Continued Growth

That’s the tagline the City of Regina has chosen to articulate its philosophy  with respect to the 2014-15 budget. To take advantage of the “many opportunities that lie before us”, Mayor Michael Fougere noted in a press release, council will consider a seven per cent tax increase at a special budget meeting on Feb. 24 at City Hall at 5:30 p.m.

The seven per cent hike includes a general tax increase of six per cent plus a special one per cent tax to put a dent in the estimated backlog of $261 million in much needed repairs to the residential road network that were identified in a city report in November. The tax increase, says Fougere, will help the city “[meet] the needs of our growing community by investing in new and existing infrastructure that supports growth.”

That’s nice, I guess. But the type of growth that’s being supported is the same type of growth that’s been occurring since the 1950s — namely, low density, vehicle dependent and suburban. In fact, in the Leader-Post on Saturday,  Stu Niebergall of the Regina & Region Home Builders Association had another op-ed where he drew a direct link between sustainable urban planning practices to boost density and reduce sprawl and housing affordability.

His conclusion:

Our municipal policy-makers and City Council must always be cognizant of and working toward the objective of ensuring that the City of Regina continues to grow so that our citizens have a diversity of real housing options, in the neighbourhoods that best fit their lifestyle and choices. There is no place for restrictive land policies in achieving this outcome.   

Left unexamined in Niebergall’s affordability equation is the cost to provide city services in all these new neighbourhoods. Contrary to what developers maintain, growth does not pay for growth. Development fees may pay for the initial installation of basic infrastructure in new neighbourhoods, but after that the city’s on the hook for providing services and looking after repairs and upgrades in subsequent years.

Seven per cent is the cost this year — and we’ll be facing increases of this scale for many years to come, I suspect, because even now we’re just scratching the surface of our infrastructure deficit.

If anyone wishes to appear before council to make a presentation on the budget they have until Feb. 19 to file a written submission at the City Clerk’s office.

Author: Gregory Beatty

Greg Beatty is a crime-fighting shapeshifter who hatched from a mutagenic egg many decades ago. He likes sunny days, puppies and antique shoes. His favourite colour is not visible to your puny human eyes. He refuses to write a bio for this website and if that means Whitworth writes one for him, so be it.

22 thoughts on “Continued Growth”

  1. I for one am eager to help people fulfill their McMansion dreams on the far edges of the city. Who am I to deny some overextended public servant the chance to look at empty fields from his or her living room window?

  2. Housing is not really my bailiwick, so I don’t have a lot of substance to say about Niebergall’s Op-Ed. However, that’s rarely stopped me before, so here I go:

    Niebergall makes the same hand-wavy argument about housing affordability’s impact on standard of living that appears in Demographia’s original report. While the argument appears reasonable at first, it asks for the question: if the impact is really so great, why do severely unaffordable housing markets like Vancouver, Melbourne, Auckland and Sydney (among others) consistently appear toward the top of international quality of life surveys?

    Niebergall makes the argument that overly restrictive development policies are the cause of high unaffordability by using Vancouver as his single example. It ignores unique challenges Vancouver face that make it a far from typical example. The Lower Mainland region is bounded on three sides by hard geographical and political barriers: The ocean to the west, mountains to the north, and the US border to the south. The City of Vancouver itself is surrounded by large, politically powerful abutting suburbs. It is impossible for Vancouver to reduce housing prices by expanding outward, regardless of their land-use regulations. Vancouver already has four times the population density of Regina. To imply in any way that Regina is in danger of becoming the next Vancouver because of land-use policies is silly. A proper argument about the effects of land-use regulations on housing affordability requires a proper study of many markets, preferably including cities a little more Regina-like than Vancouver.

    Even if land-use policies do effect housing affordability (and I suspect they probably do, if not as much as Demographia would have you believe), it is still exclusively looking at and overemphasizing one facet of a complex issue. In addition to lefty concerns like the environment, there are real impacts of sprawl on quality of life and Regina’s future. As Greg pointed out, the infrastructure to support these communities will quickly start adding to our already frightening infrastructure deficit. Proponents of sustainable communities have catalogued a large number of benefits, many backed by proper comparative studies. Here’s a thing from my favourite “smart growth” guy, Todd Littman: http://www.vtpi.org/sg_save.pdf

    Now’s that part where I get math-nerdy. Throughout his Op-Ed, Niebergall talks about “average” household income and “average” housing prices. While technically the median is an average, the word is almost exclusively reserved for the mean. The Demographia study goes out of its way to draw the distinction and make clear that they are using median. I would like to see citations on Niebergall’s numbers, just to verify that it correctly uses median (despite his claims to use average). I would also like to verify that his numbers are based on household income, rather than the oft-confused family income. If someone wants it, I can go on a pretty good rant about that particular issue, but now isn’t the time.

