example, the central-suburban price
differential is often an order of magnitude larger than development charges, so tackling development charges
alone would likely have an inadequate impact. In order to generate adequate incentives to manage sprawl,
municipalities are going to have to use several instruments.
Fourth, the degree of impact of price changes on behaviour (“price elasticity,” in economics jargon) can vary over time.
For some price changes, the behavioural impact could
be high at first, but wane over time as people become
accustomed to paying the new price. For others, the impact could increase over time, as people make investments that help them change behaviour to take advantage of the new price. Price elasticities can be estimated for the short term and the long term, and their variance over time may create a need for complementary pricing instruments.
Fifth, using a range of pricing tools at a relatively low rate creates less economic distortion than using just one or two 21 Mu nicipa l P o licy S o lu tions
at a much higher rate. Generally, a broader tax base leads to greater economic efficiency than a single large tax.161 Sixth, politically, some of these tools can be considered lowhanging fruit, worthy of implementation in the short term.
Other tools may be more effective, but require more time, effort and collaboration to overcome political challenges.
Moreover, shifting politics can result in the adoption of some tools being more acceptable at different times.
Moving forward on a range of proposals is less risky than depending solely on one.
Finally, adopting a package of pricing tools will enable any potential disadvantages of one to be offset by others. For instance, if one instrument had a regressive impact in a particular case, it could be offset by progressive impacts of others.
Municipal governments use their own criteria to evaluate what mix of policy instruments to employ. These will
typically include the effectiveness of the instrument at helping to achieve the goal, other impacts (side effects), political challenges to adoption or implementation,
economic efficiency (sometimes via cost-benefit analysis), administrative efficiency and cost-effectiveness, fairness, and any externally imposed obligations.162
FEDERAL AND PROVINCIAL ROLES
Other orders of government influence what municipal
governments can achieve in restraining future sprawl. This influence occurs in two manners: limits on the legal
authority of municipal governments, and alignment of
provincial and federal policies.
MUNICIPAL AUTHORITY
Municipal governments have a number of policy
instruments at their disposal for addressing sprawl.163 However, these instruments are limited in scope by
provincial legislation. Being creatures of provincial statutes, municipal governments have no independent constitutional authority to pass legislation.
Most municipal government powers are found in statutes
of general application, such as Ontario’s Municipal Act, 2001,164 Alberta’s Municipal Government Act,165 and B.C.’s Local Government Act.166 Some local governments receive a broader range of powers through special statutes (often called “charters”), such as the Vancouver Charter,167 the City of Toronto Act168 or the City of Winnipeg Charter. 169
Hundreds of additional statutes and regulations provide further powers to local governments. These statutes – in scores to hundreds of sections – each provide, shape and limit local government powers over property taxation, fees and levies, and other matters.170
The constraints on municipal revenue-raising powers
restrict municipalities’ ability to balance their books, let alone achieve important policy goals like reducing the
future growth of sprawl. For example, provincial
governments restrict the authority to collect development charges.171 Ontario limits the municipal costs of development that can be recovered by development charges, as follows:172 • Only capital costs of growth can be included. Operating and infrastructure rehabilitation costs cannot be
included, even if they are imposed by the new
development.
• Several types of capital costs are excluded, even if the new development creates a need for them:
- cultural or entertainment facilities, including museums, theatres and art galleries;
- tourism facilities, including convention centres;
- the acquisition of land for parks;
- hospitals;
- capital costs related to waste management services; and - office space for administration of municipalities and local boards.
• There is a mandatory 10% reduction in recovering the capital costs that are subject to development charges.
One historical rationale for maintaining a tight leash
on municipal revenue-raising powers is that municipal
governments could, due to lack of capacity, make errors that are costly to citizens, businesses, themselves or the provincial government. However, this has not deterred
provincial governments from downloading greater responsibilities to municipalities, some of them unfunded. Moreover, many cities are now larger than, and as competent as, many provincial governments.
The types of powers now enjoyed by charter cities such as Vancouver, Winnipeg and Toronto could be extended to all large cities. Beyond this, it would be reasonable for provincial governments to explore options for empowering smaller
cities to raise revenue commensurate to the challenges
they face and the responsibilities they have been given. In addition to development charge reforms, provinces could consider a range of reforms, including enhancing municipal capacity to employ property taxation, parking pricing and fuel taxation. If there are real or perceived municipal governance risks remaining, other methods can be employed to manage them, such as avenues to appeal decisions and
supermajority voting requirements on some issues.
Mu nicipa l P o licy S o lu tions 22
POLICY ALIGNMENT
It is important that federal and provincial policies not undermine municipal goals and policies relating to
managing sprawl. Key reforms that could be undertaken at higher levels of government in order to support municipal management of sprawl include carbon pricing, highway
tolls and improved regional governance.
Carbon Pricing. The case for carbon pricing173 is clear.
Scientists have determined that we need to reduce climate change emissions quickly and deeply, and economists note that carbon pricing is the most economically efficient way of doing so. Canadian business leaders and firms are onside, including those in the energy and automotive sector.174 In addition to the national and international reasons
normally discussed for pricing carbon, there are good
reasons tied to municipal sprawl objectives. Underpriced or unpriced climate change emissions constitute a subsidy to motor vehicle use, and thus to sprawl. If federal and
provincial governments wish to support municipal
governments in achieving their goals related to sprawl and liveable communities, they need to put a meaningful price on carbon.
Highway Tolls. In addition to municipal road pricing,
discussed above, many highways managed by other orders
of government could be priced, particularly those used as commuter routes in sprawling suburban areas.
Highway 407, a toll highway in southern Ontario, provides an example. Apart from problems with the private contractor running the 407, the tolling system has been widely regarded as a success, with an expansion coming shortly. New
highways being built can be tolled from the outset, as with the 407. Existing highways can have tolls phased in, with prices rising gradually to enable users to adjust more easily.
Improved regional governance. A challenge for
municipalities seeking to reduce the future growth of sprawl is that they may see themselves as being in “competition” for new development with neighbouring municipalities and
counties. As noted earlier, what they may be competing for is actually debt rather than net revenues.
However, some may feel the need to facilitate sprawling development because other jurisdictions are doing so, and may thus be weakening their own development standards
and revenues in order to poach development from other
jurisdictions. This type of policy competition has been termed the “race to the bottom.” It not only results in lesssustainable development patterns and foregone revenues, it may not even be effective. Evidence suggests that
“businesses are relatively immobile in response to changes in local tax differentials, even over a period of several years.”175 Weak or absent regional governance facilitates this
competition, which results in fragmentation and low-density sprawling development. Effective regional governance
enables municipalities to co-operate, rather than compete, and to maintain the development standards and revenues
necessary to meet their community goals. Some cities and surrounding areas in a number of provinces have been
combined into regional municipalities, also termed “upper tier” municipalities.
INFRASTRUCTURE: SHIFTING TO A
DEMAND MANAGEMENT APPROACH
Certain types of public infrastructure have been managed over the last several decades purely by supplying more
and more infrastructure. The problem with this approach, apart from sheer cost, is that when a good is provided for free, the demand for that good becomes excessive.
Providing more of it in response further exacerbates the demand: as the saying goes, “build it and they will come.” This has been the case particularly for roads, and supplying more road space (most often at zero cost to users), generally has failed to resolve the problem of congestion over the long term.
Managing demand is a more economically efficient
approach than simply always providing more supply. All
levels of government could benefit from adopting a more comprehensive approach to infrastructure: managing not
only the supply side, but also the demand side of the
equation.
When it comes to demand management techniques,
pricing is cost-effective. In contrast, demand management programs that rely on educating users about cost savings and other benefits require ongoing effort and resources.
And, of course, they don’t generate revenues.
Pricing allows users to make their own decisions and can quickly bring demand into alignment with supply, reducing overuse and associated maintenance and repair costs. In the case of roads, pricing also reduces smog and climate change emissions, and future expansion of sprawl.
23 Mu nicipa l P o licy S o lu tions
CONCLUSIONS
Municipalities across Canada are adopting goals of greater density and transit use and reduced sprawl. This is not surprising, as sprawl imposes substantial costs on municipal governments, not to mention businesses and families.
How can such municipal goals be achieved? This report has outlined some of the policy instruments that can directly tackle the cause of sprawl: distorted price signals. A number of policy instruments can be adopted or adjusted to provide the necessary price incentives, and do so in an equitable and fair manner. By eliminating the financial subsidies to sprawling development, and further internalizing the externalities, governments can encourage downtown revitalization, brownfield redevelopment and vibrant economies that attract workers and employers.
Municipal governments can lead the way in managing sprawl. Many policy changes are within their existing capacity.
Provincial governments can amend legislation to provide additional capacity, and provincial and federal governments can align their policies to support municipal efforts.
It appears that the time is right to be discussing solutions. Municipal governments are studying the financial costs of sprawling development and the long-term liabilities it imposes. Major cities are exploring revenue-raising mechanisms to finance much-needed transit improvements, while citizens are open to the idea of taxes and user fees to support municipal services. There is now a clear opportunity to adopt the policies that will create towns and cities that work better for individuals, businesses and governments.
Mu nicipa l P o licy S o lu tions 24
ENDNOTES
1 David Thompson is Policy Director of Sustainable Communities for Sustainable Prosperity. His publications with Sustainable Prosperity include “Putting Transportation on Track in the GTHA:
A Survey of Road and Rail Emissions Comparisons”; “Smart Budget: A Background Paper on Environmental Pricing Reform for Local Governments”; “The Smart Budget Toolkit”; and “Building Canada’s Green Economy: The Municipal Role.” He has prepared reports and delivered presentations on the green economy, green jobs and environmental pricing reform for a number of organizations, including the City of Edmonton, the City of Hamilton, the Federation of Canadian Municipalities and the Toronto City Summit Alliance. He has worked as a lawyer in government and in the civil society sector, in management, and as a small business owner. He has postgraduate degrees in law and environmental economics.
2 Human Resources and Skills Development Canada. “Canadians in Context – Geographic Distribution,” www4.hrsdc.
gc.ca/[email protected]?iid=34.
3 There are different ways to categorize population areas, e.g., by municipality, by census municipal area, or by population centre (urban area), but these differences only affect the numbers by about 15%. See generally Statistics Canada, “The city/suburb contrast: How can we measure it?,” www.statcan.gc.ca/pub/11- 008-x/2008001/article/10459-eng.htm#16. For other statistics see Statistics Canada “2011 Census: Population and dwelling counts,” www.statcan.gc.ca/daily-quotidien/120208/dq120208a-eng.htm. 4 5.3% growth in city centres vs. 8.7% growth in suburbs 2006- 2011: “New census data shows Canadian suburbs rule” (CBC News, April 11, 2012), www.cbc.ca/news/canada/
story/2012/04/11/census-suburbs-growth.html.
5 For several definitions of sprawl that explore the various factors noted above, see M. Johnson, “Environmental impacts of urban sprawl: a survey of the literature and proposed research agenda,” Environment and Planning (2001), A 33(4) 717–735, www.
envplan.com/abstract.cgi?id=a3327.
6 National Roundtable on the Environment and the Economy, "Environmental Quality in Canadian Cities: The Federal Role" (NRTEE, 2003) p.6.
7 C. Burda, “RBC-Pembina Home Location Study, Understanding where Greater Toronto Area residents prefer to live” (July 2012), www.pembina.org/pub/2358.
8 In addition to the cost factor, businesses take into account, to varying degrees, the location of their markets and workforce. 9 The lack of carbon pricing has also had the effect of boosting long-range food imports.
10 Also, see P. Blais, Perverse Cities (UBC Press, Vancouver, 2011). 11 C. Burda, “RBC-Pembina Home Location Study, Understanding where Greater Toronto Area residents prefer to live” (July 2012), www.pembina.org/pub/2358.
