Bill Hulet Editor

Here's the thing. A lot of important local issues are really complex. And to understand them we need more than "sound bites" and knee-jerk ideology. The Guelph Back-Grounder is a place where people can read the background information that explains why things are the way they are, and, the complex issues that people have to negotiate if they want to make Guelph a better city. No anger, just the facts.


Saturday, December 17, 2016

The Walmart Story---by Ben Bennett

The Walmart saga
By Ben Bennett


Summary

Ben Bennett
For more than 10 years Walmart and its developer, 6&7 Developments tried to get industrial-zoned land in Guelph’s north end rezoned for commercial development. At the very first developer-sponsored public meeting at the Evergreen Centre, a lot of people turned out to express their concerns. This established a pattern that has endured through every single public meeting on the issue from 1995 to the present day. While there were a small handful of regular speakers in favour of the proposed Wal-Mart, there were literally dozens opposed. Residents for Sustainable Development in Guelph (RSD) was formed to represent citizens opposing the development at the Ontario Municipal Board (OMB), after the developers appealed the 1997 council decision to reject the development. More legal challenges followed the OMB decision to allow the store.

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Recently, Walmart Guelph marked the 10-year anniversary of opening its store on Woodlawn Road by opening another at Stone Road. With that in mind, this is a good time to recap some of the struggle that happened in Guelph leading up to that original store opening in 2006. (Full disclosure: I was a key player in that battle, as spokesman for Residents for Sustainable Development (RSD), the citizens’ group that opposed the location Walmart chose for its first store.)

Many people shopping at either of the two Walmarts in this city will be aware of the long time it took for the first store to open, but there are likely hundreds of others who have no idea about the huge battle that preceded it. As a model for community organizing, sustained participation in a tortuous planning process, and, sheer tenacity, the big box battle in Guelph from 1994 to 2006 had few equals. It could be seen as a David and Goliath story or a tale of a community divided; the media was to play either theme, depending on the angle of the articles being written. And there were lots of articles, mostly local at first, but even the national media took an interest once the legal battle moved up the line from the Ontario Municipal Board (OMB) to the courts. There were TV programs, and even a documentary titled Walmart Nation by Toronto film-maker Andrew Munger.



Fairly early on in the legal process that followed its appeal to the Ontario Municipal Board (OMB), Walmart claimed to have a petition with 8,000-10,000 signatures supporting the company’s application to build in the north end. Residents for Sustainable Development (RSD) asked to see it---and only after long delay---RSD was allowed to see the exact wording, which turned out to be "We respectfully petition Wal-Mart Canada to set up business at Guelph, Ontario". In other words, their petition was about whether or not citizens wanted a Wal-Mart in Guelph, not whether or not they wanted it at the specific site it ended up going---and which the official plan of the city of Guelph forbade.  Later, a group called Guelph Preservation Action Committee amassed a petition of more than 12,000 names opposing the store, and that particular petition was all about the location at Woodlawn and Woolwich. No one ever suggested there wasn’t a consumer demand for big box stores. Indeed, Residents for Sustainable Development (RSD) even wrote to Walmart suggesting they build two stores – one in the west end and another in the east end, where all the new development was taking place.

From the beginning of the fight RSD set up a website (www.not-there.ca) to reinforce that the issue was location, not the store. While many of those opposed were very much against Walmart as a company, the principal arguments had to be about planning. Zoning is about the use of the land---not the individual user. Walmart was seeking to change the zoning from industrial to commercial. And to do that it needed the city to change its Official Plan. When the council refused, Walmart appealed that decision to the Ontario Municipal Board (OMB.)

The few people who actually showed up at the public meetings in support of Walmart, and the letters to the editor, focused on the need for the store, not the location. (There were surprisingly few given the apparent demand – but that is likely a biased view.) Some of them argued that if people were leaving town to shop it would be better if they stayed in Guelph. It was a fair point but as the city already had land zoned and ready in its Official Plan, it made more sense to put it there. The store could have been here in the late 1990s if Walmart had built on land with the right zoning.

That a lot of people in Guelph really wanted a Walmart, however, was confirmed in the 2003 municipal election. All the pro-Walmart candidates won, and most of those who supported the council’s decision to oppose the north end location were thrown out, including the mayor. (Ironically, two months after the store opened in the fall of 2006 most of that political support evaporated and almost all of the pro-Walmart candidates were defeated.)

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City Hall

It all began back in 1994 when and the out-of-town developer named "Six and Seven Developments" applied to build a big box “power centre” anchored by a Walmart on industrial land at the north end of Guelph. A couple of months later, another developer named "Hammerson Canada" (then owner of Stone Road Mall) applied to build a power centre anchored by Walmart’s retail rival Zellers on University of Guelph lands adjacent to the Stone Road Mall. (Ironically, once built, the Zellers never really got off the ground and was subsequently replaced by a Target. That store also failed and it is now the site of the second Walmart in Guelph.)

At the time of the original applications in the mid 1990s there was a huge shopping centre zoned but unbuilt in the west end of the city, and 20,000 residents in new homes there with no local stores. And there was nothing in the east end of Guelph, although a large retail centre was zoned. There is still nothing for shoppers in the east end, although a small grocery store has been promised.

The opposition to the Walmart was, for some, as noted above, all about the company itself, but the main planning argument was about the location. Its size would place existing (and planned) shopping centres in jeopardy and its location would see increased traffic. Had the company accepted the council decision and opted to locate in the west end site that was already zoned---next to the planned Zehrs---this whole story would not have happened.  And the thousands of Guelph residents who were very keen to have a Wal-Mart in Guelph would not have had to wait so long.

We have no idea exactly how much they spent on lawyers’ fees but we do know they lost more than seven years’ worth of sales. At the minimum agreed sales rate of $505 per square foot, a 135,000 square foot store would have generated $477,225,000 in sales —almost half a billion dollars! Each year the store was not here, another $68 million in Guelph sales was lost. And the city has also lost approximately $1- 2 million in taxes.

(It was subsequently learned that Walmart was co-owner of the development company that wanted to build the power centre.  It had a very real commercial reason to want that site---in addition to the opportunity of making sales at the retail level---hence its insistence on this site and not the already zoned sites that it could have chosen. In fact, when people complain about their neighbourhood lacking things like grocery stores, part of the reason is because large retailers refuse to abide by the official plan and the OMB "enables" them by allowing them to ignore it.)

The city council, sensing this was a big issue, asked its planning staff to develop a comprehensive consultation process. Twice in the space of two weeks, the people of Guelph gave up their evenings to learn more about the big box plans. While there had been some efforts locally to mobilize people on the Wal-Mart proposal (which wasn’t hard given the company’s reputation), the sheer number of those attending both meetings was a shock to everyone. Despite the PowerPoint presentations, the nicely-coloured architectural renderings on easels, and, reassuring words from lawyers, most of the public attending those meetings was not buying it. It was the same story at the official public meetings. By a margin of perhaps 10 to one, the residents of Guelph were saying "No Thanks".
When the matters finally came to the council table for a decision (both needed zoning changes), there were more crowds of concerned citizens, more earnest deputations, and both applications were turned down.

The next day the local paper screamed, “Power to the People!”

What had happened was what is supposed to happen. The council had made a decision which supported its Official Plan and reflected the views of its constituents (or at least, those who showed up to attend the meetings).

But then the real power started to show.

Within a few weeks of the June 1997 council decision, both developers lodged appeals with the Ontario Municipal Board. (Anyone can appeal a council decision to the OMB, assuming the reasons are not considered “frivolous”, but not everyone can afford the lawyers and experts needed to carry a case. Developers, who are usually the ones doing the appealing, can afford it. It is a cost of doing business.)

The developers brought “revised” plans to the OMB and the city was ordered to hold another public consultation process. Once again, the meetings were full; once again the vast majority of the public attending said No Thanks. But by now there was a different council, with many new faces, most of whom were right in line with the free market theories being espoused by the provincial government led by Premier Mike Harris. Despite a strong staff recommendation saying the proposals really hadn’t changed, and continued public opposition, the council approved both proposals in February 1999.

So much for the people’s power. But the story didn’t end there.

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The OMB Players

For a variety of reasons, the OMB pre-hearings dragged on another two and a half years, and the proposals were sent back for a third public process in the fall of 2001.  Once again, the meetings were full; once again the vast majority of the public said "No Thanks".

Art by Scott Mooney
This time the staff produced a report supporting both developments, with the Walmart going first and the Zellers following some years later. This led to furious lobbying by the University of Guelph and a combination of in-fighting and unlikely allegiances at the council table that saw each proposal turned down. This decision had little to do with the input from the public or the planning staff, but everything to do with the power of local politics. (Around this time Guelph Against Goliath was published, which I wrote with my partner Gail McCormack.)

