Federal Budget 2016, Sprawling Edmonton, Riverview Name Debate

Here’s the latest entry in my Edmonton Etcetera series, in which I share some thoughts on a few topical items in one post. Less than I’d write in a full post on each, but more than I’d include in Edmonton Notes. Have feedback? Let me know!

Federal Budget 2016

The Government of Canada introduced Budget 2016 today, saying it is “a plan that takes important steps to revitalize the Canadian economy, and delivers real change for the middle class and those working hard to join it.” The budget projects a $29.4 billion deficit. Here’s a video titled Restoring Hope for the Middle Class that highlights some of the budget commitments:

The Federation of Canadian Municipalities (FCM) called the budget “a big win for Canadians” and says it will “transform the way we build cities and communities and marks a new era of federal-municipal partnership.” They like the investments the government is making in housing, transit, and green infrastructure, as well as the “new cost-sharing funding model” that will have a shorter-term impact while longer-term funding agreements are worked out.

Mayor Don Iveson is the Chair of FCM’s Big City Mayors’ Caucus. Here’s what he had to say:

“This budget and the new, stronger working relationship between the federal government and municipalities really marks a new way of getting things done for Canadians. This introduces a new era of collaboration which will see us build stronger cities and a stronger Canada.”

The budget outlines a five-year, $11.9 billion infrastructure spending plan. There’s a focus on public transit, with $3.4 billion over three years being invested according to each province’s share of national ridership. For Alberta, with 10.28% of Canada’s public transit ridership, that works out to just over $347 million. There’s also an increase in eligible costs for public transit projects up to 50% which is a big improvement. Another $2.3 billion of the infrastructure plan will go to affordable housing over two years, $739 million of which is for investments in housing for First Nations, Inuit, and Norther Communities. About $112 million of the affordable housing allocation is to help cities tackle homelessness.

Budget 2016 extends EI regular benefits by 5 weeks, but only in three of Alberta’s four EI regions – not in Edmonton. That’s because we did not experience a large enough increase in our unemployment rate between March 2015 and February 2016. Provincially the changes could be worth about $380 million.

Like all cities, Edmonton faces major challenges around the maintenance and replacement of aging infrastructure. Budget 2016 includes funding of $50 million for infrastructure management and measurement, which should help cities collect the data required to inform decision-making. Getting a better handle on the project will be a good thing.

Sprawling Edmonton

As mentioned a couple of days ago, Council is revisiting the discussion about sprawl in our city thanks to a report that projects the City will face a $1.4 billion shortfall after building out the three Urban Growth Areas. On top of this, another $8.3 billion in non-residential assessment growth is needed to maintain the current ratio of residential to non-residential tax assessment. That’s the real reason the City is pursuing annexation, though you won’t find it in the “three reasons for annexation”.

Edmonton from Above
Edmonton from Above, photo by Dave Cournoyer

In an editorial this week, the Journal wrote:

“Now is not the time to add to chills in the development industry, but the status quo is not a good option either.”

We need to stop worrying about the development industry and worry instead about Edmonton. Mayor Iveson put it like this in a recent blog post:

“This is a critical conversation happening in cities all across Canada; I intentionally use the word ‘critical’ because Edmonton is simply not financially sustainable under our current growth model.”

The word “sprawl” is carefully avoided in both the editorial and the mayor’s post. But that’s what it is.

Riverview Name Debate

One of the three Urban Growth Areas is Riverview, where planning for neighbourhoods is well underway. Names were proposed for five neighbourhoods, and both the developers and the Naming Committee agreed on two: Grandisle and White Birch. The other three names proposed were “The Uplands”, “Red Willow”, and “River’s Edge” but the Naming Committee went with “Balsam Woods”, “Golden Willow”, and “River Alder” instead. The developers appealed, which is how the issue came before Council today.

Paula Simons wrote about the issue with her signature brand of wit:

“If the developer’s chosen names are poor, the city’s aren’t much better. Balsam Wood sounds like something you use to build model airplanes. River Alder doesn’t trip off the tongue and west Edmonton already has an Aldergrove. It’s hard to take sides in this fight when both sets of names are so depressingly bland.”

We already have The Uplands of Mactaggart too.

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Today, after an amusing debate, Council approved the developers’ proposed names. In discussing the importance of names, Councillor Loken said:

“If someone doesn’t like the name of a neighbourhood, they’re probably not going to live there…But Red Willow, Golden Willow? I don’t know.”

Maybe that’s how we can solve our sprawl problem!

Horse Hill ASP: More proof that Edmonton is addicted to sprawl

The proposed Horse Hill Area Structure Plan (ASP) will be debated at a special public hearing on Monday and Tuesday. Known as bylaw 16353, the Horse Hill ASP outlines a development framework for the area east of the Edmonton Energy & Technology Park (EETP). It encompasses roughly 2,806 hectares of land and barely meets the density target of the Capital Region Growth Plan with a proposed density of 31 units per net residential hectare based on a proposed population of about 71,000 people. Proponents would like to see the area developed over the next 30-40 years.