12 Of course the lower cost of a house on the fringe is only one side of the story. The low sticker price is silent on the higher transportation costs – a point addressed later in this paper. 13 Urban density has no association with crime when factors such as income and class are taken into account: T. Litman,
“Transportation Cost and Benefit Analysis II” (VTPI, February 22, 2012), p. 5.14–6, www.vtpi.org/tca/tca0514.pdf. See also W. Lucy and R. Rabelais, “Traffic Fatalities and Homicides by Strangers:
Danger of Leaving Home in Cities, Inner Suburbs, and Outer Suburbs” (University of Virginia, April 29, 2002), urban.arch. virginia.edu/exurbia/death-in-exurbia.pdf.
14 Public Health Agency of Canada, “Injury in Review, 2012 Edition:
Spotlight on Road and Transport Safety,” available at http://tirf.ca/ publications/PDF_publications/Injury%20in%20Review%20 2012%20EN-WEB.pdf.
15 For a fuller assessment of the claims of sprawl advocates, see T.
Litman, “Evaluating Criticism of Smart Growth” (VTPI, September 2012), www.vtpi.org/sgcritics.pdf.
16 Benefits of sprawl tend to be internal (private): T. Litman, “Transportation Cost and Benefit Analysis II” (VTPI, February 22, 2012), p. 5.14–6, www.vtpi.org/tca/tca0514.pdf. See also T.
Litman, “Land Use Evaluation Evaluating How Transportation Decisions Affect Land Use Patterns, and the Economic, Social and Environmental Impacts That Result” (September 10, 2012), www. vtpi.org/tdm/tdm104.htm#_Toc118879276.
17 For the leading and a more comprehensive and detailed look at the costs of sprawl, see R. Burchell, A. Downs, B. McCann and S.
Mukherji, Sprawl Costs: Economic Impacts of Unchecked
Development (Island Press, 2005). See also R. Burchell et al., “Costs of Sprawl – 2000” (Transportation Research Board, National Research Council), http://onlinepubs.trb.org/onlinepubs/tcrp/ tcrp_rpt_74-a.pdf; T. Litman, “Understanding Smart Growth Savings” (VTPI, December 10, 2012), www.vtpi.org/sg_save.pdf; T.
Litman, “Costs and Benefits of Different Land Use Patterns,” http:// www.vtpi.org/tdm/tdm104.htm#_Toc118879276. 18 This discussion borrows from D. Thompson, “Moving Forward in Hamilton: Transportation, Sprawl and Environmental Pricing Reform” (City of Hamilton and Sustainable Prosperity, April 2011), available at www.sustainableprosperity.ca/article1263.
19 Development charges (also termed development cost charges, development levies, off-site levies) are levied by municipal governments in order to recover some of the costs that new development imposes on them. They are further discussed below.
20 Carmin, JoAnn, Nikhil Nadkarni, and Christopher Rhie, “Progress and Challenges in Urban Climate Adaptation Planning: Results of a Global Survey” (Cambridge, MA: MIT, 2012), available at www. icleiusa.org/action-center/learn-from-others/
progress-and-challenges-in-urban-climate-adaptation-planning- results-of-a-global-survey. 21 City of Edmonton, “Costs and Revenues for New Areas” (May 11, 2011), available at http://www.chba.ca/uploads/urban_council/ Oct2011/Tab%206%20-%20Costs%20and%20Revenues%20 for%20New%20Areas%20-%20City%20of%20Edmonton%20
paper.pdf.
22 City of Edmonton, “Costs and Revenues for New Areas” (May 11, 2011), available at http://www.chba.ca/uploads/urban_council/ Oct2011/Tab%206%20-%20Costs%20and%20Revenues%20 for%20New%20Areas%20-%20City%20of%20Edmonton%20
paper.pdf. See also D. Thompson “Paying the Price for Suburban Sprawl” (Edmonton Journal, September 22, 2011), www2.canada. com/edmontonjournal/news/ideas/story.html?id=13d48068-
1fd3-4bd7-a53c-98e826655961. The City of Edmonton study focused on municipal revenues and costs. It did not address the economic benefits of development, whether that takes place at the suburban fringe or inside the established areas of the city, nor did it address externalities. To the credit of Edmonton Council and Administration, the City continues to gather data.
23 “Peel doubles development fees, house prices are going up” (September 24, 2012), www.mississauga.com/ article/1507350--peel-doubles-development-fees-house-pricesare-going-up. 24 P. Criscione, “Peel approves development charges hike” (Brampton Guardian, September 15, 2012), www.
bramptonguardian.com/news/
article/1503036--peel-approves-development-charges-hike. 25 City of Edmonton, “Costs and Revenues for New Areas” (May 11, 2011), available at http://www.chba.ca/uploads/urban_council/ Oct2011/Tab%206%20-%20Costs%20and%20Revenues%20 for%20New%20Areas%20-%20City%20of%20Edmonton%20
paper.pdf.
26 Halifax Regional Municipality, “Settlement Pattern and Form with Service Cost Analysis” (April 2005), www.halifax.ca/
regionalplanning/publications/documents/
PatternBookVol2Apr05.pdf.
27 Stantec, "Final Report: Quantifying the Costs and Benefits to HRM, 25 Fede r a l & Pr ovincia l Ro les
Residents and the environment of alternate Growth Scenarios" (April 2013) Table 9.5 www.halifax.ca/boardscom/documents/ HRMGrowthScenariosFinalReportApril292013.pdf.
28 Stantec, "Final Report: Quantifying the Costs and Benefits to HRM, Residents and the environment of alternate Growth
Scenarios" (April 2013) Table 9.5 www.halifax.ca/boardscom/ documents/HRMGrowthScenariosFinalReportApril292013.pdf. 29 IBI Group, “The Implications of Alternative Growth Patterns on Infrastructure Costs” (City of Calgary, 2009), available at http:// www.reconnectingamerica.org/assets/Uploads/ planitcalgarycoststudyanalysisaprilthird.pdf.
30 City of London, "Building a Mixed-Use, Compact City" (2013) http:// feedback.rethinklondon.ca/pdfs/Discussion%20
papers%20-%20Section%203%20-%20COMPACT%20CITY.pdf.
31 A further local – though not necessarily municipal – cost is that of building new schools for new suburbs. Depending on the jurisdiction, the provincial government may pay or the local school board may pay. As new schools on the fringes are built and filled, school attendance declines in many established neighbourhoods, resulting in closures that further drive families out of those neighbourhoods. When a neighbourhood declines, municipalities need to raise taxes elsewhere and pay for more services.
32 Personal communication, Shannon Joseph, Federation of Canadian Municipalities.
33 Transport Canada, “Transportation in Canada 2011, Appendix A - Statistical Addendum, Table G5: Transport Expenditure & Revenues by Mode and Levels of Government, 2002/03
-2011/12,” www.tc.gc.ca/eng/policy/anre-menu-3037.htm.
34 Transport Canada, “Transportation in Canada 2011, Appendix A - Statistical Addendum, Table G5: Transport Expenditure & Revenues by Mode and Levels of Government, 2002/03
-2011/12,” www.tc.gc.ca/eng/policy/anre-menu-3037.htm.
35 Transport Canada, “Transportation in Canada 2011, Appendix A - Statistical Addendum, Table G5: Transport Expenditure & Revenues by Mode and Levels of Government, 2002/03
-2011/12,” www.tc.gc.ca/eng/policy/anre-menu-3037.htm.
36 Transport Canada, “Transportation in Canada 2011, Appendix A - Statistical Addendum, Table G5: Transport Expenditure & Revenues by Mode and Levels of Government, 2002/03
-2011/12,” www.tc.gc.ca/eng/policy/anre-menu-3037.htm. This finding of a massive annual subsidy to road users is confirmed by many other sources. For example, Vander Ploeg, “Delivering the Goods: Infrastructure and Alternative Revenue Sources for the City of Edmonton” (Canada West Foundation, June 2008), p. 31, http://cwf.ca/publications-1/delivering-the-goods- infrastructure-and-alternative-revenue-sources-for-the-city-ofedmonton; D. Maddison, D. Pearce et al., Blueprint 5: The True Cost of Road Transport (Earthscan, London, UK, 1996) at p. 194; Victoria Transport Policy Institute, “Transportation Cost and Benefit Analysis II – Roadway Costs, s. 5.6 Roadway Facility Costs,” http://www.vtpi.org/tca/tca0506.pdf; Subsidy Scope, “Analysis Finds Shifting Trends in Highway Funding: User Fees Make Up Decreasing Share” (November 25, 2009), http://subsidyscope. org/transportation/highways/funding/. 37 Transport Canada, “Estimates of the Full Cost of Transportation in Canada” (Transport Canada, Aug. 2008), p. 15, http://www.tc.gc. ca/media/documents/policy/report-final.pdf. 38 K. Vodden, D. Smith, F. Eaton, and D. Mayhew, “Analysis and Estimation of the Social Cost of Motor Vehicle Collisions in Ontario” (Transport Canada, August 2007), p. ii, available at http://www.tc.gc.ca/media/documents/roadsafety/TP14800E. pdf.
39 See T. Litman, “Transportation Cost and Benefit Analysis II – Evaluating Transportation Benefits,” (VTPI, February 22, 2012), pp. 7-6 to 7-7, www.vtpi.org/tca/tca07.pdf.
40 Transport Canada, “Estimates of the Full Cost of Transportation in Canada” (Transport Canada, August 2008), p. 15, http://www. tc.gc.ca/media/documents/policy/report-final.pdf. 41 D. Shoup, The High Cost of Free Parking (Chicago: Planners Press, 2005). See also D. Shoup, “The High Cost of Free Parking” reprinted from Journal of Planning, Education and Research, vol. 17, pp. 3–20, University of California Transportation Centre, UCTC No. 351, http://www.uctc.net/papers/351.pdf.
42 T. Wong, “Employer-paid parking increases solo driving by 60%” (July 5, 2011), www.thestar.com/life/homes/2011/07/05/
this_toronto_parking_spot_costs_100000_a_year.html.
43 National Parking Association, “Parking In America, The Second Annual Review of Parking Rates in the United States and Canada” (2009), p.20 & ff, www.npapark.org/pdfs/Parking_In_ America_2009.pdf. 44 Employer-paid parking increases solo driving by 60%: D. Shoup, “The High Cost of Free Parking,” PPT slide 12, http://www.trb.org/ Conferences/RoadPricing/Presentations/Shoup.ppt. 45 $136 billion to $386 billion per year in the U.S., as of 2002: D.
Shoup, “The High Cost of Free Parking,” PPT slide 7, http://www. trb.org/Conferences/RoadPricing/Presentations/Shoup.ppt. Tens of billions for Canada assumes roughly 10% of population of U.S. 46 Environment Canada, “National Inventory Report 1990–2010:
Greenhouse Gas Sources and Sinks in Canada,” p. 73, available at http://www.ec.gc.ca/ges-ghg/.
47 Mt = megatonnes of CO2 equivalent greenhouse gas emissions.
Environment Canada, “National Inventory Report 1990–2010:
Greenhouse Gas Sources and Sinks in Canada, Part 1,” p. 73, available at http://www.ec.gc.ca/ges-ghg/.
