News   Apr 03, 2020
Pastel Morning
 4.9K     1 
News   Apr 02, 2020
A Message to Our Readers
 6.7K     3 
News   Apr 02, 2020
Soon to be Gone
 3.9K     0 

Urban Development and Proposals Discussion

darwink said:
While that is somewhat the case, it is also that higher value properties subsidize lower value properties. We can solve this by only approving lower value greenfield when it is super efficient for infrastructure utilization.

A system that reflects marginal cost of service would help distort things, by reducing taxes on high value properties, making them worth even more, while reducing the value of highly fee'd properties.

The end result is taxes largely on people who are less able to afford it.

And when all the sewers need to be redone in Killarney , and Hillhurst, and the Beltline because of more residents, I am glad that that cost is also shared.
Click to expand...

A system that reflects marginal costs, by definition, eliminates distortions. That is literally the definition of marginal cost. We can discuss how to exactly calculate that, but you can't argue that a principle is achieving the opposite of what it is.

The tax is lowered, not on higher value properties, but on more efficient properties (from an infrastructure perspective), which, by and large, are more dense properties, which typically are lower property value than lower density development. The exact opposite of what you are saying.
 
darwink said:
But it isn't about a downtown condo versus a large single family home, it is about how a lower value suburban 800 square foot condo would probably pay way more under a marginal cost of service model than a 800 squarefoot condo downtown, pushing the price of the suburban one down and the urban one up, even though it violates equity, where we say taxes should be roughly proportionate to the ability to pay. I don't think that makes our city better.

Going to a marginal cost model, trying to fund the new sewage treatment plant only from fees or taxes on properties tied in after the tipping point for the old infrastructure being 100% utilized would be hugely distortion-airy. Everyone tied into the old system would effectively have value transferred to them from properties tied into the new system.
Click to expand...

And by pushing prices down on inner city residential units, you shift demand to more infrastructure efficient locations. I.e. you correct for cross-subsidization and ultimately reduce costs across the board. That is a bad thing?

You're going to have to explain that second part, because it makes no sense whatsoever. What value is being transferred? (PS this is exactly how we fund our sewage treatment plants btw)
 
Cowtown said:
I'm going to sound like a noob here, but what is the 'marginal cost model'? In regards to the cost of the suburban condo going down and the urban one going up, would that necessarily happen though? If there was some sort of monetary equalisation/incentive for inner city developers wouldn't it help make the inner city ones cheaper?
Click to expand...

Don't feel like a noob, this is some pretty detailed infrastructure cost model stuff. I'll give you an example to help out.

Imagine you and your friends go our for dinner. One person orders a steak ($35), another a sandwich ($15) one gets soup ($10) and another gets ribs ($20). When the bill comes, instead of each paying your own bill, you just split it, so everyone pays $20. That is what would be called an "average cost model" for infrastructure. Average cost models result in cross-subsidization- the person getting the soup is effectively subsidizing the person getting the steak. Now, if you all paid your own bills, that is what a "marginal cost model" would be. Now imagine if you went out to eat with your friends week after week, and each time you split the bill. Pretty quickly, everyone would start ordering steak, because you are not actually paying the full cost of the steak. But, since everyone else is doing it, the bill gets larger and larger, so everyone has to pay more. That is what happens in an average cost model, there is no incentive to get the less expensive thing, because you won't pay less, so you get cost escalation. You also have to ask yourself what is the demand for various menu items. Does everyone truly want to order steak, or are they doing it because the "market" is distorted.

Applied this to a city: imagine you have 10K new residents moving to your city. To accommodate them, you need $100M in various infrastructure costs (sewer, water, transit, roads, etc) (PS this number is low). But some development costs more to service than other development- let's say one development has a marginal cost of $18K, and others cost $7K to service. Same principle applies. If you charge an average levy ($10K per unit), you effectively are getting the less costly development to subsidize the more costly development. As a result, you get cost escalation across the board and you distort the market. You may see a huge demand for those homes that cost $18K to service, but you have to ask, is that because those buyers aren't paying the full cost of their purchase.

