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.


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.

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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.  ;-)



Thursday, October 13, 2016

The Places to Grow Act and Guelph

Executive Summary:

Guelph faces extreme pressure because of forces outside of its control. Chief amongst these are the Toronto Green Belt and the Places to Grow Act. These two forces have pushed the city to develop in a way that citizens need to understand if we are going to adapt to the future.

The Places to Grow Act and Guelph


Guelph citizens sometimes complain bitterly about about how the city keeps getting bigger and bigger, and, how there seems to be so much emphasis on getting more people to live downtown. Why can't the city just stay the way it was in the past? Unfortunately, Guelph doesn't exist in a bubble. It is under the ultimate authority of the Province of Ontario, which means that provincial planning guidelines supersede local ones. And two of the most important ones are the Greenbelt Plan and the Places to Grow Act.

The primary driver of both of these plans is population growth. As you can see by the graph below, Ontario is estimated to grow by somewhere between six and two million more people over the next twenty-five years. (You can click on the graph to see it more clearly.)


Because Canada has a very low birth rate---it's currently 1.61 per woman---all of that population increase will be coming from immigration. And for a variety of reasons immigrants tend to move to the larger Canadian cities, like Toronto. This means that there will be a natural tendency for those six to two million new people to move to the Greater Toronto Area. Just as Guelph is under the control of Ontario planning decisions, so Ontario is under the control of Federal immigration policy. So whether it likes it or not, Queen's Park has to figure out how to accommodate those people.

In the past the province would just unleash the developers and let them create housing for them. Unfortunately, this just is no longer a solution because the province is hitting the physical limits of how many people we can cram into it using the old ways of doing things. Suburban sprawl has already gotten to the point where it is threatening our water and food supplies.

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One of the areas where development and water supply clash is the Oak Ridges Moraine.

Norman Einstein, May 27, 2005

As should be obvious from the map, this area of land is situated perfectly for developers to create new housing. All they would have to do is strong-arm the province into building some new roads, maybe a few GO lines, build a few million little houses made of ticky-tacky, and Toronto's immigration woes are over! Unfortunately, the moraine is not only a great place to build suburbs, it's also the place where the ground water is recharged for most of the municipalities around it. Which means that if the moraine were developed, there is a good chance that many places around it would find that their wells would dry up. Equally important, many rivers and streams also originate in the Moraine, so development there would dramatically lower the water quality for a huge swathe of Ontario.

People get upset when they contemplate their wells and streams drying up, so a significant amount of citizen opposition mobilized against development. This culminated in the Mike Harris government declaring a moratorium on development on the moraine, followed by the Oak Ridges Moraine Conservation Act. A lot of hemming and hawing took place as politicians began to realize that they had to preserve the moraine or else voters would punish them severely. Effectively, the moraine is now "off the table" as a dumping ground for population growth in the Greater Toronto Area.

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People are not only attached to the idea of drinking water, they also like to eat food. Unfortunately, seeing as most of Canada was covered by enormous ice sheets until very recently, there are precious few places in the country that have good agricultural land. Southern Ontario has a large proportion of it. Two of the best areas are close to the Greater Toronto Area and would be great places for developers to build houses. These are the fruit growing areas that are close around lake Ontario (the "Niagara Tender Fruit and Grape Area"),

Map c/o Friends of the Greenbelt Foundation



and, the Holland Marsh (aka "the Salad Bowl of Ontario".)

Map c/o Friends of the Greenbelt Foundation

Farmers often complain about how hard it is to export their crops to Europe and Japan. What they fail to understand is that within living memory both of these areas suffered starvation. They were dependent on imported food to sustain their populations and during World War II they had that lifeline severed. As a result, they have collectively decided that "never again" would they become so dependent on outsiders for their food supply. This is a lesson that Canadians should also follow. We won't starve without the Holland Marsh and the Niagara Peninsula, but we would find our diet a lot more monotonous without fresh vegetables, peaches, and, grapes.