48 I. Bart, “Urban sprawl and climate change: A statistical exploration of cause and effect, with policy options for the EU” (Land Use Policy 27:2, April 2010), pp. 283-292, www.
sciencedirect.com/science/article/pii/S0264837709000374. 49 Natural Resources Canada (2009) The Urban Archetypes Project, Community Case Study: The City of Calgary, http:// canmetenergy.nrcan.gc.ca/buildings-communities/ communities/publications/2279, and Statistics Canada (2007) Commuting Patterns and Places of Work of Canadians, 2006 Census, Catalogue Number 97-561-X, Statistics Canada, Ottawa, Canada, as cited by N. Keough, “Final Report to Canada
Mortgage and Housing Corporation Project: Action Research on Transportation Housing Affordability” (June 2011), p. 4-5, available at http://sustainablecalgary.org/wp-content/ uploads/2012/06/AffordableLivingReport.pdf. 50 Natural Resources Canada (2009), The Urban Archetypes Project, Community Case Study: The City of Calgary, http:// canmetenergy.nrcan.gc.ca/sites/canmetenergy.nrcan.gc.ca/files/ files/pubs/calgary_e.pdf, and Statistics Canada (2007)
Commuting Patterns and Places of Work of Canadians, 2006 Census, Catalogue Number 97-561-X, Statistics Canada, Ottawa, Canada, as cited by N. Keough, “Final Report to Canada
Mortgage and Housing Corporation Project: Action Research on Transportation Housing Affordability” (June 2011), p. 4-5, available at http://sustainablecalgary.org/wp-content/ uploads/2012/06/AffordableLivingReport.pdf. 51 “Preliminary estimates peg insured damages from ‘Superstorm’ Sandy at $100 million” (CNW, November 28, 2012), http://www. ibc.ca/en/Media_Centre/News_Releases/2012/11-28-2012.asp. 52 L. Morello, “Climate Change Loads the Dice for More Extreme Weather” (July 11, 2012) www.scientificamerican.com/article. cfm?id=climate-change-increases-extreme-weather-events. 53 National Round Table on the Environment and the Economy, “Paying the Price: The Economic Impacts of Climate Change for Canada,” http://nrtee-trnee.ca/climate/climate-prosperity/ the-economic-impacts-of-climate-change-for-canada/ paying-the-price.
54 D. Adam, “I underestimated the threat, says Stern” (The Guardian, April 18, 2008), http://www.guardian.co.uk/environment/2008/ apr/18/climatechange.carbonemissions. 55 Of course, the impacts of climate change could end up being much more severe, e.g., mass extinctions, global coastal flooding and the collapse of modern civilization: P. Ward, Under a Green Fede r a l & Pr ovincia l Ro les 26
Sky: Global Warming, the Mass Extinctions of the Past, and What They Can Tell Us About Our Future (Smithsonian, 2007); D. Beillo, “Mass Extinctions Tied to Past Climate Changes: Fossil and temperature records over the past 520 million years show a correlation between extinctions and climate change” (Scientific American, October 24, 2007), http://www.scientificamerican.com/ article.cfm?id=mass-extinctions-tied-to-past-climate-changes; S.
Connor, “Climate change is linked to mass extinctions of past” (The Independent, October 24, 2007), http://www.independent.co.uk/ news/science/climate-change-is-linked-to-mass-extinctions-ofpast-397707.html; Peter Ward, “The Flooded Earth: Our Future in a World Without Ice Caps” (Basic Books, 2010), http://floodedearth. com/; J. Owen, “The planet’s future: Climate change ‘will cause civilisation to collapse’: Authoritative new study sets out a grim vision of shortages and violence – but amid all the gloom, there is some hope too” (The Independent, July 12, 2009), http://www. independent.co.uk/environment/climate-change/the-planetsfuture-climate-change-will-cause-civilisation-tocollapse-1742759.html. 56 CBC News, “Ontario’s smog causes 9,500 deaths per year, medical association says” (June 6, 2008), http://www.cbc.ca/health/ story/2008/06/06/smog-deaths.html. 57 Nearly 4,900 Ontarians are killed by infectious disease per year: J.
Kwong, N. Crowcroft, M. Campitelli, S. Ratnasingham, N. Daneman, S. Deeks, and D. Manuel, “Ontario Burden of Infectious Disease Study (Institute for Clinical Evaluative Sciences and Ontario Agency for Health Protection and Promotion, December 2010), p. 5, http://www.ices.on.ca/file/ONBOIDS_FullReport_intra.pdf. 58 M. Campbell, K. Bassil, C. Morgan, M. Lalani, R. Macfarlane, and M.
Bienfeld, “Air Pollution Burden of Illness from Traffic in Toronto – Problems and Solutions” (November 2007, Toronto Public Health), http://www.toronto.ca/health/hphe/pdf/air_pollution_ burden.pdf. 59 D. Thompson, “Putting Transportation on Track in the GTHA: A survey of road and rail emissions comparisons” (Sustainable Transportation and Pembina Institute January 19, 2011), www. sustainableprosperity.ca/article699.
60 Emmanuelle Bournay, UNEP/GRID-Arendal, “Urban density and transport-related energy consumption,” www.grida.no/ graphicslib/detail/ urban-density-and-transport-related-energy-consumption_eda9. 61 Munich Re, https://www.munichre.com/touch/naturalhazards/en/ homepage/default.aspx. 62 J. Cato, “The real cost of car ownership” (Globe and Mail, September 2, 2010), www.theglobeandmail.com/globe-drive/ new-cars/auto-news/the-real-cost-of-car-ownership/ article1378882/.
63 This assumes a 2.5% return on investment compounded monthly.
At 5%, the total would be more than $940,000.
64 92% of Canadians in their 50s have less to retire on. CNW Newswire, “CIBC Poll: Short on Savings, Canada’s 50-somethings plan to retire at age 63 – and keep working” (August 20, 2012), www.newswire.ca/en/story/1023111/
cibc-poll-short-on-savings-canada-s-50-somethings-plan-to- retire-at-age-63-and-keep-working. 65 CNT, “Penny Wise, Pound Fuelish: New Measures of Housing + Transportation Affordability” (CNT, March 2010), www.cnt.org/ repository/pwpf.pdf. 66 CNT, “Penny Wise, Pound Fuelish: New Measures of Housing + Transportation Affordability” (CNT, March 2010), www.cnt.org/ repository/pwpf.pdf. 67 N. Keough, “Final Report to Canada Mortgage and Housing Corporation Project: Action Research on Transportation Housing Affordability” (June 2011), available at http://sustainablecalgary. org/wp-content/uploads/2012/06/AffordableLivingReport.pdf. The figure 1,800% (used in the source) translates to eighteen times as many houses.
68 J. Lehrer, “Commuting” (ScienceBlogs: The Frontal Cortex, March 30, 2010), http://scienceblogs.com/cortex/2010/03/30/
commuting/.
69 International Energy Agency, “World Energy Outlook 2012,” www. iea.org/publications/freepublications/publication/English.pdf. 70 J. Cortright, “Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs” (CEOs for Cities, May 2008), www.ceosforcities.org/files/Driven%20to%20the%20 Brink%20FINAL.pdf.
71 They also find themselves in a Catch-22. They need to reduce their costs but are unable to unload a very large annual cost – their automobiles – because they are dependent on it to get to work.
Thanks go to Noel Keough for pointing this out.
72 See, for example, K. Perrotta, “Public Health and Land Use Planning: How Ten Public Health Units are Working to Create Healthy and Sustainable Communities” (Clean Air Partnership and Ontario Public Health Association, April 2011), www.
cleanairpartnership.org/files/CAP%20PHLUP%20Background%20 Report%20April%202011.pdf; Alberta Health Services, “Urban sprawl and health” (April 2009), www.albertahealthservices.ca/ poph/hi-poph-hpp-info-urban-sprawl.pdf; R. Bray, C. Vakil, D. Elliott, and A. Abelsohn, “Report on Public Health and Urban Sprawl in Ontario A review of the pertinent literature” (Ontario College of Family Physicians, January 2005), www.ocfp.on.ca/docs/ publications/urbansprawl.pdf; R. Jackson, T. Harp, and T. Wright, “Land use planning: why public health must be involved” (J. Law Med Ethics, 2002, Fall 30 (3 Suppl) 70-4, available at www.ncbi.nlm. nih.gov/pubmed/12508506; S. Johnson and J. Marko, “Designing healthy places: Land use planning and public health” (Capital Health, 2007), http://www.interiorhealth.ca/YourEnvironment/ HealthyBuiltEnvironment/Documents/Designing%20Healthy%20 Places.pdf
73 A. Motluk, “Neighbourhood Health” (University of Toronto Magazine, Winter 2013, p. 20), http://www.magazine.utoronto.ca/ leading-edge/neighbourhood-health-gillian-booth-alison- motluk/. See also, for example, V. Russell-Evans, “Expanding cities and expanding waistlines: Urban sprawl and its impact on obesity, how the adoption of smart growth statutes can build healthier and more active communities” (January 1, 2009), Texas Medical Center Dissertations (via ProQuest), Paper AAI1470109, available at http://digitalcommons.library.tmc.edu/dissertations/ AAI1470109.
74 V. Russell-Evans, “Expanding cities and expanding waistlines:
Urban sprawl and its impact on obesity, how the adoption of smart growth statutes can build healthier and more active communities” (January 1, 2009), Texas Medical Center
Dissertations (via ProQuest), Paper AAI1470109, available at http:// digitalcommons.library.tmc.edu/dissertations/AAI1470109. 75 R. Bray, C. Vakil, D. Elliott, and A. Abelsohn, “Report on Public Health and Urban Sprawl in Ontario: A review of the pertinent literature” (Ontario College of Family Physicians, January 2005), www.ocfp.on.ca/docs/publications/urbansprawl.pdf.
76 W. Lucy, “Mortality Risk Associated With Leaving Home:
Recognizing the Relevance of the Built Environment” (American Journal of Public Health, September 2003, vol. 93, no. 9), www. minority.unc.edu/sph/minconf/2004/materials/lucy.et.al.pdf. 77 R. Ewing, R. Schieber, and C. Zegeer, "Urban Sprawl as a Risk Factor in Motor Vehicle Occupant and Pedestrian Fatalities" American Journal of Public Health, Vol.93/9 (Sept 2003) http://ajph. aphapublications.org/doi/abs/10.2105/AJPH.93.9.1541. 78 Statistics Canada, “Motor vehicle accidents causing death, by sex and by age group,” www.statcan.gc.ca/tables-tableaux/sum-som/ l01/cst01/health112a-eng.htm. 79 Statistics Canada, “CANSIM Table 102-0551 Deaths and mortality rate, by selected grouped causes, age group and sex, Canada annual,” www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=en g&id=1020551&paSer=&pattern=&stByVal=1&p1=1&p2=37&tab Mode=dataTable&csid=.
80 S. Wilson, “Ontario’s wealth. Canada’s future” (David Suzuki Foundation, 2008), http://greenbelt.ca/sites/default/files/ 27 C onclu sions
david_suzuki_foundation_-_value_of_greenbelt_eco-services_ study_.pdf.
81 New York State Department of Environmental Conservation, “New York City Watershed Program,” www.dec.ny.gov/ lands/25599.html. 82 City of St. John’s, “St. John’s Municipal Plan” (June 2007, revised July 2012), http://www.stjohns.ca/publications/ st-johns-municipal-plan. 83 City of Saint John, “Municipal Plan 2011,” http://www.saintjohn. ca/site/media/SaintJohn/Municipal%20Plan%20for%20web%20 2012-01-12.pdf.
84 City of Ottawa, “Official Plan, s.2.2 Managing Growth,” http:// ottawa.ca/en/official-plan-0/22-managing-growth. 85 Objective 4 in City of Hamilton, “Hamilton Transportation Master Plan” (May 2007), http://www.hamilton.ca/CityDepartments/ PublicWorks/Environment_Sustainable_Infrastructure/ StrategicPlanning/StrategicEnvironmentalPlanningProjects/ GRIDS/Transportation+Master+Plan.htm.
86 City of Saskatoon, “Integrated Growth” (June 2012), www. saskatoon.ca/DEPARTMENTS/Community%20Services/
PlanningDevelopment/Documents/Integrated%20Growth%20
Plan/Bridging%20Document_version_7_WEB.pdf.
