Removing Obstacles to Smart Development

Above, we have identified the key attributes of smart development, and compared those to what we have been seeing "on the ground" in the region. For the most part (the most notable exception being some improvements in net residential densities, particularly of the grade-related stock), we have not seen smart development take place, and hence we cannot expect smart growth to be achieved at the regional level unless changes are made.

There is a wide range of obstacles currently in place that are impeding the ability of developers and builders to create development consistent with smart growth. These obstacles must be removed and/or addressed if smart growth is to be achieved.

The following discussion draws predominantly (though not exclusively) on the range of obstacles that have been identified by the developer and builder industry in the workshop held as part of the research process for this project. In general, the developers and builders - who represented both residential and commercial sectors - expressed a high degree of support for smart growth. They indicated a willingness and desire to both implement smart development projects and to innovate, but expressed a frustration with the many current obstacles that prevent them from doing so.

A summary of the conclusions of the workshop is included in Appendix C.

Regional Planning

Obstacles to Smart Development

At present the Central Zone has the dubious distinction of being the only large urban region in Canada without a single, coherent regional vision or plan. Planning is currently divided amongst the many local municipalities and upper tier governments that exist in the region.

This means a lack of coordination within and across the region regarding where growth and accompanying infrastructure investments should occur.

Within the region, municipalities often compete with one another to attract development - leading to overly optimistic plans, and over-designation of nodes and urban expansion areas.

There are over seventy nodes identified in the Official Plans for the GTA, Hamilton and Waterloo regions, far exceeding what the market can realistically deliver in terms of appropriate denser, mixed use built forms. This is especially the case when uses that could support transit are developed in other locations, robbing nodes and corridors of the development they need to make smart growth strategies a reality.

In addition, too many nodes have been identified in newly urbanising areas without first encouraging further intensification around existing concentrations and existing infrastructure. For example, many GO station areas remain undeveloped.

Workshop participants noted that an over-abundant supply of land at the fringe depresses land prices and removes incentives to use land more efficiently. In an area roughly corresponding to the Central Zone, it is estimated that, even if current development patterns are maintained, enough land is available until 2031 without expanding most current urban boundaries nor infringing on the Oak Ridges Moraine.¹⁷

Approaches to smart growth are fractured and fragmented. The lack of coordination of growth and investment on a regional scale results in inefficiencies, underutilised infrastructure and over-spending on infrastructure. And, especially in the post-offloading era, "fiscal zoning" (sometimes called exclusionary zoning) is becoming more common, as municipalities try to manage their portfolio of lands and development such that they return the best net revenues.

Key responses

A limited number of nodes and other strategic growth areas need to be identified on a regional scale. Growth should be directed to these areas in order to maximise existing and future infrastructure investments.

Nodes created in newly urbanising areas require significant new investment. Emphasis should be placed on directing development to areas with existing infrastructure, as GO train stations, subway stations or areas where additional growth could complement existing concentrations of residences and businesses with low marginal infrastructure costs.

A clearer, more strategic way of addressing the linkages between employment and residential development is also needed - promoting jobs-housing balance on both on a local and regional basis. This will help to minimise auto trip lengths and support transit investments by linking employment areas more closely with transit.

Transit

Obstacles to Smart Development

In many areas of the region, improvements to the existing transit system are necessary before more compact development can take place, either because the existing routes are at capacity, service is infrequent or routing does not adequately respond to demand. Existing routes could be improved, such as Toronto's streetcar routes that suffer significant delays and have lost a large number of vehicles over the last decade, or GO train routes that only offer service at peak hours.

Developers are reluctant to proceed with investments in denser development based solely on the promise of future transit. Investment in transit must be timed to either lead or occur in tandem with development, if denser, more transit-supportive development is to be achieved.

Transit systems must also be developed that respond to the new realities - serving not just commuters on fixed, full-time schedules, but also the needs of shift workers and those with more varied work schedules. A parallel trend is the growth in suburb-to-suburb commutes.

Key responses

An attractive, effective, region-wide transit system is needed. It must offer high levels of service in order to be competitive with the automobile. Only comprehensive solutions incorporating land use considerations and region-wide coordination can achieve some level of success.

Building on the success of existing transit lines can be a cost-effective strategy to tackle local congestion and mitigate the environmental impacts of automobile use. Many transit authorities in the region have been caught in a spiral of declining service and ridership over the last decade as a result of scarce resources. Capital infusion and support for operations would result in immediate gains in ridership, for example on GO train lines where substantial pent-up demand exists.

Investments in transit must be tied much more closely to surrounding development, both in terms of time (i.e. transit service in place prior to or at the same time as development), and space (i.e. smart development located within close proximity to transit). Obstacles to smart development must be removed and transit-supportive development discouraged or prevented from taking place elsewhere. On the other hand, non-transit supportive development should not be permitted in locations benefiting from significant transit infrastructure investments.

