I work for Mayor Nenshi, ask me anything!

[SebC]

Originally Posted by Slava

Sure, but they're not. The taxes are based on the market value? If my place is $450k and your place is $450k then we both pay the same. While you contend I use more services because I live further away, its a generalization. Maybe I walk to the C-train and someone who lives closer drives in. Maybe I work 3 blocks from my house, or have a home office. Its just silly.

Never mind the fact that someone with a ten percent higher property value pays more taxes (as in your example), there is just no proof that the guy in the condo uses less services or costs the city less money. What if they call the fire department 8 times this year, recycle absolutely nothing and have a family of 4 living in that condo whereas the suburban dweller is single, composts everything and uses very few services? Just because you live in a condo doesn't mean you're more sustainable.

So because we can't account for everything we shouldn't account for anything?

On average, denser developments (which are predominantly found around the inner city), are more sustainable. On average, the combined taxes and fees that their residents pay should be made to reflect that.

[Bunk]

OK, let me try and explain this issue around development levies as best I can.

These levies are charged through an acreage assessment. That is, when a developer goes to subdivide land, it triggers the payment to the City (per acre) of a set of levies and charges (as well as other obligations) to pay for "off-site" infrastructure including:

• Transportation (Road upgrades, buses, etc) - LRT infrastructure is excluded as a city-wide piece of infrastructure
• Storm Sewer
• Water and Sanitary Sewer
• Community and Recreation (Emergency Response Facilities, Libraries, Police Stations, Recreation Centres
• Inspection fees
• Signage fees

The levies are negotiated through a "Standard Development Agreement" every five years and executed through an "off-site levy by-law" The City has the ability to impose the levy under the Municipal Government Act, but engages in a negotiation process with the suburban developer group - Urban Development Institute (UDI).

"On-site" infrastructure - things like internal roads to a community, sidewalks, streetlights, pipes and parks are paid for by the developer.

Costs for each category of infrastructure are based on real pieces of infrastructure in Calgary with assumptions around inflation. The Transportation levy for example is calculated by adding up the estimated cost of all transportation infrastructure within greenfield areas yet to be developed (except for LRT) required to support suburban growth. That number is divided by the amount of developable land (net of environmentally sensitive areas, slopes, etc) to come up with a levy per acre. It also includes 17% of the cost of "downstream" infrastructure - that is the cost of upgrading Transportation Infrastructure within the existing built up area as new development adds burden to that existing infrastructure as well.

The amount of infrastructure required is based on assumptions such as development density. In the case of the 2011 agreement, it was based on a city-wide density of about 18 units per hectare (even though actual greenfield development is averaging about 20-25 units per hectare). There are also assumptions agreed to such as how many libraries are needed per so many thousands or residents.

The 2006 agreement, did not include a levy for water and sanitary sewer infrastructure, which has led to significant municipal debt. It was reintroduced (albeit at only 50% cost recovery through the levy agreement) in the 2011 agreement.

The total levy increased from $137,380 per acre from the 2006 agreement to $281,925 essentially doubling the average levy cost per home to $15,662 (from about $7500)

The premise is that levies should only cover the cost of the initial outlay of capital, not lifecycle or ongoing operation costs.


If you break down the components of the levy (acreage assessment), you can see there is a discount to full cost recovery of off-site infrastructure.

1. Transportation $119,605 ($6,645 per home) 100% cost recovery
2. Storm Sewer $16,080 ($893 per home) 100% cost recovery
3. Waste Water $44,346 ($2,464 per home) 50% cost recovery
4. Water $24,469 ($1,359 per home) 50% cost recovery
5. Community and Recreation $74,438 ($4,135 per home) 85% cost recovery (due to notion that developer shouldn't pay 15% additional cost to achieve LEED Gold certification-level building)
6. Inspection fee $2,326 ($129 per home) 100% cost recovery
7. Subdivision signage fee $650 ($36 per home) 100% cost recovery

Total is $281,925 or $15,662 per home (again, this is not a direct charge on each home, just an average per door based on assumed densities that the developer pays at subdivision - some of which will get absorbed by that developer, and much of it passed through to consumers).

If you were to use a principle of 100% cost recovery of all initial off-site capital infrastructure (except LRT), you would eliminate the discount on the Waste Water, Water and Community and Recreation items.

Doing this would result in an increase of the fee of $4,552 per home. Full cost recovery would be $20,214 (with the assumptions agreed to in the negotiation).

The previous agreement was about 37% cost recovery, the current agreement is about 75% cost recovery. So one could say there is a subsidy of about $4500 per home or about 25% of the cost to support that growth with necessary infrastructure, which the rest of the tax base must make up for. At about 7000 homes in greenfield areas built last year, that equals over $30 million per year subsidizing suburban growth - or equivalent of what a 3% residential property tax increase gets the City in revenue.