87 City of Calgary, “Municipal Development Plan” (June 2012), www. calgary.ca/_layouts/cocis/DirectDownload.
aspx?target=http%3a%2f%2fwww.calgary.ca%2fPDA%2fLUPP%
2fDocuments%2fPublications%2fmdp-municipal-developmentplan.pdf&noredirect=1&sf=1. 88 Metro Vancouver, “Regional Growth Strategy: Metro Vancouver 2040, Shaping Our Future,” http://vancouver.ca/docs/eastern- core/regional-growth-strategy.pdf. 89 R. Tomalty and D. Alexander, “Smart Growth in Canada: A Report Card” (Canada Mortgage and Housing Corporation, December 2005), http://www.cmhc-schl.gc.ca/odpub/pdf/64931.pdf.
90 5.3% growth in city centres vs. 8.7% growth in suburbs 2006- 2011: “New census data shows Canadian suburbs rule” (CBC News, April 11, 2012), www.cbc.ca/news/canada/
story/2012/04/11/census-suburbs-growth.html.
91 See Ellen Dunham-Jones, “Retrofitting suburbia,” video on TED. com, http://www.ted.com/talks/ellen_dunham_jones_ retrofitting_suburbia.html. 92 Statistics Canada, “Population projections: Canada, the provinces and territories” (May 26, 2010), www.statcan.gc.ca/daily- quotidien/100526/dq100526b-eng.htm. 93 For all Calgary numbers in this section, see Ipsos Reid, “City of Calgary 2012 Citizen Satisfaction Survey,” www.calgary.ca/CS/ CSC/Documents/2012_Citizen_Satisfaction_survey.pdf. 94 Ipsos Reid, “City of Calgary 2012 Citizen Satisfaction Survey,” p. 50, www.calgary.ca/CS/CSC/Documents/2012_Citizen_Satisfaction_ survey.pdf.
95 Reported at Ipsos Reid, “City of Vaughan – Citizen Survey” (March 2012), https://www.vaughan.ca/projects/General%20 Documents/City%20of%20Vaughan%20Survey%202012.pdf. 96 See generally, Sustainable Prosperity “Managing Urban Sprawl:
Reconsidering Development Cost Charges in Canada” (January 30, 2012), www.sustainableprosperity.ca/article2364; P. Blais, Perverse Cities (UBC Press, Vancouver 2011).
97 H. Kitchen and R. Lindsey, “Financing Roads and Public Transit in the Greater Toronto and Hamilton Area” (RCCAO, January 2013), p. 22, www.rccao.com/news/files/RCCAO_JAN2013_REPORT_
LOWRES.pdf; P. Blais, Perverse Cities (UBC Press, Vancouver 2011). 98 City of Kitchener, “Current Development Charges,” www.kitchener. ca/en/businessinkitchener/DevelopmentChargesStudy.
asp?hdnContent=.
99 City of Kitchener, “Current Development Charges,” www.kitchener. ca/en/businessinkitchener/DevelopmentChargesStudy.
asp?hdnContent=.
100 City of Ottawa, “Current Fee Schedule,” http://ottawa.ca/en/ current-fee-schedule.
101 City of Hamilton, “Development Charges Information for By-law #09-143, By-law #11-174, and By-law #11-175 (as amended),” www.hamilton.ca/NR/rdonlyres/D7A0F30E-0695-4340-8818-
BAE48D678504/0/DCPamphletJuly20122013UpdatedFP.pdf.
102 R. Gansdia, “City, developers reach agreement on building levy” (April 15, 2011), www.calgarysun.com/news/ alberta/2011/04/15/18013646.html. 103 D. Hutton, “Nenshi warns of suburban sprawl” (StarPhoenix, June 1, 2012), www2.canada.com/saskatoonstarphoenix/news/story. html?id=6463cc83-d811-4e1e-9b6f-7c9514eea1f8&p=1. 104 P. Criscione, “Peel approves development charges hike” (Brampton Guardian, September 15, 2012), www.
bramptonguardian.com/news/
article/1503036--peel-approves-development-charges-hike. 105 City of Ottawa, “Development Charges,” http://ottawa.ca/en/ development-charges. 106 M. Siegel, “The Effects of Land Use on Wastewater Utility Costs” (National Resources Defense Council, 1998), www.nrdc.org/cities/ smartGrowth/cost/costinx.asp. 107 E. Slack, “Municipal Finance and the Pattern of Urban Growth” (CD Howe Institute, no. 160 February 2002), www.cdhowe.org/pdf/ commentary_160.pdf. 108 City of Terrace, “Terrace Water Frontage Tax Bylaw #1573-1997,” www.terrace.ca/documents/bylaws-general/Water-Frontage-TaxBylaw-1573-Consolidated-to-1857.pdf. 109 City of Winnipeg, “Frontage Levies,” www.winnipegassessment. com/AsmtTax/English/Property/FrontLevies.stm. 110 E. Slack, “Municipal Finance and the Pattern of Urban Growth” (CD Howe Institute, February 2002), pp. 17-18, http://www.cdhowe. org/pdf/commentary_160.pdf. 111 W. Oates and R. Schwab, “The Impact of Urban Land Taxation: The Pittsburgh Experience” (November 1996), p. i, http://www. lincolninst.edu/subcenters/property-valuation-and-taxationlibrary/dl/oates_schwab.pdf. For a review of Harrisburg’s LVT initiative, see R. Tomalty, “Innovative Infrastructure Financing Mechanisms for Smart Growth” (SmartGrowth BC, December
2007), pp. 27 and 80 & ff, http://www.smartgrowth.bc.ca/ Portals/0/Downloads/sgbc-infrastructure-report-web.pdf. 112 R. England, “Property Tax Reform and Smart Growth: Connecting Some of the Dots” (Lincoln Institute on Land Policy, Land Lines:
January 2004, Vol. 16, no. 1), https://www.lincolninst.edu/ pubs/871_Property-Tax-Reform-and-Smart-Growth. 113 The lower rate applies to any building with three or fewer units, as well as to condos and co-ops. City of Edmonton, “Bylaw 15966 - 2012 Property Tax and Supplementary Property Tax Bylaw,” www.edmonton.ca/bylaws_licences/15966.pdf.
114 City of Edmonton, “10-Year Strategic Goal: Transform Edmonton’s Urban Form,” www.edmonton.ca/city_government/documents/ Way_We_Grow_Strategic_Goals.pdf. 115 City of Toronto, “2012 Final Property Tax Rates,” www.toronto.ca/ taxes/property_tax/tax_rates.htm. Note that in Toronto, a lower rate applies to encourage new multi-residential buildings, but only for 35 years.
116 City of Hamilton, “2012 Residential Tax Rates,” www.hamilton.ca/ NR/rdonlyres/407CEEDF-B230-4DE9-85F4-
4B30B12E5218/0/038_2012_Residential_general_and_area_
specific_rates_by_community.pdf. Note that tax rates are not higher in suburban areas close to highways and arterial roads 117 City of Winnipeg, “2012 Mill Rates,” www.winnipegassessment. com/Asmttax/pdfs/rates/2012CombinedMillRates.pdf. 118 Ville de Montreal, “2013 Tax Rates,” http://ville.montreal.qc.ca/pls/ portal/docs/PAGE/SERVICE_FIN_EN/MEDIA/DOCUMENTS/2013_ E ndnotes 28
TAUX_ANG.PDF.
119 The claim could be made that imposing higher rates on multiunit rental properties is justified because a business entity is paying the tax, not the resident. However, single-family dwellings that are rented will not pay that higher tax. Furthermore, it is likely that the business entity will pass on much or even all of the cost to tenants in higher rent. A political explanation, though unpleasant to contemplate, could be that renters tend not to vote as much as homeowners.
120 Ontario, for example, allows municipalities to designate a parking lot and vacant land property class: Ontario Regulation 282/98, s. 13, www.e-laws.gov.on.ca/html/regs/english/elaws_ regs_980282_e.htm#BK14. Different tax rates can be set for different classes of property.
121 City of Hamilton, “2012 Residential Tax Rates,” www.hamilton.ca/ NR/rdonlyres/407CEEDF-B230-4DE9-85F4-
4B30B12E5218/0/038_2012_Residential_general_and_area_
specific_rates_by_community.pdf. Note that tax rates are not higher in suburban areas close to highways and arterial roads. 122 City of Winnipeg, “How are Taxes Calculated – Tax Rates: Current Mill Rates” available at www.winnipegassessment.com/AsmtTax/ English/Property/TaxRates.stm. 123 City of Hamilton, “2012 Residential Tax Rates,” www.hamilton.ca/ NR/rdonlyres/407CEEDF-B230-4DE9-85F4-
4B30B12E5218/0/038_2012_Residential_general_and_area_
specific_rates_by_community.pdf. Note that tax rates are not higher in suburban areas close to highways and arterial roads. 124 Objective 4 in City of Hamilton, “Hamilton Transportation Master Plan” (May 2007), http://www.hamilton.ca/CityDepartments/ PublicWorks/Environment_Sustainable_Infrastructure/ StrategicPlanning/StrategicEnvironmentalPlanningProjects/ GRIDS/Transportation+Master+Plan.htm.
125 City of Windsor, “Brownfield Redevelopment Community Improvement Plan,” www.citywindsor.ca/residents/planning/ Planning-Policy/Documents/BRS%20City%20of%20Windsor%20 Brownfield%20Redevelopment%20Community%20
Improvement%20Plan%20(CIP).pdf.
126 Ontario Ministry of Agriculture, Food and Rural Affairs, “2012 Farm Property Class Tax Rate,” www.omafra.gov.on.ca/english/ policy/ftaxfacts.htm. 127 For example, Natural Area Protection Tax Exemption Program:
Islands Trust Fund, “Ways to Protect your Land: Register a NAPTEP Covenant,” www.islandstrustfund.bc.ca/initiatives/
privateconservation/naptep.aspx.
128 Q. Su and J. DeSalvo, “The Effect of Transportation Subsidies on Urban Sprawl” (Journal of Regional Science 48, no. 3, 2008), pp. 567–594, http://economics.usf.edu/PDF/JRS%2048(3)%202008. pdf.
129 Transport Canada, “Urban Transportation Pricing Options,” www. tc.gc.ca/eng/programs/environment-utsp-listofcasestudies-2594. htm; T. Litman, “Incentives To Use Alternative Modes and Reduce Driving,” www.vtpi.org/tdm/index.php#incentives.
130 T. Litman, “Carsharing: Vehicle Rental Services That Substitute for Private Vehicle Ownership” (VTPI, February 22, 2012), www.vtpi. org/tdm/tdm7.htm. 131 CUTA, “A National Transit Strategy for Canada” (Issue Paper 22), www.cutaactu.ca/en/publicationsandresearch/resources/
IssuePaperNo.22_ANationalTransitStrategyForCanada.pdf.
132 phototouring permission given for image. Original on Flickr, http://www.flickr.com/photos/phototouring/3107773980/.
133 H. Kitchen and R. Lindsey, “Financing Roads and Public Transit in the Greater Toronto and Hamilton Area” (RCCAO, January 2013), www.rccao.com/news/files/RCCAO_JAN2013_REPORT_LOWRES.
pdf at p. 38. See also generally T. Litman, “Parking Taxes: Evaluating Options and Impacts” (February 2011), www.vtpi.org/ parking_tax.pdf. 134 H. Kitchen and R. Lindsey, “Financing Roads and Public Transit in the Greater Toronto and Hamilton Area” (RCCAO, January 2013), p. 37, www.rccao.com/news/files/RCCAO_JAN2013_REPORT_
LOWRES.pdf.
135 See generally VTPI, “Parking Pricing: Direct Charges for Using Parking Facilities,” www.vtpi.org/tdm/tdm26.htm.
136 For example, the Ontario government has given Toronto the power to levy such charges: H. Kitchen, “Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton:
Future Initiatives” (Residential and Civil Construction Alliance of Ontario, January 2008), p. 35, http://www.rccao.com/news/files/ RCCAOFinancingPublicTransitReport01-2008LR.pdf. 137 R. Molloy and H. Shan, “The Effect of Gasoline Prices on Household Location” (Federal Reserve Board, June 2010), www. federalreserve.gov/pubs/feds/2010/201036/index.html.