The crux here is how you define marginal cost. It is not the same as in basic economics because you shouldn't discount costs already incurred (i.e. just because you built a rec centre already, doesn't mean a new house shouldn't contribute to it). You also have to consider downstream impacts (you don't just use the sewer that goes to the end of your street, you are impacting the entire system) and you have to levelize costs of large infrastructure investments (i.e. the first home to use a sewer plant doesn't pay for the whole plant, that cost should be shared by all benefitting parties). But generally, marginal costs are by far a more equal and cost effective way to manage infrastructure in a city.
 
maestro said:
I'm not referring to development charges passed down to new home purchases but the servicing costs to existing homes. People will pay developers the higher median prices or not. It's not the same as a variable water charge determined by the distance traveled in the system, for example.
Click to expand...
So, you build a new condo building in the Beltline, but the Bonnybrook plant is functionally full. So you need a run all the way to Pine Creek. If a significant portion of the site wasn't impermeable before, you'd either need local storm water storage, or a levy that reflect the high cost of building stormwater storage in an area without surface land for it.

Whereas in Seton you'd pay for the river crossing to Pinecreek, and in Walden you pay for a straight shot run. In Evanston you pay for going across the entire city (whereas the competitors in Airdrie only pay for their local sewage lagoons).

I just don't think when you get down to figuring it out that the outcome is something that is good, for equity or for urban form. Plus the administrative burden of it all.

The political outcome is even worse - having rural residents to pay for the length of their tie-ins to the grid, and the local grid versus running it collectively played a big part in defeating the government there.
 
retrofiturbanism said:
A system that reflects marginal costs, by definition, eliminates distortions. That is literally the definition of marginal cost. We can discuss how to exactly calculate that, but you can't argue that a principle is achieving the opposite of what it is.

The tax is lowered, not on higher value properties, but on more efficient properties (from an infrastructure perspective), which, by and large, are more dense properties, which typically are lower property value than lower density development. The exact opposite of what you are saying.
Click to expand...
The distortion would be that you raise the burden heavily on a starter home, but lower it substantially lets say on a railway worker era cottage in Ramsay. Then when that railway worker cottage is redeveloped into a du or quadplex you raise the burden. You create a permenant distortion between older homes that rely on older infrastructure, and discourage all new development, whether infill or greenfield.

I don't think you get the outcome I assume you want - dense closein neighbourhoods. I think people may be basing their thoughts on a misinformed opinion of how close our redeveloping innercity is to requiring significant investments to support further densification. Hense my opinion of why proposals like this would be bad, for a myriad of reasons. Not only for the "policies that get governments unelected and the policy is reversed" perspective, but in the practical outcomes of actually implementing it causing outcomes that the proponents of the policy in the first place probably don't want.

Imagine if solely new downtown and beltline Calgary developments had to pay for the increase in demand in downtown Calgary that has necessitated the $150 million - $200 million (higher now that it is all underground) Downtown Calgary Transmission Reinforcement Project.
 
darwink said:
So, you build a new condo building in the Beltline, but the Bonnybrook plant is functionally full. So you need a run all the way to Pine Creek. If a significant portion of the site wasn't impermeable before, you'd either need local storm water storage, or a levy that reflect the high cost of building stormwater storage in an area without surface land for it.

Whereas in Seton you'd pay for the river crossing to Pinecreek, and in Walden you pay for a straight shot run. In Evanston you pay for going across the entire city (whereas the competitors in Airdrie only pay for their local sewage lagoons).

I just don't think when you get down to figuring it out that the outcome is something that is good, for equity or for urban form. Plus the administrative burden of it all.

The political outcome is even worse - having rural residents to pay for the length of their tie-ins to the grid, and the local grid versus running it collectively played a big part in defeating the government there.
Click to expand...

I'm not recommending it at all. It's an example and the first thing that came to mind.

It's actually a poor example as the costs per kilometre to construct, maintain or upgrade a water system are variable as well. It costs a lot more in a dense, urban environment. I only mentioned it because it lends to the discussion that lower densities are inherently more cost prohibitive. It applies to almost any municipal service. A bus route is sufficient in a lower density neighbourhood while a high density neighbourhood will likely require fixed rail. A ladder and pumper are effective in a low density neighbourhood however, a high density neighbourhood will need a trained highrise unit as well.

These discussions always lead to densities. They do matter however, it's how poorly new master planned communities are designed both, low rise and high rise, that makes it such a hot topic.
 
Last edited:
tumblr_n6nxr57Fez1qb6v6ro3_400.gif

(take it as a compliment)
 
Lets look at buildform of Calgary. Here are two maps (the maps are links) which delinate different measures of indentifying easy to service areas.If you click the maps, you will be taken to interactive maps where if you zoom in you will get even better detail.