The OMB hearing finally got under way the following summer. As the representative for our local citizens’ group, Residents for Sustainable Development (RSD), I was a non-lawyer surrounded by the best of Bay Street. They had the power. We had the passion. It was not a particularly good match.

Being an old boys’ club, there is a culture that permeates the hearing process that makes it pretty clear that only lawyers need apply. It doesn’t mean that as a non-lawyer you cannot play, and it is not as if the other players are not courteous and accommodating. This was certainly my experience. But there is a reality here that cannot be ignored. Lawyers at this level are paid big bucks because they know the game. They have access to resources and experts that the citizen can only dream about and the collegiality of the courtroom environment guarantees they will be heard.

Based on some of the decisions that have come down during the four years of pre-hearings and motions that we were part of, we sometimes wondered if anyone was even listening. In most cases, the decisions did not even acknowledge the arguments and points we had made.

The way the OMB is set up, all the decision-making power is with one person: the presiding member. OMB members are political appointees. The idea of an “appeals court” for council decisions makes sense, but as long as the people making the decisions cannot be realistically accessed or challenged by the public, there will always be question marks that hang over their decisions.

The OMB hearing started as planned on April 15, 2002. The players were:
  •  Armel Corporation, which owned the west end shopping centre new anchored by the large Zehrs 
  • The Bay, which owned Zellers 
  • the University of Guelph, which owned the lands east of the Stone Road Mall 
  • 6&7 Developments, which was co-owned by Walmart and wanted to build on the land it had purchased at Woodlawn and Woolwich
  • the City of Guelph, 
  • Residents for Sustainable Development (RSD)
  • Dr. Griff Morgan, a local activist who was representing the Council of Canadians 
  • the Ignatius Jesuit Centre, which owned land right behind where the Walmart was proposed
There was an immediate delay while the Board called for Walmart sales figures.

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The Time Line

In September 2002, we got back to business.

Phase One of the hearing---the market issues---was to be about six weeks of in-camera sessions on what kind of sales a Walmart can be expected to do in Guelph. Based on the previous analysis, we knew it will be somewhere between $450 and $600 per square foot but they still had to argue about the exact figure for six weeks! This part was moved to Toronto, as it was in camera. It ran for several months - six weeks having been a somewhat hopeful underestimate.

The parties had reserved (more realistically) four to six months for the actual hearing, which was to be held at the Guelph City Hall council chambers.

On November 10 2003, the mayor and most of the “progressive” councillors were swept out of office and replaced by candidates whose mantra essentially was Wal-Mart and low taxes.

One of council’s first acts was to instruct its solicitor and Aird & Berlis LLP to undertake discussions and negotiations with the parties to the hearing to determine whether and on what terms settlement with some or all of the parties may be achieved. A public meeting was scheduled for May 25 2004, at the Italian Canadian Club. At the meeting, staff were to present a report on the outcome of those discussions.

As if by magic, in the days leading up to the meeting, it was announced that the University, the Bay and 6&7 had resolved their differences and a couple of days later we were advised that Armel was out of it, too, having settled its differences. No details. No comment.

Council sat through 42 delegations on the big box issue, May 25 2004, with 37 of them opposed. The vote was 10-3 to support both big box proposals.

Griff on the left, and Vi Morgan on the right---with Maude Barlow
in the middle. Three well-loved individuals.
Photo from the Council of Canadians.
RSD was now the only party opposing the developments (Dr. Morgan having passed away earlier that year.). It was time to get a lawyer. Enter Eric Gillespie. The actual hearing began as scheduled August 3.

At a public night at the Italian Canadian Club about 400 people showed up, with more than 70 on the speakers list, with all but 5 opposing the Walmart.

Three days were reserved to hear the final arguments on both the planning and charter issues, beginning with 6&7 Developments, October 19 2004. A statement by Bob Boxma, September 1, 2004 read: "RSD intends to argue that the Board, in considering whether to approve the planning instruments for the 6&7 lands, must have regard for the right of freedom of religion that is protected under the Canadian Charter of Rights", and On October 21---more than seven years after its first prehearing conference---the Ontario Municipal Board hearing ended.

"You have presented me with probably the biggest challenge of my life, " said OMB chair Box Boxma as the hearing came to end.

To no one's real surprise, the Ontario Municipal Board announced in January 2005 that it had approved the proposed Wal-Mart big box development at Woolwich and Woodlawn in Guelph.

RSD sought leave to appeal the OMB’s decision and the hearing was held 3 at the Divisional Court of Ontario in Toronto. In March Madame Justice Ellen Macdonald granted RSD leave to appeal, delaying the opening of the Walmart.

In the meantime, RSD held a public meeting to discuss other uses for the 6&7 site and sent the report off to Walmart.

There were presentations on the traffic, tax and social impacts of a business park, a cooperative housing development, a retirement/nursing home facility and a sports and playing fields complex. Other uses suggested included a community park, a research centre, a second campus for Conestoga College and a windmill farm.

In July 2005, despite the oppressive heat, about 400 Guelph residents and some out-of-town visitors packed into Chalmers Church for a Not There fund-raising concert. The show featured many of the local musicians who played on the CD, plus a bonus appearance by Juno-winner Stephen Fearing, who was one of the speakers at the original Walmart public meeting at the Evergreen Centre 10 years ago.  Singers James Gordon (now a Guelph City Councillor) and Sam Turton were interviewed by CBC earlier that day.

In August, 2005 the Divisional Court dismissed RSD’s appeal. RSD subsequently appealed that decision to the Court of Appeal, and a challenge under the Charter of Rights and Freedoms remained an option when other legal avenues had been exhausted.

In the meantime, RSD reached out to Walmart again.   In a letter to Wal-Mart Canada CEO Mario Pilozzi the group offered to withdraw its appeal if the company could prove its claims that there was majority support in Guelph for a Walmart at the Woodlawn and Woolwich location store at that location. Walmart declined RSD's offer.

In 2006  I published Secrets, Lies and No Replies. It was designed “to set the record straight about a number of matters and to provide some background on the efforts RSD has made over the years to come up with a community solution to this divisive issue.”

Later in 2006, the Ontario Court of Appeal refused RSD’s leave to appeal the August Divisional Court decision.

That was it for RSD’s legal options.

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The Multi-Faith Challenge

Soon after the appear, a local multi-faith group brought a Charter challenge against the rezoning that allowed the Walmart.

Citing Section 273 of the Municipal Act, the application was filed alleging that the by-law was illegal—in violation of the Canadian Charter of Rights and Freedoms—in that major commercial activity would directly and substantially interfere with the religious beliefs and practices of individuals of many faiths who use the Ignatius Jesuit Centre and adjoining lands.  Section 273(1) of the Municipal Act states that any person can apply to the Ontario Superior Court of Justice to have a municipal by-law quashed for illegality.

This move led to some serious negotiations with the big box store’s lawyers, resulting in a settlement.

The full details of the settlement were not made public but the highlights were. They included further visual and noise mitigation through the use of berms and extensive plantings and landscape alterations.

Progressive Lawyer
and all around great guy:
Eric Gillespie
As a result, there were significant plantings along the boundary between the development and the Marymount Cemetery/Jesuit lands, including numerous mature cedar trees and the establishment of a “living wall,” created from growing willows. As part of the settlement, 6&7 also agreed to work with acoustical engineers on potential noise impacts and increased the height of the berm.

The group’s lawyer, Eric Gillespie (who represented RSD at the OMB) said after the settlement:
“These steps were not directed by the OMB—or by the courts. 6&7 has voluntarily agreed to assist with these measures. The fact that significant litigation around these issues has been avoided clearly benefits all of the parties, and everyone involved in the settlement deserves to be commended."

Walmart’s north end store finally opened in the fall of 2006.

Friday, December 9, 2016

Listen to My Interview with Adam Donaldson at Guelph Politico

The title just about says it all. Adam Donaldson at Guelph Politico is a real treasure in this city. Listen to us riff on the local news scene.  

If you haven't already, check out Adam Donaldson's website!

Tuesday, November 29, 2016

The Rise of Fake News

Executive Summary:

The news media has been going through rapid changes over the last 20 years because of both financial chicanery and technological change. In the recent US presidential election it was revealed that websites publishing totally fake news actually out-performed real news sites on social media. This article explains the forces governing these changes, explains the rise of fake news, and suggests that the same forces are at work in what remains of the local corporate media in Guelph. It ends with a suggestion that citizens need to support alternative media---such as Guelph Politico and The Guelph Back-Grounder---if they are going to retain anything like a real local news infrastructure.

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Yesterday I had a very fun interview with Adam Donaldson at the "Open Sources" radio show he does at CFRU. (When he publishes it on-line I'll tell you readers.) He mentioned in passing that it's been about a year since "the Mercury" folded. This led to a conversation about what is happening to the news business and the task of being an independent, self-employed journalist. Since then, I've been thinking a lot about where news is at in the 21st century.