138 G. Tanguay and I. Gingras, “Gas Prices Variations and Urban Sprawl: an Empirical Analysis of the 12 Largest Canadian Metropolitan Areas” (CIRANO, April 2011), www.cirano.qc.ca/pdf/ publication/2011s-37.pdf. 139 Government of British Columbia, “Tax Rates on Fuels: Motor Fuel Tax Act and Carbon Tax Act” (October 2012), www.sbr.gov.bc.ca/ documents_library/bulletins/mft-ct_005.pdf. 140 H. Kitchen and E. Slack, “Special Study: New Finance Options for Municipal Governments” (Canadian Tax Journal, 2003, vol. 51, no. 6), p. 2247, http://www.fcf-ctf.ca/ctfweb/Documents/ PDF/2003ctj/2003ctj6-kitchen.pdf; H. Kitchen, “Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton: Future Initiatives” (Residential and Civil Construction Alliance of Ontario, January 2008), pp. 24-25. http://www.rccao. com/news/files/RCCAOFinancingPublicTransitReport01-2008LR. pdf.
141 H. Kitchen, “Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton: Future Initiatives” (Residential and Civil Construction Alliance of Ontario, January 2008), p. 23, http://www.rccao.com/research/files/RCCAOFinancingPublicTran sitReport01-2008LR.pdf.
142 J. Abel, I. Dey, and T. Gabe, “Productivity and the Density of Human Capital” (Federal Reserve Bank of New York Staff Report 440, September 2011), www.newyorkfed.org/research/staff_ reports/sr440.pdf. 143 E. Glaeser, “Why Humanity Loves, and Needs, Cities” (New York Times – Business Day, April 13, 2010), http://economix.blogs. nytimes.com/2010/04/13/why-humanity-loves-and-needs-cities/. 144 TD Economics, “Toronto – A Return To The Core” (January 22, 2013), www.td.com/document/PDF/economics/special/ff0113_ toronto.pdf. 145 Oil and gas extraction ranks 58th of 59 industries in Canada.
Support activities for mining, oil and gas extraction is 43rd.
Petroleum and coal products manufacturing is 59th.
146 D. Thompson and S. Joseph, “Building Canada’s Green Economy:
The Municipal Role” (Federation of Canadian Municipalities and Sustainable Prosperity, 2012), p. 29, available at http://www.fcm. ca/Documents/reports/Building_Canadas_green_economy_the_ municipal_role_EN.pdf and http://www.sustainableprosperity.ca/ article2409. Data from Industry Accounts Division, System of National Accounts, Statistics Canada, “National Input-Output Multipliers - 2006p – M-level aggregation.”
147 OECD, “Comparisons of developments in tax rates over time,” www2.oecd.org/ecoinst/queries/TaxRateInfo.htm. “Canada” and arrow added by author.
148 H. Kitchen and R. Lindsey, “Financing Roads and Public Transit in the Greater Toronto and Hamilton Area” (RCCAO, January 2013), www.rccao.com/news/files/RCCAO_JAN2013_REPORT_LOWRES.
pdf at p. 43.
149 D. Drummond, D. Burleton, G. Manning, and K. Richardson, “The Greater Toronto Area (GTA): Canada’s Primary Economic
Locomotive in Need of Repairs” (TD Bank Economics, May 22, 2002), p. 26, http://www.td.com/document/PDF/economics/ 29 E ndnotes
special/td-economics-special-db0502-gta.pdf.
150 See generally Victoria Transport Policy Institute, “Online TDM Encyclopedia, Road Pricing,” http://www.vtpi.org/tdm/tdm35. htm. See also F. Nix, “Alternative Road Financing Arrangements: Research conducted for the Canada Transportation Act Review” (Transport Canada, March 2001), pp. 18–35; D. Brown, G. Hoover, A. Howatson, and J. Schulman, “Canada’s Transportation
Infrastructure Challenge: Strengthening the Foundations – Distance Based Pricing” (Conference Board of Canada, January 2005), p. 15, http://www.conferenceboard.ca/e-library/abstract. aspx?DID=1137. 151 If the toll-paying, low occupancy vehicles begin to overwhelm the HOT lanes, the price can be raised.
152 Environmental Defence Fund, “HOT Lanes A Tool, Not A Panacea,” www.edf.org/news/hot-lanes-tool-not-panacea. See also R.
Tomalty, “Innovative Infrastructure Financing Mechanisms for Smart Growth” (SmartGrowth BC, December 2007), see pp. 7, 22 and 53 for a case study of San Diego’s HOT lanes, http://www. smartgrowth.bc.ca/Portals/0/Downloads/sgbc-infrastructurereport-web.pdf. 153 See generally VTPI, “Distance-Based Pricing” (August 31, 2011), www.vtpi.org/tdm/tdm10.htm.
154 H. Kitchen, “Financing Public Transit and Transportation in the Greater Toronto Area and Hamilton: Future Initiatives” (Residential and Civil Construction Alliance of Ontario, January 2008), p. 37, http://www.rccao.com/research/files/RCCAOFinancingPublicTran sitReport01-2008LR.pdf.
155 T. Litman, “Pay-As-You-Drive Vehicle Insurance” (December 10, 2012), www.vtpi.org/tdm/tdm79.htm.
156 WalkScore: www.walkscore.com/rankings/
cities/?&pop_min=10000&pop_max=10000000&scr_min=0&scr_ max=100®ion=Canada. 157 Note, however, the earlier discussion about the limits of information provision as a strategy for making change (see section on Personal Household Costs).
158 R. Chawla and T. Wannell, “Property taxes” (Statistic Canada, July 2003), www.statcan.gc.ca/pub/75-001-x/00703/6578-eng.html. 159 Re: transportation emissions harming lower income people, see, for example, M. Buzzelli, “Environmental Justice in Canada – It Matters Where You Live” (CPRN, December 2008), www.cprn.org/ documents/50875_EN.pdf; G. Walker, “Breathing Unequally: environmental justice and transport-related air pollution” (Lancaster University Environment Centre), www.tsu.ox.ac.uk/ events/ht12_seminars/ht12-walker.pdf; S. Kingham, J. Pearce, and P. Zawar-Reza, “Driven to injustice? Environmental justice and vehicle pollution in Christchurch, New Zealand” (Elsevier Transportation Research Part D 12 (2007), pp. 254–263, www. aseanenvironment.info/Abstract/41016221.pdf; T. Buckley et al., “An Approach for Identifying Environmental Justice Communities at Risk to Mobile-Source Related Air Pollution” (Transportation Equity Cooperative Research Program, February 22, 2008), www. scribd.com/doc/11480960/Public-Health-Risk.
160 City of Kitchener, “Financial Incentives,” www.kitchener.ca/en/ businessinkitchener/financialincentives.asp?_mid_=17562. 161 Administrative efficiency sometimes argues for upward rate adjustments in existing charges and taxes, rather than adding new ones.
162 For a similar list, see Government of British Columbia, “Community Charter, Policy Analysis,” www.cscd.gov.bc.ca/lgd/ gov_structure/community_charter/policy_analysis.htm. 163 This discussion borrows from D. Thompson and A. Bevan, “Smart Budget: A Background Paper on Environmental Pricing Reform for Local Governments” (Sustainable Prosperity, January 10, 2010), www.sustainableprosperity.ca/article17.
164 S.O. 2001, c. 25, http://www.e-laws.gov.on.ca/html/statutes/ english/elaws_statutes_01m25_e.htm. 165 R.S.A. 2000, c. M-26, http://www.qp.alberta.ca/documents/Acts/ m26.pdf.
166 [RSBC 1996], Chapter 323, http://www.bclaws.ca/EPLibraries/ bclaws_new/document/ID/freeside/96323_00. 167 [SBC 1953], Chapter 55, http://www.bclaws.ca/EPLibraries/ bclaws_new/document/ID/freeside/vanch_00. 168 City of Toronto Act, 2006, S.O. 2006, Chapter 11, http://www.e- laws.gov.on.ca/html/statutes/english/elaws_statutes_06c11_e. htm.
169 The City of Winnipeg Charter Act, S.M. 2002, c. 39, web2.gov. mb.ca/laws/statutes/2002/c03902e.php. 170 For a discussion of the primary revenue-raising powers in individual local government statutes, see D. Lidstone,
“Assessment of the Municipal Acts of the Provinces and
Territories” (Federation of Canadian Municipalities, April 20, 2004), s. 2.7, “Delegation of Adequate Financial Resources,” and particularly ss. 2.7.3–2.7.16, http://www.fcm.ca/Documents/ reports/
Assessment_of_the_Municipal_Acts_of_the_Provinces_and_
Territories_EN.pdf.
171 E. Slack, “The Impact of Municipal Finance and Governance on Urban Sprawl” (Institute on Municipal Finance and Governance, Munk Centre, University of Toronto, September 25, 2006), p. 4, http://www.chba.ca/uploads/urban_council/2006-09-25%20
The%20Impact%20of%20Municipal%20Finance%20and%20
Governance%20on%20Urban%20Sprawl.pdf.
172 Development Charges Act, 1997, S.O. 1997, C. 27, s. 2, http:// www.e-laws.gov.on.ca/html/statutes/english/elaws_ statutes_97d27_e.htm.
173 Carbon pricing is shorthand for increasing the cost of emitting substances that cause climate change, including carbon dioxide and a wide range of other gases and particulates. See resources at Sustainable Prosperity, Low Carbon Economy, http://www. sustainableprosperity.ca/Low+Carbon+EN. 174 The Canadian Council of Chief Executives, the Canadian Association of Petroleum Producers, the Canadian Gas
Association, and the Canadian Vehicle Manufacturers Association are all in support of a price on carbon. “Canadian Business Preference on Carbon Pricing” (Sustainable Prosperity, February 2, 2011), http://www.sustainableprosperity.ca/article758.
175 M. Smart, “The Reform of Business Property Tax in Ontario: An Evaluation” (IMFG, 2012), http://munkschool.utoronto.ca/imfg/ uploads/202/imfg_no.10_online_june25.pdf.
E ndnotes 30
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SARA A. CLARK
Attorney
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March 7, 2022
Via E-Mail
City of Watsonville City Council
275 Main St., Suite 400 (4th Floor)
Watsonville, CA 95076
E-Mail: [email protected]
Re: Watsonville Planned Growth and Farmland Protective Initiative Impact Assessment
Dear Councilmembers:
On behalf of the proponents of the Watsonville Planned Growth and Farmland Protection Initiative (“Initiative”), we write to comment on the City of Watsonville’s (“City”) Analysis of the Watsonville Urban Limit Line Ballot Initiative, prepared pursuant to Elections Code section 9212 (the “Report”). The Report is informed in part by a March 2022 Watsonville Urban Limit Line Ballot Initiative Impact Assessment, prepared for the City by Economic & Planning Systems, Inc. (the “EPS Assessment”).
The purpose of a 9212 report is to provide an objective assessment of the fiscal and land use impacts of a proposed initiative. Elec. Code § 9212; see also DeVita v.
County of Napa (1995) 9 Cal.4th 763, 777 (objective of legislation enabling section 9111 reports was “to provide voters with an impartial analysis of proposed initiative measures”)1
; see also Tuolumne Jobs & Small Business Alliance v. Superior Court (2014) 59 Cal.4th 1029, 1041 (reports “balance the right of initiative with the goal of informing voters and local officials about the potential consequences of an initiative’s enactment”).
Moreover, although a local agency may spend public funds to provide information to the public about a ballot measure, this expenditure is permissible only if “[t]he information provided constitutes an accurate, fair, and impartial presentation of relevant facts.” Gov. 1 “[Elections Code] [s]ection 9111 is identical to section 9212 except that it applies to initiatives at the county, rather than city, level […] They are parallel statutory schemes addressing how initiatives must be handled at these different levels of government.” Tuolumne Jobs, 59 Cal.4th at 1041, n. 6.
