Originally Posted by SebC
If you asked a random sample of people "would you prefer to live closer or further from the CBD?" I'm guessing most would say closer. That's why property values generally increase as you approach the city centre.
Indeed, the subsidies do make it seem like people prefer the suburbs because it artifically lowers the cost of living in the suburbs. But if the subsidies were eliminated, some of those people would be able to afford living closer to work... which is not only desirable for the individuals, but also for the city as it reduces their infrastructure requirements.
First off all, I'm not suggesting we "force" anything. All I want is to eliminate the artifical pressure on people to live further from the core rather than closer to it. And not all housing would become more expensive. Only the inefficient housing far from the CBD, but inner city properties would have a lowered overall cost (sticker price would actually go up, but the effect of taxes going down would be greater). Note that not all the inner city properties are expensive, nor are all suburban properties cheap - so it's not taking from the poor to give to the rich.
As for the "even worse parasite communties", I'm not sure that they are in fact worse. No, they don't contribute anything and they use our roads, LRT and such. But they do fully pay for their own fire halls and such (at least as far as Calgary is concerned), which the "parasite communties" within the city limits do not.
Well, transit infrastructure is only part of the cost of servicing new communities. The fire halls, libraries, rec centres and stuff need to be built for new communities regardless of where the residents in the area work. But I would not be opposed to a toll road system that breaks down usage to an individual level, if it were feasible to implement.
To be fair, I haven't researched this specifically. But logically, a subsidy has to come from somewhere. Without an existing tax base, the city can't offer subsidies. Now perhaps these communities were subsidized by other levels of governments. But someone, somewhere, paid for themselves. Everyone can't get a net subsidy - it's a mathematical impossibility. And there's an equivalency between money now, money before and money later. Even if Renfrew and Inglewood have been subsidized in the past, they have more than paid back those subsidies now. Will the new communities do that? Not necessarily. With operating costs and the time value of money (money today is worth more than money tomorrow), it is quite possible that they will never pay back their subsidies. Meanwhile, the inner city has overpaid.
Actually you can. Subsidies produce a net loss unless they create positive externalities (externalities are effects on third parties, basically) the same size as the subsidies. That's fundamental economics. Inner city development produces better externalaties than suburban development (e.g. less polution), yet suburban development receives the subsidies at the expense of the inner city. This is completely backwards from what it should be if you don't account for externalities, or you can account for externalities and say that net public benefit is optimized when neither subsudized the other. (By the way, when I say that new developments should pay for themselves, I mean including externalities and over time - doesn't matter if the cost is paid through higher sticker price on the intial sale or higher taxes after.)
Suburban development does create jobs. But so does paying someone to move a pile of rocks back and forth. And in subsidizing these activities, we displace labour from more productive activities. And yeah, more spending power to the residents of the suburbs is a good thing. But what about the corresponding decreased spending power of inner city residents? There are a ton of relationships in the economy, but you don't need to figure them all out or quantify them all to determine that the net effect of subsidizing one form of development at the expense of the other will be a net loss to society (called "deadweight loss", if you want to learn more). This would be true as well if the suburbs were overtaxed (relative to their costs to the city) to support central development.
Well, many civic officials have received campaign funding from the developers who receive the subsidies (the benefit of the subsidies gets split between developers and the people who buy the homes - the costs go to inner city developers and residents), and many people also benefit from the suburban subsidies (or believe that they benefit from them). So it's not an easy thing for a politician to speak about. Nevertheless, there are some who do understand the issue and wish to take it on, such as Calgary's current mayor.
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