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There have been a flurry of stories recently about the impact that fake news sites and social media had on the last American presidential election. The issue isn't that there is such a thing as fake news---after all The National Enquirer has been printing that sort of thing for a very long time--but rather the way social media encourages far too many people to believe that it is true. When The National Enquirer is published it has to go through a long supply chain to end up shelved next to your grocery's cash register. And the company has a long and carefully-crafted brand image that the customer knows about.

The story that your friends forward to you on Facebook is totally different. Anyone with a passing knowledge of website design can create a fake template that looks "professional" which suggests that it is a legitimate news organization that publishes real news stories. Moreover, whereas The National Enquirer has to negotiate with advertisers and have them pay up front to sell their wrinkle cream in amidst stories about the Loch Ness monster and the escapades of the Royal family, these websites can sign up with Google Ad Sense in fifteen minutes and not have to explain to any business person why they are publishing fake news.

In short, it has become very, very easy to create fake news sites and fund them with advertising revenue sources---even if you don't give a damn about whether what you are saying is truthful or not.   

The second thing to realize is that social media has created a huge readership base that is disconnected with the usual informal mechanisms that people use to judge the truth value of an information source. When I was young people had very firm opinions about newspapers, magazines, etc. I can remember my parents snorting about a specific newspaper and saying "oh that's just a scandal rag---you can't believe anything you read in that".  News organizations used to be afraid of destroying public trust in their organization, because if it ever happened, they would probably lose these readers for the rest of their lives. Getting caught writing blatantly fake news would be a disaster.

But nowadays many people only get their news from things like Facebook, Twitter, or, comedy shows. This means that they are receiving discrete "bits" of news totally devoid of a context. I don't know how many times I've had friends send links on my feed to stories that were out and out fake, and I easily showed why by accessing a fact-checking site like Snopes.

This happens for a variety of reasons.

First of all, when a story is recommended to you through a Facebook feed they all look the same. This is because of the mechanics of recommending stories.  You are encouraged to write a little introduction "I just saw this on the web and wow, does it ever explain why things are the way they are". Then when you put in the Uniform Resource Locator (URL) address, Facebook automatically selects a few lines plus a graphic image to identify the story. This "levels the playing field" in a way that confuses people used to assessing the truth value of a newspaper by looking at the masthead, the quality of the paper, the sort of font used, etc. If everything looks the same, then people never develop an unconscious ability to separate the authoritative and respectable from the questionable and disreputable.

Secondly, social media is social, which is to say that it has more in common with "small talk" at a party than a philosophy seminar at university. People at parties who try to pick holes in the opinions of other people are not "good guests" (which is why people often think that I am a huge pain in the butt.) What this means is that the vast majority of people---even if they suspect that a recommended story is baloney---will not respond to a piece of fake news by pointing out obvious inaccuracies. That's just not what "nice" people do!

Even worse, social media is also like a "party" in that it picks the "guest list" and makes sure that only some people---and advertisers---get invited. This is the infamous "echo chamber" effect. People tend to associate with people of like mind, which means that they are shielded from unpleasant people (like me) pointing out errors in reasoning or reliance on inaccurate information sources.

So while the ability to create fake news is easier than ever before, because it is spread by social media, people now have a much harder time identifying fake news as "fake" than they have had in the past. 

Beyond the "echo chamber" effect of people tending to clump together into groups of like minded individuals, Google AdSense has also created the new ability to individually craft advertisements to fit the specific browsing history of individuals. This means that when you or I look at the same site using the Google search engine, we see different advertisements---based on what the Google algorithm sees you as being interested in.  And in the last presidential election in the USA, it meant that the Trump campaign could "zoom in" on the people who were passing around and reading stories that slagged Hillary Clinton and buy advertising for Donald Trump to get out the vote.

Now this ability of advertisers to connect with a specific demographic---totally based on their reaction to "news" content---allows people creating fake news sites to make a lot of money. They did this by crafting news stories that would attract the sort of person they knew their advertisers would want to fund, and, by watching how often their stories ended up being shared in places like Facebook. And since they were making all of this stuff up anyway, it means that they could keep experimenting until they found a "sweet spot" that got maximum sharing and maximum ad revenue. The people who were able to do this made a lot of money. Some of the people who did so have been identified---one cluster are a bunch of teenagers from Macedonian, of all places! This "positive feedback loop" rewarded the fake news people and ensured that they continued to produce it.

  


(This teenager only identified as "Victor" is the editor of fake news site, "Total News". For the past several months leading up to the presidential election, fake news stories like the ones written on Victor's site flooded social media. From a "Daily Mail" story.)

This means that at a time when it is tremendously easy to create fake news, and extremely hard for ordinary people to identify it as such, there is a tremendous financial inducement for individuals to do so. 

In effect, we are facing a "perfect storm" where several technological innovations are creating a whole industry designed to pulling the wool over people's eyes. The result is the following trend. In the last American election fake news was shared more often than real news.

From BuzzFeed News
"This Analysis Shows How Fake Election
News Stories Outperformed Real News On Facebook"

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This alone would be bad enough, but the mainstream news organizations have been declining in quality for at least twenty years and are now at the point where it is extremely hard to believe that any of them are still worth defending. Again, this is the result of a "perfect" storm, one of a totally different type.

At one time local newspapers---like "The Mercury"---were tremendously profitable. This was because they had stable readership, a constant flow of advertising revenue, and, no effective competition. Unfortunately, various big business types like Conrad Black, Ken Thompson, etc, figured out that if you bought a small town newspaper you could dramatically improve profitability by laying off editorial staff without having any immediate discernible effect on revenue. So what they would do is buy a newspaper for more than it was worth given it's current profits, lay off a bunch of reporters, and, use reprinted stories from other news organizations and syndicated columnists to substitute for the lack of original, local content. By cutting editorial staff, the profits of the paper would go up to the point where the owner could pay off the investors that he borrowed from to buy the paper in the first place. Often, he would then sell the paper at a profit to another investor. Then the process would start all over again. When I started hanging around "the Merc" many years ago this process had just started and for about ten years the paper changed hands about once a year. And every time it did so, there would be fewer people in the news room.

This led to a tremendous decline in news content. But because subscribers and advertisers had nowhere else to go, most people just grumbled and "sucked it up" while venture capitalists bled their town's news infrastructure dry. Then along came the Internet. People found that they could access news on-line for free and advertisers found that they could target advertisements directly at the people most likely to want their products. This left the old news organizations in a terrible bind. Their only competitive edge---local, high-quality news content---had been destroyed by the years of cost-cutting to pay for junk bonds. This meant that they had no loyal customer base to support them, so their revenue effectively dried up and papers like The Mercury went out of business.

Venture capitalists had already destroyed the "brand" of mainstream media so when significant competition arrived from the Internet, mainstream media no longer had a loyal customer base to support them. 

What is left of the "legacy media" has been trying to adapt to the new reality. Unfortunately, the ways that they have tried to do so have only accelerated the decline in quality news collection.

One way to protect an existing brand is by hyping up individuals into "stars" and then building customer loyalty around them. Probably the best example of this corporate strategy is the way the CBC has been pushing specific "stars" such as Rex Murphy and Jian Ghomeshi, but there are other examples in the private sector such as The Globe and Mail's Margaret Wente. What the publishers are trying to do is two-fold.

Primarily, they are attempting to use a specific person to access tribal loyalty of a specific fraction of the general public. In the case of Murphy and Wente, it is obviously right-wingers who don't believe in climate change and who think that there is a class of "social engineers" who are out to change the world into some sort of socialist, "politically correct", dystopia. In Ghomeshi's, it was an attempt to draw in the young, urban, "hip" demographic that CBC radio had pretty much lost.

In all three cases, the decision seems to have been somewhat successful. Lots of people seem to like Rex Murphy, Jian Ghomeshi, and, Margaret Wente. The problem is, however, that when you hire people and make them stars based on "tribal identity" instead of their ability to actually do good research and reason clearly, you end up creating monsters. What is the definition of "stupid"?---someone who refuses to listen to evidence that contradicts their deeply held beliefs and cannot understand when someone points out the flaws in their thought process. I would argue that that pretty much describes someone who ends up being a media star aimed at a specific demographic. Creating media stars is a process of rewarding people because they are stupid in a particularly popular way.