 
Horse Hill ASP, click for a larger version

There are many people opposed to the plan, including over 2100 who have signed an online petition asking Council to “get full information about the true costs and benefits of this current plan and alternative development scenarios”. Some are concerned with the loss of agricultural land, and others are concerned with the unsustainable sprawl of our city. I expect we’ll hear a lot from those perspectives during the public hearing. I wrote about this battle last July and I would encourage you to read or re-read that post for background.

After the public hearing has completed, the bylaw will be ready for first and second reading. Third reading will take place after the Capital Region Board has given its approval of the plan. It’s important to remember where we are in the larger process:

An ASP is a relatively high-level document. It contains more detail than the Municipal Development Plan, but less than the Neighbourhood Structure Plans (NSP). The Horse Hill ASP proposes five neighbourhoods, each of which would require an NSP.

The Horse Hill ASP falls into the Northeast Urban Growth Area, one of three identified in the Municipal Development Plan. Preparation of ASPs for these areas was authorized along with the MDP, but approval was dependent on Council accepting the Growth Coordination Strategy (GCS), the Integrated Infrastructure Management Plan (IIMP), and the City-Wide Food and Agriculture Strategy. Technically all three documents were approved in 2012, but they were not received without criticism. I wrote about some of my concerns with the documents here, here, and here. Furthermore, it’s hard to swallow that the Horse Hill ASP has been developed in adherence with those plans, considering that the Growth Coordination Committee and the Annual Growth Monitoring Report do not yet exist. Both were identified as key methods by which the GCS would be implemented.

At 135 pages, the bylaw, application, and supporting documentation for the Horse Hill ASP contains lots of information (PDF, 15.8 MB). I have slowly been digesting it, and I was particularly interested in the IIMP document that was included as attachment 2c (on pages 113-135). This is the first time such a document has been prepared for Council’s consideration.

From the background section of the IIMP:

The challenges facing the City are to balance development costs with the strategic benefits of sustainable growth, to achieve an appropriate balance of residential to commercial/industrial development. Although the City of Edmonton has achieved some success in diversifying its revenue base, property tax remains the largest component of City revenue.

The IIMP estimates that roughly $2.5 billion worth of infrastructure will need to be built, with developers contributing 66% and the City contributing 34%. The GCS reminds us however that “the City assumes ownership of developer funded infrastructure, generally two years after construction, and is responsible for ongoing maintenance, periodic rehabilitation, and eventual replacement.”

To estimate revenue and expenditures, the IIMP considers two scenarios. The first uses demographic projections from 2008 and assumes that only 52% of the population is achieved within 50 years. The second uses demographic projections from 2012 and assumes that the full population is achieved within 35 years.

Here’s the revenue vs. expenditures for the first scenario:

Here’s the revenue vs. expenditures for the second scenario:

The first takeaway is that new neighbourhoods do not pay for themselves, even (and especially) in the long-run. The IIMP notes that in comparison those charts “seem to contradict the general theory that a faster build-out time would result in a better cost recovery ratio.” It goes on to attribute this paradox to “the timing of certain large capital assets.”

What follows those two charts is a discussion about the balance of residential and non-residential land throughout the city. The IIMP notes that non-residential assessment makes up approximately 25% of the total tax base of the City.

How does the proposed development affect this balance? Generally, residential neighbourhoods have less than 25% of their assessment base as non-residential, and the proposed Horse Hill Area Structure Plan is projected to have 4.3% of its assessment as non-residential. So as the City grows this and other residential areas, it must also grow its non-residential areas to maintain balanced growth.

Incredibly, the IIMP then provides updated versions of the two charts above that “illustrate the importance of balanced growth and the benefit of maintaining the current non-residential assessment ratio.” The estimated revenue is combined with “off-site commercial assessment” to paint a much rosier picture of how we can afford to build out the plan as proposed.

Here’s the updated chart for the first scenario:

And here’s the updated chart for the second scenario:

The IIMP states:

The premise in these figures is that if the City maintains its current balance of 25% non-residential assessment, by developing commercial areas throughout the City, this additional revenue helps to offset the fiscal imbalance indicated by looking at the Horse Hill ASP by itself.

So we need to continue building commercial areas like the EETP to prevent residential taxes from going up dramatically. But to support those commercial areas we need to build new residential areas like the one proposed by the Horse Hill ASP. But to pay for those new residential neighbourhoods, we need to construct still more commercial areas. It’s a vicious cycle.

In other words, we’re addicted to sprawl.

The worst part is that we know this and yet we continually fail to do anything about it. From the MDP:

The Municipal Development Plan proposes a new direction for growth and it will take time to effect change. The Plan is a long term strategy and will require incremental decisions that support our commitment to saying “yes” to the things we want and need and “no” to the things that do not advance our City Vision and goals.

So far we’ve said “yes” to eight NSPs that were supposed to wait for the GCS and other documents, “yes” to a dramatically scaled back Growth Coordination Strategy, “yes” to a Food & Agriculture Strategy that lacks teeth, and we’ll likely say “yes” to the Horse Hill ASP.

We’re addicted to sprawl and we just can’t seem to say “no”.