City of Watsonville City Council
March 7, 2022
Code § 54964(c); see also Stanson v. Mott (1976) 17 Cal.3d 206, 210 (public agencies “may not expend public funds to promote a partisan position in an election campaign.”). “A fair presentation of the facts will necessarily include all the consequences, good and bad, of the proposal.” Id. at 220 (emphasis added).
As described below, the Report does not provide a fair and impartial assessment of the Initiative’s potential effects (and, relatedly, of Measure U’s positive achievements).
Rather, the Report is almost entirely skewed towards presenting the possible negative impacts of the Initiative, and of all the ways that Measure U has allegedly failed to achieve certain “objectives.” In fact, the entire Report identifies only one potential positive impact of the Initiative: that precluding development beyond the ULL would be economically beneficial to the Police Department, which would avoid the costs of providing services to new neighborhoods. Report at 16; see also EPS Assessment at 31.
The City’s skewed, partisan analysis of the Initiative is both unfair and illegal. To ensure that the public understands that the Report does not provide objective and impartial information about the Initiative’s potential effects, the City Council should affirmatively reject the Report on the grounds that is does not include a fair analysis of all the potential consequences of the Initiative, both good and bad. Our clients have prepared a companion report that the City Council can refer to with respect to information that was omitted, ignored, and impartially presented in the City’s Report and the EPS Assessment.
1. The Report fails entirely to address the positive impacts of the Initiative.
The Report focuses almost exclusively on the possible negative impacts of the Initiative, including the possibility that the Initiative will restrict the City’s ability to meet projected demand for housing development and eliminate future economic development opportunities in certain areas beyond the ULL. However, the Report fails to even consider, let alone analyze or discuss, the positive impacts the Initiative. These impacts include but are not limited to:
• Retainment of agricultural jobs and employment in agricultural support businesses, including associated tax revenue. As Proponents note in their report, of the leading City employers, at least four are directly related to local agriculture.
• Fiscal benefits of new infill development, including increased revenue to existing local businesses.
City of Watsonville City Council
March 7, 2022
• Positive environmental, economic, and food security impacts associated with retaining agricultural lands and open space.
Conversely, the Report also fails to consider or discuss the negative impacts of not renewing the ULL. These negative impacts include but are not limited to:
• The costs of annexing land beyond the ULL, including preparation of annexation documents and applications for submittal to the Santa Cruz County Local Agency Formation Commission and preparation of corresponding environmental impact assessments.
• The costs of extending infrastructure to currently undeveloped areas, including the possibility that funds that would otherwise be used to upgrade existing City infrastructure will instead be spent on extensions of infrastructure to newly annexed areas.2
• The loss of productive and irreplaceable farmland. As Proponents note in their report, in addition to its deeply fertile soil, the unique climate in the Pajaro Valley is found in only 2% of the world.
• Probable traffic impacts associated with urban sprawl and new development beyond the ULL.
• Negative financial impact to existing Watsonville businesses.
The Report’s myopic focus on the negative impacts of the Initiative presents a skewed and partisan view, and appears to be entirely intended to support the City Council’s pre-determined opinion of its effects. As currently drafted, it ignores the 2 The Report appears to suggest that because some existing City infrastructure needs to be updated, the infrastructure costs associated with infill development and green field development beyond the ULL will be roughly the same. Report at 16 (“New development…whether infill within City limits or development of new strategic areas at the City’s edge, will have one-time infrastructure improvement costs”); see also EPS Assessment at 33 (“Existing City infrastructure requires upgrades for deferred improvement and to accommodate growth, while expansion into new greenfield areas requires new supporting infrastructure”). The City provides no evidence for this assertion, which conflicts with other statements in the Report, e.g., that the “costs of extending infrastructure” to the Buena Vista Area are part of what make this area “infeasible for any future development.” Report at 6-7.
City of Watsonville City Council
March 7, 2022
intended purpose of Elections Code section 9212—to guide cities and voters to review the potential impacts across a wide variety of potential topic areas—and veers into impermissible electioneering. See, e.g., Stanson, 17 Cal.3d at 210.
2. The Report’s “evaluation” of the Measure U’s achievements is misleading and incomplete.
a. The Report inexplicably evaluates Measure U based on housing production and job creation metrics.
The Report purports to measure the “outcomes” of Measure U according to three metrics: “Protection of Farmland,” “Housing,” and Jobs.” Report at 3. The protection of farmland was a clear primary purpose of Measure U, but affirmative housing production and job creation were not.3
The Report recognizes this, noting that City staff identified these metrics based in part on “specific plans and general plans created since the adoption of Measure U.” Report at 3. The Report likewise acknowledges that “Measure U did not provide any specific or measurable economic or residential development targets.” Id.
Because no such targets can be found in Measure U itself, the Report measures “the outcomes of Measure U” against housing development and job creation targets pulled from the draft 2030 General Plan Update, the draft Atkinson Lane Specific Plan, and the Manabe-Ow Business Park Specific Plan. Report at 5.
Considering that affirmative housing production and job creation were not the purpose of Measure U, it is difficult to see how an analysis of housing production and job creation is at all relevant to the “success” of Measure U, or to this Initiative. Instead, the purpose of this comparison is to create the misleading impression that Measure has failed because the actual units developed and jobs created since Measure U fall well short of the “targets.”
b. The Report attributes certain negative outcomes to Measure U, when in fact those outcomes are the result of other conditions.
The Report’s reliance on the straw man housing production and job creation “targets” as metrics against which to analyze Measure U’s success also gives the misleading impression that Measure U itself is to blame for the City’s failure to meet 3 Measure U’s purpose was to define a ULL and direct phasing of development within the ULL to “promote continued economic development and efficient urban growth while sustaining and enhancing the agricultural economy in the [City] and the surrounding region.” Report at 3.
City of Watsonville City Council
March 7, 2022
these targets. For instance, the EPS Assessment, on a slide titled “What Has Measure U Achieved?” emphasizes that only 46 of 450 “targeted” units in the Atkinson Lane Area and 0 of 2,250 “targeted” units in the Buena Vista Area have been built since Measure U.
EPS Assessment at 7 (emphasis in original). The Assessment likewise highlights that 0 of the 290 “targeted” jobs in the same two areas have been created since Measure U. Id. (emphasis in original). The City’s Report contains charts with the same data, the clear purpose of which is to correlate Measure U with low job creation and housing production numbers within the ULL. Report at 6-7.
The goal of this framing is self-evident: to give the misleading impression that Measure U itself is to blame for the City’s failure to meet the identified targets. However, the details of the City’s Report and the EPS Assessment reveal otherwise. As the EPS Assessment later admits, the lack of development in the Buena Vista Area is the result of litigation, fragmentation of developable areas, and “infrastructure development challenges.” EPS Assessment at 12. The City’s Report likewise acknowledges that “the failure to meet projections is due to complications in the planning and development” of these areas, including so-called (and unexplained) “topographic constraints” and litigation. Report at 6-7.
It is one thing for the City to acknowledge and discuss development challenges in areas within the ULL. It is another, however, to explicitly frame its analysis of the Initiative and Measure U to give the misleading impression that Measure U itself is to blame for the City’s failure to develop within the ULL. c. The Report completely ignores farmland protection—Measure U’s primary purpose.
As noted above, the primary purpose of Measure U was to protect agricultural land from unnecessary and inefficient sprawl development. For example, one key finding of Measure U was that the ULL would “protect[] and promot[e] important agricultural, open space, and other natural resource uses.” The City’s General Plan reflects this primary purpose, noting that the ULL “is intended to help define the City and preserve agricultural land by not permitting urban development to encroach on agricultural land.” General Plan, Chapter 3, p. 30; see also id. at 35 (location of the ULL “tak[es] into account and balanc[es] agricultural and open space lands preservation, economic development and stability, environmental integrity, and social equity.”).
Despite this obvious and important goal, the City’s Report provides no analysis of Measure U’s achievement of this goal. Instead, the Report merely states the obvious— that no farmland outside of the ULL has been annexed or developed since Measure U.
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March 7, 2022
Report at 4. The EPS Assessment of farmland protection under Measure U is similarly skeletal, providing only that “The [ULL] has added restrictions to development on farmland and wetlands.” EPS Assessment at 7.
This complete failure to address Measure’s U success relative to farmland protection is inexplicable. An objective, impartial, complete analysis of the Initiative in relation to Measure U’s achievements would have included far more detail on this topic.
For example, the City could have considered how much farmland Measure U protected, quantified and discussed the benefits—economic, cultural, environmental—of that protection, and investigated what the City might have lost had that land been developed.
Without this analysis, the City and the voters are completely in the dark on the possible benefits of the Initiative. This omission is unfair and impermissibly partisan.
3. The Report fails to consider how recent state housing legislation designed to address the state’s housing crisis might effect possible housing units.
Both the Report and the EPS Assessment assume that new housing units will only be provided on vacant or underutilized parcels. But this approach is directly contrary to recent policy decisions made at the state level, which are intended to greatly encourage and facilitate increased density in single-family neighborhoods. By enabling greater density within existing communities, the City can accommodate needed residential growth without developing precious agricultural lands.
Specifically, SB 9—passed in 2021—requires local jurisdictions to ministerially approve both duplexes and lot splits in single-family neighborhoods. According to the University of California, Berkeley Terner Center for Housing Innovation, SB 9 has the potential to allow for the development of nearly 6 million new housing units across the state.4
Likewise, recent changes to Government Code 65852.2 enable landowners to easily build accessory dwelling units and junior accessory dwelling units with both single-family and multi-family residences.
However, both the Report and the EPS Assessment completely ignore these new provisions, without any explanation. As of 2010, the City had a total of 13,528 housing units. If just a fifth of these households took advantage of the new laws and built either an accessory dwelling unit or duplex by 2040, the City could build over 2,700 units, enough to meet the highest RHNA projections provided by EPS, without even taking into account the other development sites missed by the City’s analysis, as documented in the Proponent’s report. These additional units would blend in with existing residential 4 See SB 9 Senate Floor Analyses, August 28, 2021.
City of Watsonville City Council
March 7, 2022
neighborhoods and provide much needed housing and economic growth. It is inconceivable why the Report and the EPS Assessment failed to look at these new potential units, other than to provide a skewed result that falsely shows the Measure will prevent development of needed housing. The City Council must reject the Report in response to this egregious error. See Gov. Code § 54964(c) (city information about ballot measure must be accurate).
Thank you for your consideration.
Very truly yours,
SHUTE, MIHALY & WEINBERGER LLP
Sara A. Clark
1480464.2
Watsonville Planned Growth
and Farmland Protection
Initiative
An Economic and Planning Analysis
CA Election Code §9212
• §9212(a) During the circulation of the petition, or before taking either action described in subdivisions (a) and (b) of Section 9215, the legislative body may refer the proposed initiative measure to a city agency or agencies for a report on any or all of the following:
• Election Code §9212 Focus Areas in City Report:
(1) Its fiscal impact.
(3) Its effect on the use of land, the impact on the availability and location of housing, and the ability of the city to meet its regional housing needs.
(4) Its impact on funding for infrastructure of all types, including, but not limited to, transportation, schools, parks, and open space. The report may also discuss whether the measure would be likely to result in increased infrastructure costs or savings, including the costs of infrastructure maintenance, to current residents and businesses. (6) Its impact on the uses of vacant parcels of land.
Background
Background
November 5, 2002
Watsonville Urban Limit Line
and Development Timing
Initiative (Measure U)
approved by a majority of
the registered voters of the
City of Watsonville.
March 14, 2000
City Council approves a
Memorandum of
Understanding (MOU)
between the County of Santa
Cruz, the City of Watsonville,
and the California Coastal
Commission.
2000 Page 790 of 870 2002
What Was Measure U?
• Measure U was the product of a yearlong community visioning process undertaken by Action Pajaro Valley (APV), a nonprofit that brought together government leaders, farming companies, environmentalists, and business owners to create a long-term plan of how Watsonville could grow and meet the challenges facing the City at the time.