Even if our society never suffers from absolute deprivation, any item that we need that comes from a foreign source is a drain on our balance of payments. Last winter there were headlines about cauliflower costing as much as eight dollars a head in supermarkets. The reason why was a combination of a low Canadian dollar relative to American, plus a drought in California that reduced supplies. If people absolutely had to have this particular vegetable, that means that their money left the province and went to the USA instead of staying and helping the local economy. Preserving a local fruit and vegetable industry offers a valuable economic "buffer" that ensures that Ontario will be able to keep a balanced, sustainable economy. This will help avoid the economic roller-coaster of "boom and bust" that happens in areas that pin all their hopes on one industry alone. (Ever heard of Alberta?)

Add the Oak Ridges Moraine to the Holland Marsh, the Niagara Tender Fruit Area, and a few other things, and you get the Toronto Green Belt. 

Map c/o Friends of the Greenbelt Foundation




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Beyond food and water, there are other parts of the Greater Toronto Area that are problematic. As I was told by a consultant at a stakeholder meeting on this subject "the infrastructure is maxed-out and simply cannot be upgraded anymore". One example of this is the 401 highway. 

Most people I talk to are surprised to hear that the busiest roadway in North America isn't in the USA, it's actually the 401. Anyone who drives it on a regular basis usually gets over the initial surprise and then says "yeah, now that I think of it, that makes sense". 

Kenny Louie at Flickr
The problem with highways is that once they get maxed out, it gets REALLY expensive to add more capacity to them. This is because businesses and home start getting built up around them, which means that to make the road wider you have to compensate the folks who will have to have their building's demolished. Not only that, if you build the road that feeds cars into Toronto bigger, then you have to start thinking about expanding the volume on the city streets they feed into. And then you have to start thinking about where all these folks are going to end up parking---.

The provincial government understands these issues, which is why they are investing heavily in the Government of Ontario (GO) transit system. As you can see below, the government expects big things from GO over the next few years. (You can click on the graph to see it more clearly.) 


Natural RX from Wikipedia
Once again, though, it is important to realize that the GO system also plugs into another transit system once it gets to Union Station. And anyone who has seen the rush hour at Union Station's subway terminal will understand that it too seems to be "maxed-out". Unfortunately, the politicians in Toronto City Hall have dithered for decades instead of improving public transit.

Beyond transportation, there are other infrastructure issues such as sewers, water, etc. Anyone who has seen the huge numbers of condo towers being built downtown has to wonder "how can the city deal with so many people in a small area?"  Planners have raised the same questions, which is why the government has actually mandated that municipalities like Guelph have to take the "over-flow" instead of trying cram more people into the GTA.

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If everything was left up to developers, the Greenbelt would simply result in suburban sprawl "leap-frogging" the Greenbelt and eating up the land just beyond it. As you can see from the following map, the Greenbelt ends just outside of Guelph, Cambridge, and, Brantford.

Map c/o Friends of the Greenbelt Foundation
Guelph and Kitchener/Waterloo already have GO service, with promises of all-day and fast electric trains in the near future. Cambridge is also lobbying hard for integration into the Metrolinx system. With housing a lot cheaper in these towns than Toronto (although it's hard to believe in Guelph), a lot of developers would love to put up single-detached homes in these communities if there is a way that people can easily commute to jobs in Toronto.

With this reality in mind, the Places to Grow Act mandates that city plans follow new guidelines aimed at minimizing sprawl. First of all, it sets minimum guidelines for density of the downtown "core" of the cities around the Greenbelt. In Guelph's case, it says that it must have at least 150 people living and working per hectare (a hectare is an area of 100 metres by 100 metres) in that area. In addition, Places to Grow also defined the geographical boundaries of the each cities downtown core---so municipalities couldn't "define away" the  Act's influence on their community. Here's what it says about Guelph.



Of course, the province doesn't have any sort of mechanism for forcing people to live in Guelph rather than Toronto. But through planning it can control what and where new housing is being built. And if there is no new housing being built, the competition for existing housing stock will rise to the point where more and more people are priced out of the market. This means that they will move to areas where it is cheaper---which means Guelph instead of Toronto. And, if no new single-family houses are being built on the edges of the city (ie, "Greenfield" development), then prices will push the lower edges of the income towards higher density rental and condominium housing. The same sort of market mechanisms come into play with regard to commercial, service, and, industrial development---businesses get pushed away from expensive land towards cheaper areas.