So it turns out that Rex Murphy's inability to understand the truth of climate change has been greased by lucrative speaking contracts by the oil patch and our public broadcaster embarrassed itself by saying it's lack of action on a clear conflict of interest was because Murphy is an "independent contractor" instead of a "paid employee". It also turns out that CBC had invested so much into creating a star out of Jian Ghomeshi that they allowed him to treat the women around him in a way that would have led to a "less important" employee's dismissal within an instant. And The Globe and Mail has made it abundantly clear that there is absolutely nothing Margaret Wente can do in terms of plagiarism that will lead to her dismissal. The problem ultimately comes down to the story of the lady riding the tiger, once a media institution goes to the effort of building up a "star" personality, the name recognition (and the power that brings) belongs to the celebrity and not the organization. The conservative media in the US built Donald Trump up into a star too, but once they tried to reign him in, he ended up eating them.

The legacy media has attempted to stop it's decline by creating media stars. In doing so, however, it has accelerated the decline of accurate, high-quality content.

Another way that the existing media is attempting to stay alive is by throwing their objectivity out the window in ways that save them money. One recent example involved The Globe and Mail's Deirdre Kelly writing a glowing story about a Northern diamond mine without making any serious reference to local opposition---or stating that De Beers Diamonds paid for the trip. It even seems that Kelly may have actually received a "gift" of some diamonds from Birk's diamonds.  Wow!  A paper can save a lot of money if the expenses for their feature stories get paid for by outsiders. Indeed, it would appear that The Globe has a whole department called "the custom content group" who's job it is to write stories that accompany advertisements called "advertorials".

Actually, this has been a pretty standard activity in newspapers for a long time. The "Travel", "Homes", "Style", and, "Cars", features of newspapers have for a very long time been not much more than "advertorial" sections where "the custom content group" of your paper writes "puff pieces" in order to get advertising from airlines, real estate agencies, clothing retailers, and, auto dealerships. In addition, for a very long time opinion pieces on editorial pages have often been written by highly funded "think tanks" which are often not much more than propaganda organizations that exist to send slanted "free copy" to newspapers that are desperately trying to cut costs. What is new is the way this sort of chicanery is bleeding into the part of the newspaper that is supposed to be "fair", "balanced", and, "objective".

One of the points that Adam Donaldson made in our conversation was that he thinks that most of the people who were upset about The Mercury going out of business seem to have accepted that the new replacement, Guelph Today, is an adequate substitute. I have to disagree. The old corporate media did not serve our community well, and I see no evidence that it will do much better of a job in a new "post-paper" age. People should think about some of the issues that I've raised in the above essay.

Guelph Today is completely paid for through advertising. This means that it's primary loyalty is always going to be to the advertisers, not it's readers.

Secondly, it's revenues are based on traffic at the website, not a fixed payment per advertisement. This means that there will be constant financial pressure on reporters to write more and shorter articles instead of longer, in-depth ones. If a story is 10,000 words long, it will get just as many clicks as one that is only 100 words long. And if a reporter writes 100, 100 word articles the paper will make 100 times as much advertising revenue for them as it does for one 10,000 word story. This is a prescription for "dumbing down" the readership, as complex ideas encompassing new information simply cannot be written in short, snappy articles.

Finally, if you look at "Guelph Today" you can see that at the end of every story there are buttons that encourage people to share the story on Facebook, Twitter, or, email. (As there are on mine.) This means that part of the advertising strategy of news organizations like "Guelph Today" is to encourage people to share the stories through social media. If they want to "hit the jackpot" (like those kids in Macedonia) and make a lot of money off a story, they are going to have to get a lot of people to share it. And, the last US federal election has shown the best way to do this is to craft sensationalist stories that appeal to a specific tribe of people who already have strong preconceived notions. If a corporate, for-profit business uses the same tools and revenue source as the purveyors of fake news, how long is it going to be before they start following the same strategy in order to pay off investors?

This is why I believe that the people of Guelph should be supporting initiatives like Adam Donaldson's Politico and The Guelph Back-Grounder. This is actually in some ways an interesting time. The new technology of the Internet has "leveled the playing field" in some interesting ways. It really doesn't cost much to put out a news magazine anymore. Equally important, through Patreon and Pay Pal, it is possible for a "little guy" to raise money off content without onerous bank fees eating up all the revenue. But people are going to have to want to support projects like these through subscription fees. Why not advertising? Well, if you have read the above article, you should probably have seen that underlying just about every problem that I have identified is the pervasive and pernicious influence of advertising. If you read an on-line news source for free, YOU are the product for sale, not the story. Even if you aren't looking at advertising, your information is being collected, packaged and being sold to advertisers. If you pay for what you read, then you are the ultimate boss, not some corporate marketing directory.

This isn't to say that Politico and the Back-Grounder are aiming to put corporate media out of business. We aren't going to make the CBC irrelevant either. But if the community decides to financially support "outsiders" who bring informed, newsworthy stories to the community, they can act like "scrappy little dogs" who can keep the bigger "media oxen" from trampling the community into the ground. If you find my argument convincing, take a look at the two buttons on the upper right of page and figure out how much you can give to support the Back-Grounder. And if you can't afford to give me money---something I understand completely---share the Back-Grounder on social media, add a button if you have your own website, subscribe to me on twitter, or do something else to spread the word about the site.





Sunday, November 13, 2016

Deconstructing My Electricity Bill

Executive Summary:

Some elements of our society have recently been pushing the meme that Ontario electricity rates are far too high and that the reason why is because of a Quixotic attempt by the current Liberal government to support solar and wind power. This article shows the real issue isn't rooftop solar, but rather the need to upgrade our obsolete transmission system into "smart grid" technology. It also suggests that the people who are suffering the most by attempts to make people pay the real as opposed to a subsidized cost for their electricity use are a class of rural poor. As a social policy issue, the author suggests that the rural poor would be much better served by a guaranteed annual income program rather than an immensely expensive subsidy for the entire population's energy use. 

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Deconstructing My Electricity Bill 

I've been hearing a lot of complaints lately about how much electricity costs. Moreover, the people complaining have been aiming their anger at the attempt by the provincial government to move towards a post-carbon society. On the other side are people who say that electricity isn't really all that expensive in Ontario, and that special contracts that the province has been handing out to encourage solar and wind production have nothing at all to do with what increases have happened. I suspect that a lot of people don't really know what to think about all of this. And frankly, I'm one of them. I thought that I'd put some effort into trying to learn what I can about electricity and share that with my readers.

It occurred to me that the place to start with this inquiry is where everyone else does, my electricity bill.



It should go without saying, but unfortunately some people are confused about exactly what they are paying for, so they confuse the water charges with electricity. So it's important to emphasize that the two are totally separate. (I own a duplex and share with another couple. So this water bill will be cut in half. That means I owe $21.40 for water.)

Remember, subtract the water charges from the bill total!


Electricity bills come in monthly, so this means that I had to pay Guelph Hydro $46.61 for electricity in the month of October.

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This raises the first issue that comes to my mind when I hear people complaining about electricity bills. I've heard folks say that they pay hundreds of dollars in electrical bills each month. Frankly, I don't understand what they are doing. I am not some sort of hermit living in a cave. I am cautious with energy use, but I do have a very pleasant 1100 square foot home. I have an electric range and cook almost all my meals from scratch. I do have high efficiency electric lights and try to turn them off when not necessary. But I also have an aquarium pump that runs constantly, a pellet stove, and, a gas boiler---all of which run on electricity. My computer runs constantly when I am awake and at home. I also have a new refrigerator that isn't even rated as an "energy star" appliance----but it is only 12 cubic feet in size. I do not have air conditioning, however. And I did spend 15 or so years totally gutting and rebuilding my 100 plus year old home into an R-2000 compliant structure. This means that I can get away without having air conditioning in the summer (or at least until climate change makes summers unbearable without it.) Oh, and I don't have a clothes dryer---I hang stuff up outside in the summer and inside in the winter.

The wild disconnect between my bill and what I am hearing in casual conversation and in public discourse seems to indicate to me that some folks are living very different lives than I am. I heard a phone-in show, for example, where a distraught woman called in and said that she was having a terrible time paying her electricity bills. It came out in the conversation, however, that what she had done was rent a drafty, decrepit old farm house (because the rent was cheap) and then attempt to heat it with electric baseboard heaters.

I remind myself to be compassionate and tell myself that I don't know anything about this woman and what aspects of her life brought her to where she is now, but I am perplexed by someone who moves to a drafty old farm house and attempts to heat it with electricity. When I was a child my family lived in one of those old barns. It got so cold in the winter that some of the bedrooms actually got frost on the wallpaper during especially cold nights. We all wore thermal underwear. When I sat up at night doing homework from school, I sometimes wore long-johns, shirt and jeans, a heavy sweater, a wool hat and gloves while I tried to figure out physics problems.

Generally, those old farm houses were laid out on the assumption that in the winter people spent all their waking time in the kitchen around the wood stove. The kitchens were usually one of the biggest rooms in the house and generally had easy chairs and couches in addition to kitchen tables and counters. As well, farm houses were well supplied with things like Hudson's Bay blankets. We had this old silk and eider-down comforter for one of the beds that was so hot that it was useless except on those nights where the frost was on the walls.