Here is a map that shows areas that in theory are better able to support cost-effective bus service:
Population Density & Transit Viability by BDawe
Based on Canada Census 2016
This is another map of population density per square km, though colourized to show specifically areas with a population greater than 3000 people per square kilometer, or 12 people per acre. Red are areas less than 3000 people per sq km.

This refers to a study by referred to in Nathan Lauster's book The Death and Life of the Single-Family House as a notional minimum density for cost-effective bus service.

The quote, from page 43: "The relationship between urban density and public transit use is exceptionally strong, with some suggestion of a cutoff--perhaps around twelve persons per acre (or about three thousand per square kilometer)--below which ridership drops off and expense per user makes transit impractical."

The study is cited as: Kenworthy, Jeffrey, and Felix Laub. 1996. Automobile Dependence in Cities: An International Comparison of Urban Transport and Land Use Patterns with Implications for Sustainability. Environmental Impact Assessment Review 16:279-308
upload_2018-7-12_10-11-13.png
Yellow is more than 3,000 people per square km, green is over 9,000 people per square km.

Another measure, the Jane Jacobs measure, which is granted based on perception of the viability neighbourhoods in New York post WWII, shows different threshold for density (0-6 units per acre, 6-10, 10-20, and 20-100).
Jane Jacobs Densities by BDawe
Based on Canada Census 2016
In a passage of Death and Life of Great American Cities (pages 208-212), Jane Jacobs lays out several thresholds for density, claiming that certain units per acre correspond to varying levels of urban viability.

She describes 6 Units Per Acre or less as "Very low densities" that "can make out well in suburbs." 10-20 units per acre is described as "Semisuburb", and supposes that they are "designed to become a grey area". She describes 20-100 units per acre as the "in-between" densities, "fit, generally, for nothing but trouble", leaving proper urban densities producing diversity and amenity at greater than 100 units per acre.

This hard to reckon with on-the-ground densities in Canadian cities. In Vancouver, only a single census tract (near Joyce Station) fits that description. Under this taxonomy, all of downtown Vancouver would be described as "nothing but trouble", and vibrant neighbourhoods like Commercial Drive are far from it.

Hardly any of Torontoor Montrealfit this description either

It's been suggested that Jacobs revised this view after she moved from New York into a street-car suburban area of Toronto, which would seem to be born out.

"Jane Jacobs Densities" are discussed further in this Pricetags Post, including some comments from her son, Ned.
upload_2018-7-12_10-16-12.png
 

Attachments

  • upload_2018-7-12_10-11-13.png
    upload_2018-7-12_10-11-13.png
    1.8 MB · Views: 490
  • upload_2018-7-12_10-16-12.png
    upload_2018-7-12_10-16-12.png
    1.1 MB · Views: 464
Last edited:
darwink said:
The distortion would be that you raise the burden heavily on a starter home, but lower it substantially lets say on a railway worker era cottage in Ramsay. Then when that railway worker cottage is redeveloped into a du or quadplex you raise the burden. You create a permenant distortion between older homes that rely on older infrastructure, and discourage all new development, whether infill or greenfield.

I don't think you get the outcome I assume you want - dense closein neighbourhoods. I think people may be basing their thoughts on a misinformed opinion of how close our redeveloping innercity is to requiring significant investments to support further densification. Hense my opinion of why proposals like this would be bad, for a myriad of reasons. Not only for the "policies that get governments unelected and the policy is reversed" perspective, but in the practical outcomes of actually implementing it causing outcomes that the proponents of the policy in the first place probably don't want.

Imagine if solely new downtown and beltline Calgary developments had to pay for the increase in demand in downtown Calgary that has necessitated the $150 million - $200 million (higher now that it is all underground) Downtown Calgary Transmission Reinforcement Project.
Click to expand...

The idea is that those homes already paid for the infrastructure that services them, and that cost is built into the cost of the home. You can't charge someone twice for the same thing.

Also, those "significant investments to support further densification" are the same investments to support greenfield growth. Where do you think the water and sewer lines to new suburbs connect to? If you add more people to the Beltline, for example, you may have to upgrade a sanitary line, but that same line would have to be upgraded for new communities to the west that are upstream of it.

While there may be nuances here and there, overall infrastructure is far, far more cost effective the denser the development it serves. Pretty much every economics paper reviewing the topic concludes as much.
 
Will the Eau Claire flood wall extended west? The current section seems rather pointless otherwise. If it will go west, the location is not obvious
 
You must log in or register to post here.

Back
Top