The above point is tremendously important. You won't hear any politician say this, but high housing costs are not a bug, they are a feature. They are a mechanism for forcing society to change the way it does things. The hope is that people and developers will eventually stop pining for the single-family, totally detached home in the suburbs and instead live in higher density housing.

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Wait a minute!!!! Isn't this that awful "social engineering" that proponents of the free market accuse Greens and Socialists of doing? Shouldn't people be "free" to live any way they want to? Why should the government be telling me that I can't buy and live in a single family, fully detached home if I want to?

This is a totally bogus argument simply because that sort of freedom has never existed.

People have always been constrained by physical reality. You might want to jump to the moon or swim to Europe, but you can't because your muscles just aren't strong enough. And in the same way cities might want to build suburbs forever, but the fact is that in doing so they'd bankrupt themselves. Low-density suburbs are a lot more expensive to service than higher density urban areas. This is simply a function of mathematics. A quick Google search found a site that suggests for a representative sample of Canadian cities the suburbs are have only 31% of the population density as the core. If this is true, then this means that there are roughly three times as many tax payers per unit of road, sewer, public transit, water, etc, in the urban areas than suburban.

The above reality has been masked by several facts.

Up to a certain point suburbs are relatively inexpensive luxuries that cities can afford to support. If you have a healthy, prosperous urban core, then a thin "rind" of suburbs around them can be easily afforded. Secondly, you can pay for a large fraction of infrastructure by charging developers fees for building new homes. Also, when a society is going through a period of extended prosperity it can seem that the added price of maintaining these suburbs can seem to be an acceptable cost.

Unfortunately, however, as suburbs get bigger and bigger the infrastructure ceases to be just a minor "add on" to existing higher density systems. And after a few decades sewers, roads, water pipes, etc, need to be replaced and at that point all the costs come from tax payers. And as time goes on the economy changes and cities find new things that they want to spend their money on. "Locking in" extra-expensive services for low-density suburbs ties the hands of future city Councils. Unfortunately, people become attached to a certain lifestyle and resent any attempt to suggest that it is a luxury that society can no longer afford. In the same way, businesses become attached to the way they have always operated and fight against any idea that they need to change.

Aren't the suburbs in Markham pretty? I'm so glad they didn't build those ugly towers---.
IDuke from Wiki Commons


Ordinary voters do not have the specialized expertise that is needed to see the long-term costs associated with living in their own house in the "burbs", so they tend to complain that it is just because of "perfidious socialists" that they cannot afford a house. And, unfortunately, a lot of politicians and business people don't understand these issues either. Or, if they do, they are quite happy to lie to voters in order to get enough support to be able to gain power. These folks are quite happy to "kick the can down the road" for future generations to deal with.

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Guelph is at a bit of a cross-roads. Our current city plan limits expansion of the city and suggests that all future growth needs to happen through intensification instead of new greenfield development. At the same time, there is tremendous grass-roots opposition to any attempt to build higher-intensity housing as infill---citizens complain bitterly any time some developer wants to build an apartment building in their "back yard". As a result, housing costs keep going up and up. A lot of people want to go back to the "good old days" when folks could all buy a bungalow in the suburbs, and they don't know or care about the reasons why this is a very bad idea for the city as-a-whole. (I suspect that this is why some businesses say that Guelph is a hard place to do business. The guys who want to just build suburban sprawl run up against the official plan. Others who want to build apartments and condominiums find opposition from the "Not In My Back Yard" folks.)