No one in their right mind would attempt to heat a home like this with electric baseboard heaters. Most country folk had a maple bush, chainsaw, cook stove, and, heated with wood.

OK. Now let me get off my "high horse". If someone is going to heat with electricity in a drafty old farm house, is there any especial reason for them to be angry about the price? Well, it turns out there is. Take a look at the actual charges on my bill.

My bill, but not the same bill as someone in the countryside!
More than half of the charge is for "delivery". This is important, because it turns out that the delivery charges for someone who lives in the downtown core of a city are significantly lower than for someone who lives in the countryside. According to HydroOne's own site, there are three different classes of electricity customers. 
  • People who live in high-density areas and who have at least 3,000 customers with at least 60 customers for every kilometer of transmission line
  • People who live in medium-density areas with at least 100 customers and 15 per kilometer
  • Low density areas that lack 100 customers and less than 15 per kilometer
If you live in a low density area, that delivery charge of $22.58 turns into $43.32.  The difference between that woman on the radio's basic delivery charge and mine is $20.74. Moreover, for every kilo Watt hour (kWh) of electricity I use, I am charged 1.60 cents in per use delivery charges, whereas she has to pay 4.27 cents. I cannot see this per unit charge on my bill, so I can only assume that it is included in the gross charge per kWh. I used a total of 148.52 kWh last month, and the difference between the her per use fees and mine is 2.67 cents per kWh. Multiply the difference by the kWhs I used last month, 148.52, and you get $3.96 cents extra to add to my bill. Add these two extra charges to my bill, and you see that if my home were magically transported to a more remote part of Wellington county, the bill would now be $65.95.

(I double checked this information by looking at an electricity bill from a neighbour who has a cottage in the Sauble Beach area. It was a "Hydro One" bill, as opposed to Guelph Hydro. the total electricity charges were $103.80, plus $186.00 for delivery, plus $6.66 "regulatory charges", plus $4.71, plus $39.16 for Harmonized Sales Tax (HST). This brings the sub-total to $340.37. From which $24.76 was subtracted for "Ontario Clean Energy Benefit". The final total owing was $315.61.)

Now let's assume that that woman on the phone was using ten times as much electricity as I am. (I'm just pulling this out of the air, but baseboard heaters draw a lot of juice.) Let's assume that we both used 1500 kwhs, and that all of this came at the priciest fraction of the time of day. In my case the price plus transmission costs would come to $316.58, in her's $377.58.  Now frankly, I don't know if 1500 kWh comes even close to being realistic in describing how much that woman uses to heat her farm house. I do know that when I purchased my home (about 20 years ago), it was a drafty, uninsulated barn that was heated with electric baseboards. The first thing I did was rip them out and replace them with a high-efficiency hydronics system because---growing up in the countryside---I was horrified at what the electricity bills would come to if I didn't. 

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It would be easy to point fingers at the people who try to heat their homes with crazily inappropriate electrical heating systems. But that would not only be unkind in many cases, it would also often simply be inappropriate. It is possible to find yourself in a situation where you are "stuck" for one reason or another, and it is impossible to claw your way out of it. To illustrate this point, consider the cautionary tale of one of my university room mates.

I met "Dave" in grad school. He was a nice guy, gentle, soft-spoken, articulate, and cultured. He was getting by---like me---on a teaching assistant's stipend and student loans. He lived at the Albion Hotel (it still rented rooms then), but the other folks there were driving him nuts. (The next room had a couple in it and the man beat his partner on a regular basis and Dave hated to have to listen to it.) I was renting a house and subletting rooms to students, so I asked him if he wanted to move in. He was happy to do so.

Eventually, I got to know something about him. It turns out that Dave had come to Guelph to serve time in prison. Yes, Dave had some very interesting history. He'd had a job at a factory in K/W but had got laid off (it was the early eighties and jobs were a lot harder to get then than they are now.) His family had totally disowned him because he had come out of the closet as being gay, and they were all supporters of some flavour of Christianity that translates "Jesus loves you" into "God hates fags". After a fruitless period of time trying to find work, he pretty much lost hope of ever finding a job. At that point he found out that if you moved to a small rural village the rents were a lot cheaper than in the city. So he decided that his unemployment insurance cheques would go a lot farther there than in the city.

Unfortunately, the pogey stopped coming and Dave was starving. He went to the local welfare office, and it told him to go back to the city. (At that time welfare for single, young men in most towns was a one-way bus ticket to the nearest big city.) He also went to the local churches asking for a hand-out. They told him to "bugger off" too. (That whole "God hates fags" thing possibly had something to do with it.)  Eventually, Dave decided that the only way to avoid starvation would be to go to jail, so he broke into a church, set it on fire, and, sat playing the pipe organ until the police arrived.

Dave had psychiatric issues, no doubt about it. But they were dramatically accelerated by poverty and the way society treats people who make bad life choices. And in the same way, that woman who decided to save money by moving to a country house with "cheap rent", is probably equally stuck. And my friends tell me that rural areas are filled with people who are just hanging onto life by their fingernails. And the increase in electricity transmission costs are devastating to them. The thing to remember is that lots of people are standing in water up to their noses. The slightest increase in the depth is enough to drown them.

&&&&

The problem is, however, that there really good reasons why the transmission cost should be higher in the countryside than in the city. Actually there are a lot of good reasons---. First, let's start with a history lesson.

On Thursday, August 14th of 2003 I was at work and the electricity went out. It was a hot, sunny day and a little voice told me "the provincial conservatives just lost the next election---". I was so sure of this that I actually told the other people in the room about it, who probably thought I was being my usual nutty self and brushed it off. Well, I was right. You see their government had refused to reinvest in the electricity infrastructure well past the point where they should have, and what the engineers had warned them could happen, did. We had a catastrophic power outage that lasted a very long time. In my case, the power was off for about a week (my block was one of the longest out of service in Guelph.)

Reporters portrayed the black out as being caused by a "software problem" in an American local utility. But that was just the eventual straw that broke the camel's back. The real problem was that electricity rates had been reduced to a political football and politicians refused to force consumers to pay the real cost of building a safe, resilient, dependable system. Instead, they took the easy route of avoiding expensive upgrades and kicked the can down the road.

This experience taught at least some people that a good electrical system is not just a question of cheap price, but also one of reliability. And for an electrical distribution system to be reliable, it needs to be resilient. And that comes from two things:  distribution of generation and redundancy of distribution pathways. To understand this, consider two different ways of generating electricity, a giant centralized nuclear reactor complex, or, thousands of solar and wind units spread across the entire province. In the former, the entire system collapses if there is a problem at the one site. In the latter, it is hard to conceive of any event that would wipe out all activity across the entire province. Equally important, if there is one centralized power generation place, power transmission will be centralized into a few corridors of high tension wires. Knock out those wires (like what happened during the massive ice storm of 1998), and people can lose their electricity for months.  

Oops! I wish that we'd paid a few extra bucks and put in some solar panels.
NOAA Photo Library, National Weather Service Forecast Office Portland ME

In addition, if you distribute power generation across the entire province you create problems for maintenance. Think of it this way:  before rooftop solar panels, if a lineman wanted to do some work he would just cut off the flow of electricity from the local transformer station and the wires past that point would all be safe to work with. But with the odd house having solar panels, each of those is putting electricity into the grid, so to work on a wire he is going to have to isolate each of those rooftop generating units from the line too.

The way to deal with these issues is something call the "smart grid". Here's a useful YouTube video from the US department of energy that does a good job explaining it. 



As you might imagine, upgrading the electrical system to a province-wide "smart grid" is not cheap. Moreover, it gets more and more expensive per person in rural areas.  This is simply a case of mathematics. It is cheaper, per person, to build a system where you have over 3,000 customers and more than 60 people per kilometer of wire, than where you have less than one hundred and less than 15 per kilometer. This is the same problem that governments face with sewers, telephone lines, water, and, roads. 

Unfortunately, there is a body of opinion in our society that says that government should use tax dollars to prop up unsustainable and grotesquely inefficient lifestyles instead of trying to get people to live more sensible lives. That's why some folks continue to argue for suburban sprawl instead of higher density cities, and, personal automobiles instead of public transit. It's also the attitude that fights tooth and nail against toll roads and raising water rates to the point where we can afford to pay for the cost of fixing worn-out pipes. I suspect that most of the folks who complain about this really don't understand the issues at stake and don't even want to understand what is going on. Instead, they are having a temper tantrum aimed at a world that seems indifferent to the inconvenience it is causing them. Sad to say, there a lot of "big children" in this world who's only response to the unexpected and unpleasant is knot up their fists and start yelling. If a politician decides to pander to their emotions, they can get a lot of votes---but the ultimate results are usually very bad for everyone. (Hence the blackout of 2003.)