• Extensive public input
• Focus on planning, phasing,
and process
• No specific residential or
economic development targets
Measure U – Urban Limit Line
20-Year
ULL
20-Year
ULL
25-Year
ULL
Westerly
ULL
Measure U – Planning
Area Map
Analysis of Measure U
• Purpose Statement from Measure U
“Promote continued economic development and efficient urban growth while sustaining and enhancing the agricultural economy.”
• Economic Development = Jobs
• Urban Growth = Housing
• Sustaining Agricultural Economy = Preservation of Farmland Key Questions:
1. What economic development and urban growth outcomes can be directly attributed to Measure U?
2. What specific measurable data can be collected and analyzed?
3. How did economic development and urban growth occur under Measure U based on those metrics?
Analysis of Measure U
1. Identify where farmland has been developed for
non-agricultural uses both inside and outside of
the ULL established under Measure U
2. Identify residential and economic growth targets
for the growth areas identified in Measure U,
including:
• Atkinson Lane Specific Plan
• Manabe-Ow Business Park Specific Plan
• 2030 General Plan Update
3. Quantify residential and economic development
that has occurred in those targeted growth areas
Measure U Outcomes – Protection of Farmland
• Farmland west of Highway 1 already protected under MOU • Measure U added an additional backstop to the MOU. This provision has never been implemented because the MOU
remains in effect and does not have an expiration date. • Under Measure U, the only farmlands that were developed were in Area B – Atkinson Lane, Area E – “Villages,” Area F – Manabe/Burgstrom.
• No other farmland adjacent to the ULL has been annexed or developed.
Measure U Outcomes – Housing
• Citing the need for more housing, and specifically more affordable housing, Measure U identified how housing
development could be permitted in specific areas
inside the ULL. Those areas included:
1. Area A – Buena Vista, 3 Phases with Specific Plan(s)
2. Area B – Atkinson Lane, Specific Plan required, 50%
Affordable
3. Area E – The Villages, Senior Housing
4. Area F – Manabe/Burgstrom, Industr. + Workforce
Housing
Measure U Outcomes – Housing
Housing Units Created in Measure U Growth Areas
Projected
Housing Units
Units
Developed
Total Units
Approved/Developed
% of
Projected
Area A – Buena Vista 1,300 0 0 0%
Area B – Atkinson
Lane 450 46 46 10%
Area E – The
“Villages” N/A 74 74 N/A
Area G – Manabe
Ow Specific Plan 100 0 87 87%
Housing Total 1,850 46 207 11%
Measure U Outcomes – Jobs
• The Action Pajaro Valley compromise identified the Area G – Manabe/Burgstrom (now Manabe-Ow) annexation area as
having the greatest potential to provide future job creation. • In 2010, the City approved the Manabe-Ow Business Park Specific Plan, which identified the area as being able to produce 2,100 jobs and up to 100 units of workforce housing. • In 2015, the first development within the specific plan area, the FedEx distribution facility, was approved. The facility provided approximately 200 jobs. Two additional project applications could provide approximately 200 additional jobs.
Measure U Outcomes – Jobs
Jobs Created in Measure U Growth Areas
Projected Jobs Jobs
Created
Pending
Project Job
Total
% of
Target
Area A – Buena Vista 200 0 0 0%
Area B – Atkinson Lane 90 0 0 0%
Area G – Manabe Ow
Specific Plan 2,100 ~200 ~400 19%
Total Jobs 2,390 ~200 ~400 17%
Summary of Measure U Outcomes
• Minimal development has occurred on farmland inside of the ULL over the last 20 years.
• No development has occurred on farmland outside of the ULL over the last 20 years.
• The residential and economic growth areas identified in Measure U have provided minimal residential and economic growth in relation to planning targets developed for those areas.
11% of planning target 17% of job target
Watsonville Planned Growth and Farmland Protection
Initiative - 2021
• Purpose - “To promote stability in long-term planning for the City of Watsonville by extending key features of…Measure U, which added cornerstone policies within the General Plan that establish geographic limits for long-term development while allowing sufficient flexibility within those limits to respond to the City’s changing needs over time.”
• Process:
• Minimal public input
• Limited stakeholders
• No community visioning process
Summary – ULL Initiative
Three main differences from Measure U:
1. Extends ULL to 2040
2. Removes phasing and specific plan requirements
3. Adds exception allowing ULL modifications without a
vote of the people if they are for the provision of
housing
ULL Initiative Assumptions:
• Measure U succeeded in achieving its economic
development and urban growth goals
• An extension of the Urban Limit Line would provide
sufficient capacity to accommodate the City's
regional housing needs allocation and to meet state
housing law goals
• The backstop of the MOU prohibiting
annexations/development West of the Western ULL is
necessary
Watsonville Planned Growth and Farmland Protection Initiative – 2021 – Measure U vs. ULL Initiative
Segment 1
Segment 2
Segment 3
Segment 1
Watsonville Planned Growth and Farmland Protection
Initiative – 2021 – Findings
• The Initiative includes ten findings, which lay out the rationale for extending the ULL. The key elements of those findings include:
1. Measure U and the ULL were successful in achieving their goals related to economic development and urban growth.
2. Measure U has encouraged efficient growth patterns and protected quality of life in Watsonville by concentrating future development largely within or adjacent to existing developed areas.
3. The Initiative will promote stability in long-term planning for the City of Watsonville by designating appropriate geographical areas for urban development over the next 18 years.
4. The land within the Urban Limit Line provides sufficient capacity to accommodate the City's regional housing needs allocation and to meet state housing law goals.
EPS Analysis
• The City engaged Economic & Planning Systems
(EPS) to assist with evaluating the impact of
Measure U renewal.
• EPS provided technical analysis and advisory related to study design, housing demand analysis, land supply analysis, and economic and fiscal impact considerations.
• The City/EPS methodology evaluates a range of demand forecasts relative to vacant land supply within the city, and also considers potential land supply of future growth areas that would be restricted with renewal of the ULL.
• EPS coordinated with City staff and interviewed leadership within the Police Department, Fire Department, and Public Works Department to inform qualitative findings concerning fiscal impact.
Watsonville Planned Growth and Farmland Protection Initiative – 2021 – EPS Analysis
Key Findings from Economic & Planning
Systems (EPS) analysis:
Observed Outcomes:
1. While the ULL has restricted development
of prime farmland and environmentally
sensitive open space, minimal new
development has occurred in growth
areas defined by the measure.
Research & Analysis:
1. A range of public- and private-sector
housing demand projections as well as
policy goals for new housing reveal
significant variation in potential future
housing development in Watsonville.
2. Analysis reveals that renewal of the ULL
likely will cause a land supply constraint.
3. Allowing development in currently
restricted, new strategic growth areas
creates new land supply to meet housing
demand forecasts.
4. Even if new strategic growth areas are
opened for development, land supply
constraints will continue to affect the City’s
ability to meet policy goals for housing
development.
Analysis of Infill Potential
• Staff conducted
an analysis of
every vacant
parcel located
within city limits
• 147 vacant
parcels identified
• Red parcels were
deemed
‘undevelopable’
for residential
units based on a
number of
factors.
Analysis of Infill Potential
• Yellow parcels were
deemed ‘potentially
developable.’
• Green parcels are
developable today.
• The green and
yellow parcels
combined (17.55
acres) could
accommodate
approximately 281
residential units at 16
du/acre.
Fiscal & Economic Impact Considerations:
1. New development in Watsonville, whether infill
within the City limits or development of new
strategic areas at the City’s edge, will have onetime infrastructure improvement requirements.
2. Population growth increases service burdens and
department costs under any growth pattern
scenario.
3. Creating strategic growth areas at the urban
edge could support new economic development
opportunities, including a potential visitor-serving
development at the intersection of Highway 1
and State Route 129.
Strategic Growth Areas
• Based on the analysis by EPS and staff, two farmland areas outside of the existing ULL were identified for potential residential and economic developed if Measure U were to expire, including a small portion of Area C (77 acres) and the Redman House parcel (13.6 acres).
Area C
(Residential Development)
Redman House Parcel
(Economic Development)
Protection of Wetlands
• All wetlands inside the city limits are zoned “Environmental Management-Open Space” (EM-OS).
• No wetlands located in Area A, Area C, Area D, or the Redman House parcel. • Any environmentally sensitive habitat in a potential annexation areas would be identified in the California Environmental Quality Act (CEQA) analysis for proposed development projects and zoned EM-OS upon annexation. • In addition, wetlands are regulated/protected by the following state and federal agencies:
• California Coastal Commission
• US Environmental Protection Agency
• US Army Corps of Engineers
• State Water Resources Control Board
• Central Coast Regional Water Quality Control
Board
• California Department of Fish and Wildlife
• County of Santa Cruz
Measure U Outcomes – Protection of Wetlands
Wetland Areas General Plan Environmental Management Areas
Summary - Economic & Planning Analysis
11% 17%
Growth areas provided minimal
residential & economic development.
Wetlands are already
protected.
The ULL Initiative would create a land
supply constraint.
The ULL Initiative would prohibit the
creation of additional strategic economic
development opportunity areas. Page 815 of 870
3/3/2022 10:56:46 PM
C:\Program Files\eSCRIBE\TEMP\22564429434\22564429434,,,Planned Growth and Farmland Protections Initiative Election - Report.docx Agenda Report
MEETING DATE: Tuesday, March 8, 2022
TO: City Council
FROM: CITY CLERK VÁZQUEZ FLORES
CITY ATTORNEY ZUTLER
SUBJECT: WATSONVILLE PLANNED GROWTH AND FARMLAND
PROTECTION INITIATIVE
STATEMENT OF ISSUES:
The City Council is required by California Elections Code Section 9215 to either adopt the ordinance or to call an election for the petition entitled Watsonville Planned Growth & Farmland Protection Initiative Petition.
RECOMMENDED ACTION:
It is recommended that the City Council do one of the following:
Adopt a Resolution Ordering Submittal of Measure to Amend the Watsonville 2005 General Plan to Impose Certain Restrictions on Subsequent Amendments as Provided in the Watsonville Planned Growth and Farmland Protection Initiative on the June 7, 2022, General Election
OR
Adopt a Resolution Ordering to Submit a Measure to Amend the Watsonville 2005 General Plan to Impose Certain Restrictions on Subsequent Amendments as Provided in the Watsonville Planned Growth and Farmland Protection Initiative on the November 8, 2022, General Municipal Election
BACKGROUND:
On June 3, 2021, Amy Newell, Betty Bobeda, and Peter Navarro filed a Notice of Intent to Circulate a Petition to amend the City of Watsonville General Plan, primarily to the City’s Urban Limit Line (ULL), set by Measure U, approved by the voters in 2002. The initiative as proposed would prevent changes to the ULL, as established by the former Measure U, through the year 2040.
The proponents submitted the required signatures on December 13, 2022. The sufficiency of the petition was confirmed by Santa Cruz County Clerk, Tricia Webber, on January 19, 2022, certifying the petition was sufficient with 2,411(10%) valid signatures.
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C:\Program Files\eSCRIBE\TEMP\22564429434\22564429434,,,Planned Growth and Farmland Protections Initiative Election - Report.docx On February 8, 2022, pursuant to California Elections Code Section 9114, the Council accepted the City Clerk’s certification of the examination of the results. The Council also ordered a report pursuant to California Elections Code Section 9212 to analyze the impacts of the proposed measure on the City. The Council will receive the results of the report at this meeting.
DISCUSSION:
The Council may place the ballot measure on the June 7 or November 8, 2022, ballots. To place the measure on the June 7 ballot, the Council would need to call a special election, which would be consolidated with the statewide primary election.
June Election
Elections Code 1405(b) allows the City to call a special election for “the purpose of submitting an initiative measure to the voters before the date on which the initiative measure would appear on the ballot pursuant to subdivision (a),” so long as the special election is between 88 and 103 days after the order of the election. The June 7 election falls within that window; therefore, the Council could call a special election in June. The last day to place a measure on the June ballot it March 11.