And there are going to be politicians who are willing to say that there is no reason why the city cannot change it's plan and expand the city boundaries. There is no Greenbelt protecting the areas around Guelph like there is in Toronto. Even worse, even though Guelph's latest city plan has been accepted by the government of Ontario, it is currently in front of the Ontario Municipal Board (OMB) where it is being appealed by a long list of developers, including:  Abode Varsity Living Inc, Loblaw Properties Ltd., Terra View Custom Homes Inc. & Lambden Farm Trust, Thomasfield Homes Limited, D Four Guelph Developments Limited, Fieldgate Commercial Developments Limited, Greenways Group Guelph, Living Rivers; and others.  (See the OMB website, the Guelph case number is PL140042 .) While it seems to be the case that the OMB tends to favour developers over city plans, the province is currently reviewing the OMB itself with an eye to "fixing" this problem. So it is hard to predict what the future will bring.

Sunday, October 2, 2016

The Firewall Between Politicians and Staff

Executive Summary: 

Contrary to what many citizens would wish, there is an administrative barrier between elected officials and city staff that keeps the former from being able to influence the behaviour of the latter, except through the creation of policy. The reason why this has become part of standard operating procedure is because unless this "firewall" exists, there are simply too many opportunities for political corruption. Unfortunately, this has caused some problems in that some staff members have become so protected by a wall of secrecy that it is often almost impossible for ordinary voters to understand the actions of local government in some situations.

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The Firewall Between Politicians and Staff 

I sometimes hear people complain about how "distant" and "bureaucratic" Guelph's public employees have become. They long for the "good old days" when they could just pick up a phone, call your local Councillor about a hole in the road, and, staff would show up the next day to fix the pothole. Now Councillors refuse to get involved and instead tell people to contact Public Works themselves. How come?

It's important to realize that what we call "the government" consists of two very different bodies: elected officials, and, administration. When it is working properly there is a "firewall" between the two bodies. Council simply cannot tell staff what to do. Instead, staff are managed by the Chief Administrative Officer, and, he or she follows the budget and policy directives of Council.

Why this formal distance between politicians and staff. After all, don't we elect our Council to run the city?

First of all, it would be tremendously inefficient to have city employees acting like the personal servants of politicians. The roads department has a budget and a schedule of road maintenance. If they drop everything to come down and fix your pothole because you complained, it means that they aren't doing something else in another part of the city.  For example, Mayor Rob Ford of Toronto once called upon his city transit department to fix potholes in front of his family's business, Deco Labels and Tags, because he was having a reception and he wanted everything to look nice. According to the Toronto Star, this work (which included repairs to culverts) cost the city between seven and ten thousand dollars. (It shouldn't have happened, but when the Mayor calls, it is difficult to say "no".)

Secondly, if municipal employees did start routinely working like this, then it would open the door to a lot of different types of corruption.

Boss Tweed
From the Hoxie Collection
Imagine that the road work isn't just to help the Mayor's personal business. Maybe someone who is a large donor to his campaign wants some work done on his street, so he gets preferential treatment. Or, maybe the Mayor wants to raise money for his next election campaign and starts telling people that they won't get any work done unless they make a donation first.

And this sort of corruption doesn't end at getting a few potholes fixed. It could also involve who gets a lucrative contract such as building a new sewage treatment plant. Or, it could become so fine-grained that it involves everyone who works for the city---join the wrong political party and you will never get the job. The best example of this sort of system was the Tammany Hall "electoral machine" that existed for hundreds of years in New York city. In it's heyday---under the infamous "Boss Tweed"---you simply couldn't get a job sweeping the street or a contract to supply paving stones unless you joined the Democratic Party and helped elect their candidates.

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Beyond the problem of corruption, there lies another issue, expertise.

How often have you heard a politician make big promises while running for office and yet end up doing much the same as her predecessor once elected? People will complain bitterly and say "politicians are all the same", but more likely than any moral failings, the newly elected person simply didn't understand the complexity of governance and made promises that were impossible for anyone to keep.

Just one of the problems that a newly elected official often faces is the fact that we live in a society governed by the rule of law. And this applies to city governments as much as any individual. This means, for example, that if a person runs on a platform of "cutting waste" they will find that the largest part of the budget (47% in the Guelph 2016 budget) is wages. If the city is going to significantly cut costs, it is probably going to have to either eliminate a certain number of workers or cut their wages. The problem with that is two-fold.