It is insane to expect the average tax payer to subsidize ever single person in the province who buys electricity so a small number of poor rural users can still afford to waste electricity in drafty, poorly insulated houses. What does make sense is to charge the real cost of living in the countryside and increase the social safety net to the point where people don't move to the countryside in the mistaken idea that they can "live on the cheap" there. Many people who do have the wherewithal to afford it will probably opt out of the power grid altogether and instead purchase solar panels with a battery back up. Others will probably just "suck it up" and accept the increased costs as just part of living in the boonies. But lots of marginal folks should be encouraged to move to the city where there will be lots more services to help people with whatever problems have led to their living in dire rural poverty in the first place. Ultimately, the only people who really should be living in the countryside are people who work there such as farmers, loggers, etc. All the folks who live in the countryside and commute long distances to work are ultimately being subsidized by other tax payers. Which is why some rural areas have had big fights with people who own winterized cottages and expect the country to plough the snow off their roads in the winter. 

I suspect that the Liberal government understands this point, which is why it has committed to creating an experiment to figure out how well a guaranteed annual income will work. The reasoning is that it makes more sense to give the small number of poor people in our society some money rather than to create universal subsidies that keep the cost of things like electricity artificially low for the entire population. Not only would universal subsidies be an insane misallocation of scarce resources, it keeps people from changing their lives to be more in keeping with the physical reality that we face as a species. We simply can no longer afford this sort of behaviour in the face of the existential threat of climate change.

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One other thing that I often hear is that the reason why power costs have gone up is because those long term energy contracts that the provincial government awarded to home owners. What they are referring to is the Green Energy Act of 2009 that creates special contracts (called "Feed In Tariffs") that were designed to encourage people to invest in the newly emerging sustainable energy industry. When it was first introduced, the hardy folks who signed the first contracts for roof-top solar panels were promised 80.2¢/kWh! What!!!!!  Why would the province offer to pay such a huge amount of money?  Looking at my electricity bill I only have to pay as little as 8.7 cents per kWh.  Where is the difference coming from?  Those damn, spendthrift Liberals are at it again!!!!

Well, that number that I looked at on my bill is an average, which is why there are three different prices listed on the bill:
  • On Peak Summer @ 18.0 cents per kWh
  • MidPeak Summer @ 13.2 cents per kWh
  • OffPeak Summer at 8.7 cents per kWh
These, in turn, are averages. If you really want to see how much the cost of electricity fluxuates, you have to look at the Ontario spot market. Luckily, you can actually see this on-line at the Independent Electricity System Operator (IESO) website.  (The prices that this website quotes are not a final cost for consumers like you and me, so don't try to compare them to your own bills. All it is necessary to see is that the cost of electricity does fluctuate wildly from one part of the day to another.)

I am told that the absolute highest price for electricity on the spot market happens during hot, sunny days in the summer. That's because the biggest load on the system are air conditioners.  Moreover, when electrical transmission wires get hot (from the sun) they become more resistant. This in turn, makes them heat up. In addition, when they have a lot of power being drawn on them, they also heat up. This leads to a vicious cycle---wires getting hot makes them give off more energy as heat, which makes them tend to give off more heat when heavily used. (See this article that explains this phenomenon.)

There are two things about rooftop solar panels that make them specifically useful to deal with this problem. First, solar power creates the greatest amount of energy exactly when it is most needed to power air conditions. Secondly, because it is being created in residential neighbourhoods, it is being used almost exactly where it is being created. This means that it doesn't have to travel long distances over over-heating transmission lines. What this means is that a kWh or rooftop solar power is actually worth a lot more to our electrical grid system than one from Niagara Falls or a nuclear reactor.

In addition, the feed-in tariff system was never designed to be a permanent part of electrical generation. What it was intended to do was to liberate large amounts of capital sitting in people's retirement savings and use them to build both electrical---and equally important---human capital. I know quite a few people who looked at the returns in the feed in tariff contracts and decided that they were so much higher than what they could get in other investments that they took the risk and put in solar systems. If those guaranteed contracts weren't there, they simply would not have done so. And if the government or Ontario Hydro had wanted to do the job themselves, they would have had to borrow huge amounts of money to pay for it. Moreover, when my friends installed those systems they hired people who had made the significant effort to learn new skill sets and set up companies to install these new rooftop solar systems. If the feed in tariff had not existed, this whole new industry would not have been created. Now that the industry exists, the cost of installed systems has dropped so much that the government has been able to drop the guaranteed price that Ontario Hydro pays for the electricity created by rooftop solar. (The current promised rate for new construction is 28-38¢/kWh.) But without those initial contracts, this would never have happened.

(Addendum:

Since I published this post it has been pointed out to me that I should have emphasized how small a fraction of the entire electrical generation capacity of Ontario solar power continues to be. Looking at the IESO website this morning I saw the following breakdown in generation:  Nuclear 9,859 MW, Hydro 3,713 MW, Natural Gas 1,112 MW, Wind 1,146 MW, and teeny tiny solar comes in at 149 MWs. And this on a bright, sunny day when I don't see a cloud in the sky! It is profoundly dishonest to blame the increased cost of electricity on the feed in tariff system.)

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Electric policy in Ontario is a huge issue that requires a lot of expertise to really understand. The above only just starts to scratch the surface of the issue. But I am really concerned about the way the political parties and mainstream media have been dealing with this file. They all seem bent and determined on confusing the general public in order to get their support in the next election. And electricity is tremendously important in our race to move towards a carbon neutral society. I never hear anyone talk about the importance of the "smart grid" or the "spot market" or any of other issues I've identified above. Instead, I just hear whining about "electricity is too damn expensive" mixed with weepy stories about some person in a rural area who has to choose between food and paying their bill. I don't know why the debate is so shallow, perhaps it is just too complex for most journalists and politicians to really understand. I fear that at least some of the time these folks do understand and they just don't care because their convenient falsehoods help push their selfish, short term agenda. The result is the same, though. If we cannot think rationally about our electrical policy, it will spell disaster for our province.

Sunday, October 23, 2016

The High Cost of Free Parking in Guelph

Executive Summary:

One of the forces that is most influential in creating low-density, carbon-intensive, and, extremely expensive cities to live in are parking regulations. Unfortunately, their pernicious influences are pretty much invisible to most voters. This article shows how regulations hidden within Guelph's planning regulations add tens of thousands of dollars to the cost of condominiums, raise rents significantly, prevent the creation of walkable urban neighbourhoods, and, ruin public transit. 

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 The High Cost of Free Parking in Guelph

"The right to have access to every building in the city by private motorcar, in an age when everyone possess such a vehicle, is actually the right to destroy the city",  Lewis Mumford 

Lewis Mumford
Primitivojumento,
 Wiki Commons
During my Quixotic attempt to run for Guelph Council, I found that the one issue guaranteed to generate the most phone calls was parking. People get absolutely enraged when they receive a parking ticket. And no more vicious and brutal animosity seems to be created than a battle between two neighbours over a parking spot. Since I've never actually owned a automobile (although I had two motorcycles and a moped), I've always found this emotional commitment hard to understand.

After working through parts of Donald Shoup's encyclopedic The High Cost of Free Parking, I think that I am starting to "get" parking.  The key issue is the assumption that anyone who has made the investment of buying a car believes that they automatically gain the right to free parking for as long as they own it.

It's easy to see how this idea came to be. At first, cars were just something that rich people had. And this meant that there was plenty of space at the side of the road for them to park. And since rich folks tend to live on large properties, there is generally a place for them to store their cars. The problem with parking only started when cars became very popular.

When middle-class people started to own autos, a new business was created in large cities---commercial parking garages. These places stored your car when you weren't using it. They came about because existing apartment buildings---being built in the pre-automotive era---didn't have parking spaces provided for tenants. In fact, if you watch old movies you will often hear dialogue or plot devices that hinge around the fact that a person has rented a space in another building to store
Donald Shoup by his permission
their car. When these middle-class folks went downtown, they found that most businesses didn't have parking either. This meant that they either parked at the curb---if they could find a space---or paid a fee to park in a private, for-profit, parking lot. Since there was no guarantee that they will find a space at the curb, or a lot near where they were going, they often decided to just take a cab or public transit. People didn't hop in their cars to go downtown, because parking was often too much of a hassle, so cars were not only less commonly owned, they were used less often.

Enter the planning departments of all North American cities. They decided that if lots of people were going to drive cars, then there had to be places for people to park them. This wouldn't have been much of a problem if drivers had been forced to pay the actual cost of parking. This would have meant that a few more privately-developed, paid parking garages and open-air lots would have been built.

Unfortunately, what happened instead was that planning departments all across North America decided to force every single new building to provide free parking for the people who rented apartments, bought condos, went to the library, worked at an office tower, ate at their restaurants, or, shopped at stores. For a variety of reasons, this has proved a disaster for cities.