In addition, funding for roads must be considered in conjunction with funding for transit, as a coherent and consistent package aiming toward improving the share of trips taken by transit. At present, funding for roads and expressways in the Zone frequently undermines the relative attractiveness of transit. As a result, investments in transit are not as effective as they could and should be.

Areas benefiting from substantial provincial investment could be designated as areas of Provincial interest under the Planning Act, so as to ensure timely and compatible development through the removal of obstacles and the streamlining of the development process.

Local Planning

Smart growth is not always fully reflected in and supported by local plans, policies, zoning by-laws and municipal engineering standards. As such, existing local planning policies and engineering standards can act as impediments to smart development. This issue is of particular importance in the strategic smart growth locations.

On one hand, local regulations can prevent smart development and innovative forms of development, by either requiring lengthy approvals processes, or by preventing non-conforming uses, densities, forms, or infrastructure altogether. Less costly, more land efficient and environmentally-friendly municipal infrastructure solutions are frequently not permitted by municipalities and other regulatory agencies. This is an important issue, as the percentage of land devoted to infrastructure (e.g. roads, drainage) and other "public takings" (e.g. parks, conservation areas, school sites) in newly urbanising areas has been increasing, contributing to falling gross densities.

Restrictive density limits can also be a constraint to the economic viability of smart development. While still protecting key qualitative parameters such as shadow or street conditions, more generous as-of-right density limits could improve the economic viability of both denser forms of development and transit at key smart growth locations.

In other instances, local regulations sometimes "overreach", requiring mixing of uses or other types of development that cannot be supported by the market.

When it has occurred, planning policy has frequently not directed smart development to the strategic smart growth locations, representing a significant lost opportunity. Node-building uses such as public buildings, hotels, entertainment facilities, cultural and civic centres, stacked townhouses and office buildings are generally permitted in a wide range of locations across a municipality. These forms of development should be recognised as a strategic resource and a driver of smart growth and transit ridership. Local planning should be much more discriminating about where and how these forms of development are permitted and equally, where they are not.

Demand for higher density forms of development in nodes can often occur towards the end of the build-out of new suburban areas, or beyond. Flexibility must be built into the planning framework, in order to allow future development or redevelopment of sites to higher density uses as demand emerges. For example, this might involve planning sites such that surface parking areas are designed up front to be future building sites, with planning frameworks allowing future development of these areas as-of-right.

In established parts of the urban region where nodes are or can be designated around GO or rapid transit stations, land ownership can be fragmented. This can be a further obstacle to comprehensive development or redevelopment of strategic smart growth locations.

Key responses

In general terms, a more flexible and proactive planning framework and process is needed in the strategic smart growth locations.

Municipalities, the Province and other relevant agencies need to take a much more focussed and proactive policy stance regarding comprehensive development or redevelopment of strategic smart growth locations.

Municipalities must view their role as one of facilitators rather than regulators, actively encouraging and facilitating comprehensive development at strategic locations. This could mean, for example:

• bringing landowners and other stakeholders together to craft a development plan for the strategic smart growth areas
• putting flexible implementing policies in place to permit the development
• ensuring a public realm of streets and parks that is consistent with smart development
• dealing with fragmented land ownership where needed through innovative approaches, and
• establishing clear and competitive targets for the time required to approve projects.

In already-established areas with more complex land ownership patterns, new mechanisms may be needed - including those currently used in developing new suburban areas, for example, a modified block plan approach and landowner cost-sharing agreements.

Parking

Obstacles to Smart Development

Parking - in particular, land-consumptive surface parking - is one of the key impediments to achieving smart development, especially at key smart growth locations, where a compact, walkable and transit-supportive urban form is required. Often, building forms that are commonly built today, such as multi-storey office buildings, could be considered smart development - if only they did not come with the vast areas of surface parking that they tend to. The large areas devoted to surface parking result in low effective net densities and preclude the establishment of a compact, walkable, transit-supportive environment, which is particularly critical at key smart growth locations.

Key responses

There are a number of strategies that can be pursued to both reduce the supply of parking, and to make better use of parking that is provided.

Parking standards and requirements are often the same across a municipality and do not reflect site-specific conditions where requirements may be lower as a result of transit availability, or because of the profile of users of a facility, such as students or seniors. Adopting a more flexible, project-specific approach at strategic smart growth locations can help reduce parking. Of course, transit must be brought on stream prior to or in conjunction with development in order for this to be made possible, as discussed above.

Municipalities can also take a more active role in encouraging and facilitating shared parking, particularly in key smart growth locations. This is particularly appropriate where mixed use occurs, and different users require parking at different times of the day - for example, offices, entertainment, sports, retail and residential development may be able to share parking facilities within the context of compact development. This could also take the form of municipal parking, including structured parking facilities provided through parking authorities. The Town of Markham is currently pursuing this approach in order to support compact development in its Markham Centre.