Arguments in favor and opposition to measures on the June ballot are due March 18. EC 9282 permits the persons filing an initiative petition to file a written argument in favor of the measure, and the Council to submit an argument against the measure. If the Council wishes to prepare the opposition argument, it has the following options: 1) appoint a subcommittee to prepare the argument; or 2) the full Council could prepare the argument at a Council meeting prior to March 18.
November Election
Elections Code § 1405(a) requires the City to hold an election for certified initiatives at the “jurisdiction’s next general election occurring not less than 88 days after the date of the order of election.” The Charter of the City of Watsonville states that municipal general elections are held in November, and any non-November elections are “special elections.” (Charter §§ 1300, 1301.) Since the next general election is in November, Section 1405 requires the City place the measure on the November ballot.
For the November election, arguments in favor and opposition to measures are due August 19, 2022. If the Council wishes the place the measure on the November ballot, staff will return to Council prior to August 19 to seek direction regarding the opposition argument.
STRATEGIC PLAN:
Extending the Urban Limit Line established by Measure U, approved by the voters, would affect available land for development and expansion, ultimately affecting each Strategic Plan Goal: 1-Housing, 2-Fiscal Health, 3-Infrastructure & Environment, 4-Economic Development, 5-Community Engagement & Well-Being, 6-Public Safety, 7-Efficient and High Performing Government.
FINANCIAL IMPACT:
The Council has already approved $80,000 for the November 8, 2022, municipal election. No additional cost would be incurred with the addition of the measure to the ballot.
3/3/2022 10:56:46 PM
C:\Program Files\eSCRIBE\TEMP\22564429434\22564429434,,,Planned Growth and Farmland Protections Initiative Election - Report.docx If the Council choses to order the election for June, the Council would need to authorize a budget appropriation at its next Council meeting. The cost of the June election is estimated at $3-6 per voter. Currently there are 21,854 registered voters in the City of Watsonville; therefore, the cost would range from $65,562 to $131,124.
ALTERNATIVE ACTION:
The City Council could adopt the ordinance without alteration pursuant to Elections Code Subsection 9215(a). If the Council wishes to adopt the ordinance, the City will need to perform a CEQA analysis on the ordinance. To comply with the requirements of Section 9215, the CEQA analysis must be performed within ten days. The City would thus need to hold a special meeting before March 18 to adopt the CEQA analysis and the ordinance.
ATTACHMENTS AND/OR REFERENCES:
None
RESOLUTION NO. (CM)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WATSONVILLE ORDERING THE SUBMISSION TO THE QUALIFIED
ELECTORS OF THE CITY A MEASURE TO AMEND THE
WATSONVILLE 2005 GENERAL PLAN TO IMPOSE CERTAIN
RESTRICTIONS ON SUBSEQUENT AMENDMENTS AS PROVIDED IN
THE WATSONVILLE PLANNED GROWTH AND FARMLAND
PROTECTION INITIATIVE; REQUESTING THE BOARD OF
SUPERVISORS OF THE COUNTY OF SANTA CRUZ TO CONSOLIDATE
THE SPECIAL ELECTION REGARDING THE INITIATIVE WITH THE
JUNE 7, 2022, GENERAL ELECTION AND TO PERMIT THE SANTA
CRUZ COUNTY DEPARTMENT OF ELECTIONS TO CONDUCT SAID
ELECTION; DIRECTING THE CITY CLERK TO TAKE ALL NECESSARY
ACTIONS AND COORDINATE WITH THE COUNTY OF SANTA CRUZ
TO ENSURE PLACEMENT OF THE INITIATIVE ON THE JUNE 7, 2022 BALLOT; AUTHORIZING THE CITY MANAGER TO REIMBURSE THE
COUNTY OF SANTA CRUZ FOR COSTS TO CONDUCT THE
ELECTION; AUTHORIZING ARGUMENT AND REBUTTAL ARGUMENT
FOR AND AGAINST THE INITIATIVE; AND DIRECTING THE CITY
ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS
WHEREAS, the County of Santa Cruz will be conducting a Statewide Primary Election on June 7, 2022; and
WHEREAS, an initiative measure, entitled the Watsonville Planned Growth and Farmland Protection Initiative (“Initiative”) has been circulated for placement on the ballot in the City; and
WHEREAS, the signed initiative petition sections have been submitted, and the City Clerk, with the assistance of the Santa Cruz County Department of Elections, has examined the records of registration and ascertained that the petition is signed by the requisite number of voters to qualify for the ballot, and has so certified; and
WHEREAS, pursuant to Elections Code Section 9215, the City Council ordered an Elections Code Section 9212 Report of the proposed measure’s impacts of the City at its meeting on February 8, 2022; and
WHEREAS, the City Council is authorized and directed by Elections Code Section 9215 to submit the Initiative to the voters; and WHEREAS, the City Council of the City of Watsonville desires to call a Special Election on Tuesday, June 7, 2022 for the purpose of submitting the Initiative to the qualified voters of the City of Watsonville; and
WHEREAS, pursuant to Elections Code Section 10002, the governing body of any city or district may by resolution request the Board of Supervisors of the county to permit the county elections official to render specified services to the city or district relating to the conduct of an election, subject to the city or district reimbursing the county in full for the services performed upon presentation of a bill to the city or district; and
WHEREAS, pursuant to Elections Code Section 10400, whenever two or more elections, including bond elections, of any legislative or congressional district, public district, city, county, or other political subdivision are called to be held on the same day, in the same territory, or in territory that is in part the same, they may be consolidated upon the order of the governing body or bodies or officer or officers calling the elections; and
WHEREAS, pursuant to Elections Code Section 10403, whenever an election called by a district, city or other political subdivision for the submission of any question, proposition, or office to be filled is to be consolidated with a statewide election, and the question, proposition, or office to be filled is to appear upon the same ballot as that provided for that statewide election, the district, city or other political subdivision shall, at least 88 days prior to the date of the election, file with the board of supervisors, and a copy with the elections official, a resolution of its governing board requesting the
consolidation, and setting forth the exact form of any question, proposition, or office to be voted upon at the election, as it is to appear on the ballot. Upon such request, the Board of Supervisors may order the consolidation. The resolution requesting the consolidation shall be adopted and filed at the same time as the adoption of the ordinance, resolution, or order calling the election.
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF WATSONVILLE DOES HEREBY DETERMINE AS FOLLOWS:
SECTION 1. Pursuant to Elections Code Sections 9215 and 1405, the City Council hereby calls for a special election at which it shall submit to the qualified voters of the City a measure, that if approved by the majority of voters voting in the election, would amend provisions of the Watsonville General Plan as provided in the Watsonville Planned Growth and Farmland Protection Initiative (“Initiative”), attached hereto as Exhibit A. The election shall be held in the City on June 7, 2022.
SECTION 2. Pursuant to Elections Code Sections 10400 and 10403, the City Council hereby orders a special election be called and consolidated with any and all elections also called to be held on June 7, 2022 within the same territory. Further, pursuant to Elections Code Section 10002, the City Council hereby requests the Board of Supervisors of the County of Santa Cruz to consolidate the election regarding the Initiative with the June 7, 2022 statewide primary election and to permit the Santa Cruz County Elections Department to provide any and all services necessary for conducting an election regarding the Initiative. The County of Santa Cruz and its staff are authorized and instructed to procure and furnish any and all official ballots, notices, printed matter and all supplies and equipment and other necessary items in order to properly and lawfully conduct the election; the County of Santa Cruz is authorized to canvass the returns of the
election, which shall be held in all respects as if there were only one election, and only one form of ballot shall be used; and the City Council recognizes that additional cost will be incurred by the County of Santa Cruz by reason of the consolidation of the election regarding the Initiative with the Statewide election and agrees to reimburse the County of Santa Cruz for any costs that are not reimbursed by the State, and the City Council hereby authorizes the City Manager to pay the County of Santa Cruz for said services in full.
SECTION 3. The City Council hereby orders the City Clerk and the Santa Cruz County Department of Elections to submit the following question to the electorate at the June 7, 2022 election:
Ballot Question:
Shall the City of Watsonville amend provisions of the Watsonville General Plan as provided in the Watsonville Planned Growth and Farmland Protection Initiative? Yes ______ No _______
SECTION 4. The City Council hereby orders that the Santa Cruz County Department of Elections print the full text of the Initiative attached hereto as Exhibit A exactly as filed or indicated on the filed document in the voter information guide for the June 7, 2022 election.
SECTION 5. The City Council hereby directs the City Clerk to (i) publish a notice of elections and synopsis of the measure as required by Elections Code Section 12111; (ii) file certified copies of this resolution, including the Initiative, with the County of Santa Cruz and take other necessary actions to ensure the placement of the Initiative on the June 7, 2022 ballot; and (iii) coordinate with the County of Santa Cruz and take all
necessary actions to oversee and certify the June 7, 2022 election process as required by the Elections Code.
SECTION 6. In accordance with California Elections Code Section 9280, the City Council directs the City Clerk to transmit a copy of the Initiative to the City Attorney, who shall prepare an impartial analysis showing the effect of the Initiative on the existing law and the operation of the Initiative; the City Attorney’s impartial analysis may not exceed 500 words and shall be filed with the City Clerk no later than 5:00 p.m. on March 18, 2022.
SECTION 7. In accordance with Elections Code Section 9282, the City Council of the City of Watsonville, or its designee(s) as assigned at the City Council meeting, is authorized to file a written argument against the Initiative, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California and to change the argument until and including the date fixed by the City Clerk set forth below after which no arguments for or against the Ordinance may be submitted to the City Clerk.
SECTION 8. In accordance with California Elections Code Section 9282, arguments in favor and against, not exceeding 300 words, shall be filed with the City Clerk no later than 5:00 p.m. on March 18, 2022, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument.
SECTION 9. California Elections Code Section 9285 authorizes the City Council to adopt provisions for the filing of rebuttal arguments at municipal elections; accordingly, when the City Clerk has selected the argument for and against the Initiative which will be printed and distributed to the voters, the City Clerk shall send a copy of the argument in favor of the Initiative to the authors of the argument against, and a copy of the argument
against to the authors of the argument in favor of the Initiative immediately upon receiving the arguments. The authors may prepare and submit rebuttal arguments not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. The rebuttal arguments shall be filed no later than 5:00 p.m. on March 25, 2022, accompanied by the printed names and signatures of the persons submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers. Rebuttal arguments shall be printed in the same manner as the direct arguments, and rebuttal argument shall immediately follow the direct argument which it seeks to rebut.
SECTION 10. All previous resolutions providing for the filing of rebuttal arguments for City measures are hereby repealed and the provisions of this resolution providing for the filing of rebuttal arguments regarding the Initiative Ordinance shall only apply to the election to be held on June 7, 2022, and shall thereafter be repealed.
SECTION 11. The notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give further or additional notice of the election, in time, form and manner as required by law.
SECTION 12. For purposes of the California Environmental Quality Act (Public Resources Code Section 21000, et seq.), a “project” is defined in State CEQA Guidelines Section 15378 (a) as “the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment,” but excludes “the submittal of proposals to a vote of the people of . . . a particular community that that not involve a public agency sponsored initiative.” (14 CCR 1378(b)(3); Stein v. City of Santa Monica (1980) 110 Cal. App. 3d 458; Friends of Sierra Madre v. City of Sierra Madre (2011) 25 Cal. 4th 165.) The City
Council hereby finds that, as a citizen-sponsored initiative, this Initiative is exempt from CEQA under CEQA Guidelines Section 15378(b)(3).
SECTION 13. In all particulars not recited in this resolution, the election shall be held and conducted as provided by the City of Watsonville Charter and other law for holding municipal elections.
SECTION 14. This Resolution shall take effect upon its adoption. ************************************