All this parking dramatically increased the cost of building a new structure. When someone decides to build an apartment building, for example, they have to build not only the apartments, but also the parking that goes with it. If the apartment complex is built in an area with cheap land, then the parking can go outside the building on a basic lot. But it also means that the developer has to purchase a much bigger lot. There are other costs too, such as snow removal in the winter. All of these costs are passed on to the person who rents an apartment. This means that the parking isn't "free"---it's just a hidden cost that everyone has to pay, whether they drive or not.

Now consider a situation where planning doesn't force developers to provide "free" parking. As I mentioned before, this situation used to exist in apartment buildings that were built before the rise of the automobile. In this situation, a person who decides to live in this apartment complex and also decides to purchase an auto will be forced to find a garage or lot to park his vehicle and pay a monthly fee to do so. This also means that anyone who lives in that apartment building and who doesn't choose to own a car no longer has to subsidize the guy who does.

There is another, very important element to this issue. If a developer doesn't have to provide parking for his customers, he can dramatically shrink the size of the lot that he has to purchase. This means that it will be easier to do "in fill" development. It also means that the density of the community will rise. This will mean that the city can save money on servicing the properties. It will also increase the viability of public transit, which will lower the need to own a car in the first place. With more density, there will be more places that a renter can walk to to shop, work, or, socialize. And with more viable transit, there will be more frequent buses, which will make that option more convenient too.

&&&&&

It is hard to define the cost of a generic parking spot. This is because a large part of the cost comes down to the cost of the land---which not only varies widely from city to city, but also from
neighbourhood to neighbourhood. Also, in parking structures the cost per unit is going to change based on the size of garage---simply because of the economies of scale. But Donald Shoup has come up with an approximation that will helpfully give us an "order of magnitude" to understand this issue. (All that follows comes from Chapter 6 of The High Cost of Free Parking, "The Cost of Required Parking Spaces".)

Shoup analyzed fifteen parking structures that were added to the University of California, Los Angelos (UCLA) between 1961 and 2002. He reasoned that he could ignore the land cost element of the price by calculating the number of cars that could be parked just on the footprint of the land that the building sat on, and subtracting that from the total number that could be parked in the finished structure. That net result would divided into the cost of the building (less the land acquisition price) would be the real cost of each parking spot. He then factored in inflation to come up with a price per car based on standard 2002 dollars. Since parking structures are pretty much the same in Ontario as in California, this will give us a number that is probably the same here.

In Shoup's analysis, above ground parking at UCLA came to $14,500/added space, in 2002 US dollars. Using inflation and currency converters from the Internet, this converts to $19,400 in 2016 US dollars, and $25,400 current Canadian dollars per parking spot.

One complexity that needs to be understood is that above ground parking is a lot cheaper than below ground parking. But in very dense areas developers often put below ground parking into their condominium and apartment developments, so it is very important to separate these two costs. Shoup parses out this number by looking at five different below ground parking structures and came to the following number of $25,800 US in 1998. This converts to $38,100 US in 2016 and $49,900 current Canadian dollars, per unit of underground parking.

Of course these numbers are probably a bit off one way or another. But I suspect that they do give a rough idea of how much the cost of parking adds to every building.

Now, let's look at the Guelph planning regulations vis-a-vis new apartment and condominium construction. According to the General Provisions of the Guelph Zoning Bylaws, Section 4.13, the minimum required parking spaces per unit are 1.5 for the first 20 units, and after that, it is 1.25 per unit. Since I cannot see any separate listing for condominiums, I will assume that the same rules apply. This would suggest that a condo tower or apartment with seventy-five units would require 99 parking spaces (that is 20 times 1.5, or, 30, plus 55 times 1.25, or, 68.75 or 69. 30 plus 69 equals 99.) Since space is at a premium in downtown Guelph, if they go there, these towers would have to build parking garages. At this point, by plugging in Shoup's numbers I can calculate that if they are above ground the parking spaces would cost $2,514,600 and would add $33,500 to the price of each condo or apartment. If the developer has to do below ground parking, the total cost would be $4,940,000 or $65,900 per unit.

Seeing those numbers explains to me at least part of the reason why condos cost so much!  It also probably has something to say about rents.



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These regulations raise the costs not only for housing, but also for businesses. And office building (like the Co-Operator's) requires one space for 33 square meters of "Gross Floor Area" (GFA), 16.5 square meters in a retail establishment, 7.5 square metres in a restaurant or tavern (think the Albion), and, 9 square metres in a take-out restaurant (think MacDonalds.)  It also says that Hotels have to provide a space per room plus one per 10 square metres of space open to the public (I assume things like restaurants and bars.) It also says that if a developer wants to build an apartment over top of a business (like most old downtowns), each unit must provide an off-street parking space per unit---in addition to the spaces it must provide for the business (see  4.15.2.4.)

I won't try to come up with estimates of how much these spaces cost, because that would involve an analysis of land costs in Guelph, which varies from neighbourhood to neighbourhood. The zoning regulations do set out in great detail---depending on area---the minimum size of a parking space (from 3 metres by 6 metres, to, 2.5 by 5.5.) They also prescribe "set backs" plus rules governing access to each spot, which add space requirements. Also, above a certain size of lot, a certain number of handicap spaces need to be offered.

To put this into a context, the old downtown Budd's building is currently listed as on offer for leasing as office space, with 16,606 square feet.  This converts to 149 square metres, which would require 5 parking spaces (the zoning regulations say that partial numbers are always rounded up to the next whole parking spot.) If Budd's were being newly build as a retail space, it would be required to provide 10 parking spaces. What this means is that if you want to build a new store like Budd's, you would have to provide a parking space that would be at least 180 metres square. But that number doesn't include required set-backs and access lanes, which might add as much as one third more to the size of the lot, making the ultimate size about 240 metres square.

In it's present configuration, the Budd's building has a basement. If a developer was going to build a new structure like it, he would be purchasing much cheaper land outside of the downtown core, which means that he probably wouldn't be building basement space into it, as this is only done when land costs go above a certain amount. So I'd suggest that probably this new store would probably only be two stories at most, which means that a 149 square metre store would probably end up having a footprint of 75 square metres at the very least. It would be fair to say, therefore, that the parking regulations would result in the developer having to assemble a lot that is at least 255 square metres, or, 2744.8 square feet. This is also how parking regulations dramatically lower the density of cities.

As a result of these parking regulations, it is effectively against the law for anyone to build a store like the old Budds, Ackers, and, other downtown businesses. The only way they were able to survive as long as they did was because they had been "grandfathered" as legal, non-conforming. If anyone wonders why we have big, sprawling cities that are too low density to have a proper public transit system, the answer is simply that it is against the law to build them any other way. The laws that force businesses to do this all come down to parking.


The old Budds store. It would be totally illegal to build something like this today.
Photo by Bill Hulet

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If we are ever going to build the sort of higher-density, sustainable cities we are going to have to stop forcing all developers from having to devote enormous amounts of resources to providing off-street parking. The fundamental problem is a misallocation of resources. People who do not own a car, and have no interest in ever owning one have to pay as much as $74,000 extra on their condo unit simply because our zoning assumes that everyone will own a car. The fact that most people who buy condos in the downtown do so specifically because they don't want to have to drive everywhere is completely lost on these regulations.

Of course, there are going to be people who really do want to own car and have a parking space in their building. But the way to deal with this problem is to let the people who want to drive cars PAY for the privilege instead of forcing everyone who doesn't to subsidize their lifestyle choice. Developers will learn how many units that they actually need in a building.  If they build too few, they will suffer. If they build too many, then they will get "stuck" with spaces that they will have to rent to outsiders. Some business people might see an opportunity and build parking garages outside of condominiums in cheaper parts of town for the people who will be happy to use transit for commuting and just drive on special occasions.

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The obvious response to the above suggestion is that people will drive cars without paying for a parking space and businesses will have customers with no place to park. The result will be total chaos. The essential answer to this problem is to allow the marketplace to set the price.

The best way to understand this point is to consider the lowly parking meter. The first thing to
Let this light your Way!
Lorax, Wiki Commons
realize is that parking meters are not about raising money. Instead, their job is to ensure that people who really want to park on the curb will be able to find a spot. Consider the number of parking spaces that would be free in downtown Guelph if parking were totally free. The fact is that the folks who work downtown would park their cars on the curb and the "lot" would be full all day long. The other option to consider is what the curb parking would look like if the meters charged $20/hour---there'd be no problem at all finding a place to park. The issue is to figure out what to charge to find the "sweet spot" where there are always going to be spots available, but you aren't chasing away everyone who really does want a place to park.