Permitting on-street parking also makes more efficient use of road infrastructure and reduces parking costs and land requirements. In nodes and other strategic locations, parking could easily be metred, providing a source of revenue to municipalities.

Aside from promoting walkable, compact and transit-supportive development, such approaches also remove a significant cost which currently act as a barrier to denser development in suburban locations.

Parking strategies at key smart growth locations should be clearly linked with existing or new investment in transit. Providing large supplies of parking can encourage driving, which undermines transit investments and discourages transit ridership. In order for investments in transit to be productive and successful, they must be linked more closely with parking strategies.

Municipal Finances

The structure of development charges was identified in the workshop as a major impediment to smart development. As described above, the issue is that as currently structured, development charges ("DCs") do not accurately reflect the actual costs incurred by different types of development in different locations across a municipality.

In addition, separate DC policies for innovative development that acknowledge the different costs associated with innovative development forms, such as apartments over garages or medium density apartment buildings, do not exist at present.

Developers and builders suggested that DCs be 'rationalised', such that they reflect more accurately the actual costs incurred by different types of development in different locations. This can be achieved by charging for hard infrastructure on a land basis, which builds in an incentive to build more densely, while maintaining flexibility. The per gross hectare charge could vary from area to area to reflect actual cost variations, and could also vary by type of development where warranted (e.g. higher levels for retail, which contributes proportionately more to road costs).

True-cost based charges for innovative forms of development (e.g. apartments over garages) should also be established up front.

This is something that municipalities can implement unilaterally. However, the Province could also amend the Development Charges Act to require that DCs for hard infrastructure do reflect more accurately the actual costs incurred by different types of development in different locations.

This shift toward true-cost DCs would reward the efficient use of land rather than act as a disincentive, as current charges do, while maintaining developer flexibility.

Rationalising the structure of development charges was viewed by the developers participating in the workshop as a major step towards encouraging smart development.

Another obstacle to smart growth is that major public investment has not supported smart growth. Investments in major public facilities, including municipal infrastructure, educational facilities, hospitals, long term care facilities, and courthouses, have not been directed to strategic smart growth locations as a first priority. Public spending at the federal, provincial and municipal levels needs to be much more closely aligned with smart growth and harnessed to support smart development. Government buildings can act as catalysts and contribute to creating a critical mass of activity in these locations.

The lack of creative financial tools at the disposal of municipalities is also an impediment to financing needed infrastructure, as well as other actions needed to support smart growth and smart development - such as the cleanup of brownfields sites. Municipalities need a broader range of financial tools.

For example, tax increment financing ("TIFs") have been effective in financing revitalisation of neighbourhoods and brownfields all over the United States. Much has been written about this tool and a full analysis is beyond the scope of the report. In brief, TIFs involve borrowing against projected increases in property tax revenue in a given area to finance projects such as the remediation and redevelopment of brownfields or transit infrastructure. TIFs could even be used to create structured parking, landscaping and other improvements in a narrowly defined area destined to become a node or corridor area.

The Political Environment

Obstacles to Smart Development

Achieving smart development is perceived to be limited at the moment by a lack of strong political leadership on the issue at all levels of government, and an unwillingness to make clear and coherent decisions. Difficult choices must be made, particularly in the current environment of fiscal restraint, but there is a perception that those in leadership positions are not adequately making these "tough choices".

For example, though public funds are not limitless, the substantial spending that does occur has not been used strategically, nor leveraged to support smart growth. This involves making choices - in terms of priority places for investment, for example, or the relative emphasis of funding placed on transit versus roads - in short, prioritising funding to achieve smart growth. At the political level this means doing things differently, adopting a clear vision for the region, clarifying priorities and making the day to day decisions about investments and development that will ultimately achieve the vision.

In the local arena, in the absence of clear policy directions and leadership, infill and intensification at existing nodes are routinely opposed by local ratepayer groups, with local interests trumping significant regional priorities. Thus site-specific decisions are frequently at odds with policy goals and directions. Alternatively, decisions are effectively taken out of the local area and referred to the Ontario Municipal Board.

Key responses

In order to address local resistance to smart development, local and provincial governments should develop research and education programs and tools in collaboration with the private sector (including non-profit) to help the public and other key agents better understand the linkages between housing choices, business location choices, travel choices and outcomes such as congestion, air pollution and the costs of infrastructure, tax rates, and transportation costs.

This might include explaining the need for different forms of development within a community to house that community's own population as it ages, or younger members of the same community buying their first home. Or, research on the real impacts of higher density on property values of surrounding development might be conducted and presented.

Richmond City Hall, Richmond BC, Hotson Bakker and KPMB

Notes