First of all, City Council doesn't actually hire or fire anyone---that is the job of the Chief Administrative Officer. The reason why this is the case gets back to our old friend Boss Tweed. If Council could hire and fire individuals then it would be able (and greatly tempted) to use staff positions as a mechanism for fundraising and awarding patronage.

Secondly, people hired by the city are protected by both union and professional contracts. This means that Council has to abide by the provisions of those contracts, and that means that there would be unexpected consequences if they try to save money by arbitrarily cutting staff or paying them less. For example, many union contracts are governed by seniority clauses that would mean that the first people laid off have to be the last people hired. In a lot of institutions this might lead to a dramatic reduction in productivity because the latest hires are often the ones most "up to date" with new technology. More to the point, attempts to cut staff may lead to strikes which can cause chaos in a municipal government. In addition, people in administration often have professional contracts that require significant "golden parachutes" in exchange for dismissal "without cause". It's hard to save money by eliminating positions when you will have to pay out hundreds of thousands of dollars to get rid of the person filling it.

In addition, city governments are "stuck" with having to fund services that they effectively have little or no control over. If you look at the 2016 budget for Guelph it is revealed that 17% of the budget goes to police services. The Association of Municipalities of Ontario has complained that the growth in both police and fire costs is causing significant hardship to municipalities. Primarily, the problem is that the police department is controlled not by City Hall, but by the Police Services Board. It is true that City Council is supposed to have "final say" over the police budget, but the largest part of that budget are wages and salaries. And because police officers are an "essential service", this means that their contract negotiations are ultimately controlled not by their ability to go on strike or management's to lock them out, but by the Labour Board arbitrators who come up with binding resolutions to contract disputes.

Daniel Patrick Moynihan
US Gov
This is exactly the sort of detail that will derail a politician who comes into office vowing to "cut taxes" come Hell or high water. And, it is important for the administration to be able to effectively "push back" against Councillors who think that if they "huff and puff" they can ignore the law of the land. If the city staff can't force the Council to see reason, a city could find itself in the situation of repeatedly losing lawsuits, facing unnecessary strikes, and, generally descending into total chaos. As Daniel Patrick Moynihan is famous for saying, as a politician "you are entitled to your own opinion, but not your own facts". A large part of the job of city staff is to point out the distinction between the two. A city can function with different opinions, but it must adhere to the facts or it will fail.


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A third important function of staff is to ensure that there is continuity between administrations.

Almost everything that a city does involves periods of time that are much longer than a politician's term of office. There are still sewer pipes in Europe, for example, that were laid in the Middle Ages. That's why it is tremendously important for staff to remind newly elected officials about decisions that were undertaken by previous administrations. One terrible example of what can happen if a city refuses to stick to the policies of the previous Councils is the endless dithering that has occurred over the expansion of transit services in Toronto. Ultimately, the core problem is that no matter what plan is agreed upon, the upfront cost is going to be huge and the benefits are only going to be visible long after the current batch of elected officials have left office.

Given this reality, the always present temptation for elected Councillors is going to be to save money by "kicking the can down the road" instead of making expensive, long-term investments. The best example that I can think of for this in the Guelph context is the District Energy project. This is often touted as being a totally new type of project, but in actual fact, it is really a very old, proven idea. Montreal, Toronto, Hamilton, London, and many universities---including the U. of Guelph---have district energy systems, some of which date back to the late 19th century.  The problem isn't that district energy systems don't work, it is that they are a very long term investment that requires a large amount of capital up front and which pay themselves off over the long haul. This causes problems with governments and businesses that find themselves fixated on the next election or quarterly earnings report. In the specific case of the this particular one, the commitment to a district energy project needs to continue even though the energy market is currently going through a short-term period when energy costs have dropped far lower than when it was initially proposed. Over the next 100 years this will be only a momentary "blip", but elected officials who have a much shorter time frame need to be reminded of this fact. This is where staff need to step in and ensure continuity between administrations.

