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Originally Posted by GP_Matt
These development subsidies that you speak of, are they direct subsidies as in the city gives the developers cash, indirect as in the city builds the roads going to the subdivision or more abstract as in, once the area hits a certain population the city will build a train station?
If they are fully upfront then you may have an argument, but anything done after the land is sold to homeowners would be much more difficult to quantify and execute. As far as I know the Municipal Government Act lays out the rules for property taxes and each zone. I suppose a special levy could be added for any project, but I am not sure if that would require a vote.
What would happen if they wanted to build a new art gallery in the core? Would the taxes be adjusted so that those who are closer to it pay more? Clearly someone who can walk there will benefit more than someone who lives in the suburbs.
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Typically when we're talking about subsidies in this context, what we're talking about is insufficient developer fees.
This oldish article from FFWD explains the issue pretty well. When a new community is built, the developer builds the road, but the city pays for the water and sewer infrastructure. The fees the developer pays the city don't cover the water and sewer portion of the development, so it ends up coming out of the city's general revenue. Then, when you consider the time value of money and the upkeep costs of these areas, the debt the city incurs to develop these communities is never repaid through taxes. It's an indirect subsidies that creates demand for other services (LRT, intersections) that are also never paid back by the areas they serve. Since that article was written, the city signed a new framework with developers where the subsidies are about half of what they were previously. Which is still too much, as they should be zero or negative ("should" based on optimizing net social benefit - zero if not considering sprawl a negative externaility, negative - i.e core get subsidized - if we do consider it a negative externality, which is almost certainly is).
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Originally Posted by Kavy
100% disagree, and I live on 17th.The city needs people to live in the outskirts and therefore needs to develop infrastructure for them. Maybe less people should live there, but that's not the argument here.
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More people live there than "should" (again, speaking strictly in an economic sense - optimizing net social benefit) precisely because they are are subsidized to do so.
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Originally Posted by Kavy
Should Tuscany and surrounding communities pay for police and fire stations now as well? How about hospitals, aside from the ER in the foothills, should the southeast foot the bill for the new south east hospital? Can we have different levels of care for what part of the city you in?
How about a United states Way of looking at this, your money only goes only to your school district. Now our youth are really limited by there parents income as inner city school will start to crumble.
Your method would create a city with even more so classes split by geography - only the rich gets good infrastructure. It's insane.
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Take a look at the map on
page 33 of this document (it shows median household incomes in 2005 by community). Whilst there are pockets of wealth in the inner city, for the most part moving outwards actually puts you into wealthier territorities. Making the periphery pay for itself would actually free up money to help the people who really need it, which I am fine with. Subsidizing new communities (which are full of people who can buy their homes, have more cars, drive more kms, and pay the least tax - at least on a square foot basis) is actually regressive. Subsidizing the periphery is subsidizing a lifestyle choice - not subsidizing people who need it.
The problem with inner city schools right now is that there aren't enough students for them without making students travel long distances... shifting the incentives so that more families can live in the inner city would benefit these schools.
The East Village is paying for itself through a community revitalization levy. The infrastructure the city is building there will be paid for through the increased taxes the development of the area will generate. Tuscany can't do that, because it's a less efficient community - doesn't generate as much tax for the infrastructure it needs. But if it had a higher tax rate or higher development fees, it could pay for itself the same way the East Village will.