Traffic engineers have done studies and found out that there actually is an optimal amount of curb parking usage. According to Shoup, they suggest that one in seven spaces (15%) should be free at any given moment. This amount is probably going to be high enough during peak times of the day to ensure that if someone wants to park their car for extended periods of time---like an entire eight hour shift---they won't be willing to pay that much money. As a result, they will seek out lower cost alternatives, like either taking transit, car-pooling, or, finding a lot with lower charges.

There will be "hardy folks" who will attempt to bypass the free market by parking at the curb in surrounding residential streets. There are ways to discourage this behaviour too. Locals who live in the area could be issued passes that allow them and visitors to park at the curb. Anyone without a pass on their dashboard would be subject to fines. What if someone decides to rent out or sell their pass? No problem! The amount that they charge the person parking is itself part of the marketplace. The only thing that the city might want to do is to take steps to prevent counterfeit parking passes and to publish a "going rate" for passes to ensure that people charge enough to ensure that same 15% turnover that will ensure that there are still spaces when the locals need to put their car on the curb. (Presumably this will be significantly less than the downtown rate because of the inconvenience of having to walk downtown after parking.)

If you really want to get fancy, the meters could all be controlled electronically to allow the city to charge different rates at different times of day. Obviously there are going to be "busy" and "slow" times. The rates needed to keep 15% of the spaces open will be different at different times. There may be variation from one day of the week to another, and perhaps from one season to another.
Hi-tech parking meter!
Wiki Commons
"Smart" meters would be able to keep track of all that information and help parking departments keep up with change. They could also be linked to cell phone apps that would help motorists find the spaces that are open and pay for the time that they wish to park.  

The important issue is that people who drive cars would begin to start understanding the real cost of having to provide parking for their vehicle. The flip side is that anyone building apartments, condos, burger joints, or, dress shops would no longer have to create parking spaces that people may or may not want to use. At first, this probably wouldn't make much difference, as most businesses would be afraid of losing customers who couldn't find a place to park. But eventually some plucky pioneers would decide that the savings in cost would be worth the risk. They might even put some apartments over top of the store to augment the income from commercial renters. Some business people might decide that they want to live upstairs from their business.

The first places where this might happen would probably be at spots where there is a lot of public transit. Some place on the Gordon street transit corridor would be a good spot, perhaps. There would probably have to be some sort of direction from City Hall. Perhaps a consortium of business people could plan a new secondary "downtown" for the city where the goal is a walkable neighbourhood. It could be specifically aimed at that fraction of the population that really doesn't care to own a car. This might be a mixture of those young "hipsters" who aren't interested in cars and older "boomers" who are retired and don't want the hassle anymore.

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One thing that probably is going to make this transition happen even faster is the rise of both Uber and self-driving cars. The government of the USA is "fast tracking" the introduction of self-driving cars, this means that they are probably going to quickly become part of the landscape here in Canada. And this is going to mean a great deal to parking. When they become an accepted part of society, a lot of people are going to have apps on their phones that will allow them to call for a self-driving car that will pick them up and take them wherever they want to go. This means that they really have no reason at all to own or park their own car. This means that there will no longer be as many people who need a parking space where they live or work. It also means that when they go shopping instead of parking a car, they will just get let off and call for another one when they are finished. In the interim, the cars will be off driving other customers around instead of sitting in a parking space gathering dust.

This won't be much different from calling a cab, but they will be cheaper. This is because they will have all the same upfront expenses but without having to pay for a driver. Since running your own car costs something like $10,000 a year in Canada, increasing numbers of people are going to start asking "why do I have to pay all this money, plus grotesquely-subsidize parking fees in the price of everything I buy, when I can just take transit or push an app on my phone to get a car?"

A Google self-driving car---the final nail in the coffin for subsidized parking?
Steve Jurvetson from the Wiki Commons

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This issue of where parking is going is tremendously important for Guelph's future. Right now the city is developing a parking master plan for the future of the downtown. As the city website says:

Through the Places to Grow Act the Province of Ontario requires increased population density for communities including downtown Guelph. As well, over the next 16 years the number of people who work and live downtown will double from 8,000 to about 16,000 people and jobs and as a result there is a need to plan to have sufficient parking for people living, working and visiting downtown.
Public parking infrastructure downtown has not increased since 1983 when Guelph had a population of 70,000 and as a result, on-street parking and parking lots in the downtown core are at capacity. To accommodate downtown population and employment growth targets, an additional 1,300 to 1,700 parking spaces are needed by 2031. These new parking spaces will be created by replacing downtown parking lots with a series of parkades, starting with 350 new stalls (anticipated to be the Wilson Street parking lot) and followed by 250 new stalls (anticipated to be the Neeve Street parking lot).
I am assuming that these 1300 new parking spaces will be in above ground structures, which means that according to Stroup's numbers ($25,400 per space), the cost of building them will be about over $33 million dollars. Now, Stroup has worked through a mechanism for estimating how much money drivers need to pony up to pay for each space. I will try to work through his reasoning as follows.

The first cost is that of paying for building the structure. Stroup assumes that this can be done over 40 years. Let's assume that the city can get the money at 3% for 40 years. I Googled an amortization calculator and plugged in the numbers. At 3% over 40 years, the total capital cost is $56,705,000 (capital plus interest.) This translates into a monthly cost of $118,000. Divide that into 1300 spaces, and each parking space will have to create an average of $91 of revenue a month---just to pay the capital costs. Stroup's analysis of UCLA's parking budget says that it spends a further $33/month on maintenance, administration, and so on. These are 2002 US dollars, which convert to $58 in 2016 Canadian dollars. Add them together and it should cost about $149/month.

OK, not every space is going to be taken up by a monthly pass. Some of them will be rented to shoppers. If a space has to generate $150 of revenue a month, that only means it has to generate $5 a day. That should be relatively easy, shouldn't it?

Well, yes and no. Consider the fact that the lot is not going to be full up most days. Let's be really optimistic and assume that on peak days it will only have 10% excess capacity on any day. That means that only 1170 spaces will be in use. Divide $118,000 by 1,170 and you get $101 a month. But, you don't have to add $58 in maintenance to this number, but instead a larger number---because maintenance is a fixed cost, just like capital. This means that the cost per filled parking space has just gone up to $64 per space. That means that at 90% occupancy, the cost per customer comes to $165 per month.

OK, not every space is going to be taken up by a monthly pass. Some of them will be rented to shoppers. If a space has to generate $150 of revenue a month, that only means it has to generate $5 a day. That should be relatively easy, shouldn't it?

Well, yes and no. Don't forget that parking is something that fluctuates dramatically from day to day. Lots are often empty on specific days of the week, such as Sundays. They also empty out on holidays---such as Christmas. Let's assume that the lot downtown will not be used at all on four Sundays plus one holiday a month. That means that we can only count on 25 days a month when we can generate revenue from casual drivers as opposed to people with monthly passes. That means that the space has to generate $6 a day. Not a huge increase.

If you look at what a monthly pass for parking downtown currently costs, you can see that the biggest charge is only $92 and the cheapest is $40.  Hourly parking in the lots is $2 for a ten hour period, Monday to Friday, with a flat fee of $2 on Saturdays and $5 for special events. Sundays are free.

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The problem with all of Guelph's downtown parking plan is that it assumes that the future is going to be just like the past. And the one thing that I feel confident saying about the future is that just isn't going to be the same as what people are used to. Climate change means that we are going to have to transition to a carbon free economy in a very short part of time. I suspect that there are going to still be personal transportation devices (probably electric)---but there probably going to be a lot fewer of them. And a lot of them are probably going to be more like self-driving, taxis than personally-owned automobiles. Mainly, I suspect that there is going to be a lot more public transit in use. The fact that GO transit is expanding, a high-speed train for the Windsor to Quebec City corridor has been promised, and, Kitchener-Waterloo will soon have light rail all suggest to me that the number of people using cars will be declining in the near future.

Even more to the point, the transition to this new reality is not going to happen everywhere at the same time. I dare say that this new way of living is going to happen in downtown Guelph before just about anywhere else in the city or the province. People move to Guelph to be on the cutting edge of environmental issues, and the people who do that usually want to move downtown if they can.  What this means to me is that if we "get it wrong", the city will be wasting many millions of dollars on parking garages that will spend a large part of their life empty. This would again---as with so many things parking related---a profound misallocation of resources.

I would suggest, in contrast, that---in at least the downtown core---the city should rip up the off-street parking regulations and let the free market decide. Apartments, condos, and, commercial buildings will be a lot cheaper if developers don't have to provide parking spaces for people---whether they want them or not. If it turns out that I am wrong and there remains a tremendous need for downtown parking, let some business person step in and build a private parking garage where he can charge the real cost. Just stop trying to force me to pay for someone else's right to destroy the planet with with their gas-guzzling, climate changing, death wagon.  ;-)