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Having said all of the above, it is important to also remember that elected officials serve a very useful purpose. Theoretically, their job is supposed to be about developing an over-arching policy direction that is informed by the staff's knowledge, but is ultimately based on their judgement. Unfortunately, it is possible for staff to use their position as bearer's of knowledge and expertise to manipulate the elected official.

I can remember many years ago that the provincial Mike Harris government was of the opinion that Guelph should have a charity casino. As a result, Guelph was ordered to set up a citizen panel to choose the best place for one. I volunteered and ended up on that board. At the first meeting it became clear that every single person on the board was opposed to the casino. Indeed, the representatives for St. Joseph's Hospital said that they only joined to come to the first meeting and announce that they refused to take a penny from the earnings of any casino that would be built in the city.

But in the midst of that sea of opposition, the staff member who was "advising" the group stated up front that Guelph was going to get a casino and that there was absolutely nothing that the city could do to stop it. I happened to know that other municipalities had set up boards like ours and had decided that their job was to engage with the citizenry and stop their casino from being built. I argued that since none of us were in favour of it, we should do the same thing. One of the ideas I put forward was to post signs in all the neighbourhoods that were being considered to let people know what was going on. The staff member almost had a heart attack at that point, and convinced all the other members that this was an insane idea because it would "lower property values" in the neighbourhoods. When it became obvious that "the fix was in", I resigned.

I am not a professional staff member. I've never been to a planning school. And yet, where is the casino in Guelph? It turns out the staff member really didn't know what he was talking about after all.

In another case, some neighbours and I had a problem with a cab company that had moved into a predominantly residential neighbourhood. When the bars closed large numbers of drunks were streaming out of the downtown and congregating outside of the office. At times there were as many as thirty loud, obnoxious people congregating in the neighbourhood waiting for a cab to pick them up. The taxi bylaws had mandated that the cab company had to provide a waiting area for people, but the city had waived this rule after the company moved. So, in effect, the neighbour's front yards became the place where they waited.

The bylaws clearly stated that the Police Board controlled the cab companies, so it had the power to deal with this problem. Yet when consulted by the board, the police lawyer refused to advise any action. Indeed, he refused point blank to even say why he refused to take regulatory action. He would simply just ignore the question. Since the Board was loathe to ignore his "advice", they just let things drag on and on. It was only after the Mayor (who sits on the Police Board) stepped in and suggested that a mediator be hired to negotiate a solution to the problem that one came about. In effect, the Board had to spend tax payer's money to come up with a cumbersome and expensive "work around" due to the intransigence of a staff member.

This is one of the problems with professional staff. Their training tells them the intricacies of how things usually operate, but at the same time trains them to never "think outside the box". This can dramatically limit their ability to solve problems.

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In the best of all situations there should be a sort of "dynamic tension" between elected officials and administrative staff. Councillors should never gain complete control, or else you will end up with disasters like Tammany Hall and Boss Tweed. On the other hand, if staff take over they will start controlling elected officials by at best dismissing all innovation and at worst manipulating them by controlling the information they are fed. Elected officials have to be willing to listen to the expertise of staff and accept that they need to maintain continuity with the decisions of previous Councils, but they also have to assert their authority to determine city policy and procedures---even if it sometimes goes beyond the professional staff's "comfort zone".

Politicians and voters need to have some sort of understanding about the influence of staff in managing Guelph. Unfortunately, it seems to be very difficult for anyone to find out exactly what is or is not happening at the highest management levels. People come, people go, large amounts of money get paid out in settlements. Fred Dahm's book Conflict and Compromise:  Politics and Planning in Guelph 2000 to 2015 has an appendix that lists various changes in positions and cites specific dollars awarded, but he freely admits that he has no idea at all about why any of this took place. As he mentions in a podcast interview with Guelph Politico, all inquiries about specifics of personnel decisions hit a brick wall.  It might be that this is all quite professional and "above board", but it doesn't really serve the voter very well. I understand and respect the need to create a fire wall between staff and elected officials, but in the interest of democracy I think that our society should develop a little more transparency when it comes to the highest levels of the civil service. These people simply have too much power to allow them to work completely in the shadows.