    Finally, I intend to close with a bit of admitted ad hominem. If that’s an issue for you, I recommend the following: http://bensonian.org/2012/02/10/defending-ad-hominem-arguments/ If it’s still an issue for you, don’t bother reading further. As head of the RRHBA, Niebergall’s potential bias is clear. What may be less clear is the bias of the source whose arguments he parrots. The Demographia International Housing Affordability Study is not produced by a governmental or intergovernmental authority, nor an academic institution. Neither its methodology nor its conclusions have been peer-reviewed in any way. The principal and sole owner of Demographia is Warren Cox (the lead author of the study). Here’s his Wikipedia page: http://en.wikipedia.org/wiki/Wendell_Cox Here’s a right-wing blowhard/thinktanker who actively rails against rail projects (and transit in general) and “[believes] that road transport and low density are inherently superior.” I suspect his actual numbers are correct, but the framing and unsupported leaps to causes in the report should be taken with an appropriately sized grain of salt.

  3. Also, it might be worth mentioning that the housing affordability metric has absolutely nothing to do with affordable housing. To its credit, the Demographia report makes this clear in a footnote (though not without another snipe at “restrictive land-use policies”).

  4. Good point Brad, the report just jammed together a bunch of stats about cities and drew unfounded correlations between housing affordability and land use.

  5. “Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats.”

    – H. L. Mencken

  6. “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”

    – H. L. Mencken

  7. Another issue that needs to be addressed is the growing number of free-loaders in bedroom communities who travel back and forth to Regina every day for various reasons (work, recreation, etc.) yet don’t share in the cost of providing municipal infrastructure and services.

  8. Good post, Brad. Another factor affecting Vancouver’s housing affordability and not shared to any significant degree by Regina is offshore investment and speculation.

    Your last point is a sound one, Mr. Beatty, but what do you see as a solution? The only one I can see is annexation, and we know how easy that would be (not).

  9. Barb: I wonder if instead of offshore speculation we’ve seen much impact from the much-hyped “Alberta speculator/investor”? (I have tried to find out about that but been less than convinced by the answers I’ve heard.)

    Brad: Another brilliant post.

  10. There is some evidence the fear of the foreign investor is overblown (e.g. http://www.vanmag.com/News_and_Features/Running_on_Empty), especially with regards to the idea of a buyer leaving the property vacant. That article includes an anecdotal piece that speaks a bit to Paul’s domestic investor.

    The questions remain, though: why are investors attracted to such an ostensibly high-risk area (given the strong decoupling between housing prices and income, which in the past has been a good indicator of a bubble? What has ultimately caused such strong decoupling in such a large number of cities throughout the world?

    Cox (and his parrot, Niebergall) would have us believe it’s land-use policies. If that were truly the case, then those investors sure must be dumb as any change in policy will cause their investments to tank. I would bet that a good explanation comes from the rise of the megaregion, as detailed by Richard Florida. I don’t have time to flesh out the total argument, but basically certain regions not only dominate the world’s economy at the moment, but have the social infrastructure and creative capital in place to drive their dominance much, much higher through the coming half-century. Vancouver is in one such megaregion (Cascadia). Regina is not.

  11. Common wisdom in the mid-90s held that people from Hong Kong were buying Vancouver properties, as a hedge against the impending “Great Chinese Takeaway,” as the t-shirts were calling it.

  12. It is a very real possibility that this tendency (whether actual or not) has become ingrained in the discourse surrounding Vancouver real estate prices.

  13. Paul: what I’ve heard about offshore investment in real property in SK refers more to the buying up of farmland by (among others) German and Chinese investors.

    Brad: Frances Bula is my cousin, but don’t hold that against her. ;-) She’s been writing for a long time about Vancouver life, and has a particular interest in homelessness. Check out her blog.

    pc: your last two comments are quite correct. It’s not just the buying and speculating, and it’s not always leaving a property vacant: it’s the tearing down of existing housing to build mega-mansions, the cutting down of large old neighbourhood trees, and other acts that could be construed as a form of block-busting.

  14. Just putting a quick two cents in here while I have a quick second. I saw the note about offshore-speculators and possible Alberta speculators. I will say this – working directly in the heart of the industry, the off-shore speculators are about 90% of the problem of Regina’s housing “crunch”.

  15. Saskatoon is apparently considering a deal where it would provide water and waste water services to the bedroom community of Martensville. Residents would pay a premium for the service, which would presumably require a pile more infrastructure to deliver waste water into Saskatoon’s treatment plant and pump water out to Martensville.

    Without absolving cities of the need to plan responsibly, the Canadian Federation of Municipalities has argued for years that at the federal and provincial level more recognition needs to be given to the fact that Canada is an increasingly urban nation and some of the revenue/tax powers the feds and provinces have need to be directed toward municipalities to cope with the demands of growing populations.

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