The problem of course is that this distorts the market - it makes homes artificially less expensive on the periphery. Increases to the levy both get absorbed by homeowners through higher prices as well as a reduction in margins, particularly for land developers selling land to home builders.

While new homes in existing areas do theoretically add burden to infrastructure, most necessary infrastructure is already in place (initial capital outlay paid for when initial subdivision/development happened). And taxes and grants pay for lifecycle and various upgrades in all areas of the city.

Also, redevelopment such as infill usually replaces population in areas that are well below their peak populations (so basic infrastructure is in fact underutilized in these areas, and redevelopment helps make up this gap). Nevertheless, there is ongoing work figuring out what a fair redevelopment levy would/should look like to cover any potential increases in the burden it might have on infrastructure. Specific areas like the Downtown, Beltline and TOD areas have linear frontage based levies and density bonusing, but other areas, like semi-detached infill, do not.

The current agreement went a long way to closing that gap in cost recovery, but the Mayor wants to push to close it completely.

I hope that helps the clarify the conversation.

[RedMileDJ]

What kind of phone does the mayor use?

What kind of accessories does he use with it? Case (model)? Etc...

[Bunk]

Originally Posted by Red-Mile-DJ

What kind of phone does the mayor use?

iPhone. 4s I think. Uses a battery pack.

[RedMileDJ]

Originally Posted by Bunk

iPhone.

...mother of God. I knew it.

[Bunk]

Originally Posted by MoneyGuy

Bunk, I suspect you won't have this, but you may surprise me. I've read that Calgary and Edmonton's new residential development is more than 80 per cent sprawl - in other words, communities growing outward, mostly low or medium density requiring new infrastructure, instead of infill.

Do you happen to have those numbers for both cities? This is a particular interest of mine.

Hmm, maybe you're referring to the Queen's University study looking at urban form of metro areas across Canada?

http://www.canada.com/news/infograph...s/suburbs.html

This was done by my professor, David Gordon, actually.

It tries to categorize cities in terms of urbanity and mobility (not perfect, but a pretty good breakdown that's applicable across a diverse country).

Calgary's numbers are broadly in line with most Canadian cities in terms of amount of "active core" and suburban areas. We have less uncontrolled very, very low density "exurban" sprawl compared to most cities, which is a big advantage.

[Bill Bumface]

Were you at the Inglewood community centre Saturday morning?

[RedMileDJ]

Originally Posted by Bunk

iPhone. 4s I think. Uses a battery pack.

Which one? Dexim?

[Clarkey]

Were you and your colleague's that work directly for Nenshi hired by him or do you work for the mayor's office?

[CaptainYooh]

Great post, Bunk. Respect.

I would like to point out only one thing that the opponents of suburban growth conveniently forget when they scream about "subsidy". Building dense greenfield subdivisions, in addition to providing affordable housing choice for families, are also contributing to the ever increasing desirability and valuations of the mature inner city housing; thus, contributing to the wealth increase of the inner city residents. Broken down, inner city housing price growth significantly outpaces suburban housing price growth. Yes, at a first glance, this makes the inner city homeowners pay higher property taxes. But the higher valued homes also make their personal net worth substantially higher with all of the pleasant consequences.

A growth-oriented municipality can contribute positively to the harmonious suburban housing development by specifying that every major housing type is represented in each new community in fair proportions. That is, overall density is not the determining factor. At present, greenfield developers try to develop as many narrow SF lots as possible and achieve higher overall density through concentrated pockets of 3-4 storey parcels, which get built the latest and all look similar. Narrow lots get built out as uniform trailer-looking homes. Instead, it would be much better if a municipality demands certain percentages of small, larger, medium, high-end SF lots in addition to each type of MF, i.e. semi-detached, row townhomes, stacked townhomes and apartments. Also, larger commercial parcels should be required in each community. With diversity, communities become more sustainable.

[4X4]

Thank you, Bunk.

I gotta say I agree that the gap needs to be closed permanently. It only makes sense. And we would never have to hear about it again. Ahem.

CaptainYooh, have you been in any new community? Every single one that I've seen has a mix of starter homes, family homes, condos, townhouses, duplexes, and a lot of them have estate homes as well.

[Bunk]

Originally Posted by hulkrogan

Were you at the Inglewood community centre Saturday morning?

Yes. Quilting for Calgary was amazing. The Mayor told the story about it all day to different groups.

[Bunk]

Originally Posted by Red-Mile-DJ

Which one? Dexim?

Dunno

[Bunk]

Originally Posted by Clarkey

Were you and your colleague's that work directly for Nenshi hired by him or do you work for the mayor's office?

We are apart from City Administration. The Mayor hires his Chief of Staff and the Chief of staff hires and is the direct supervisor to the rest of the staff in the Mayor's Office. We are political appointees working on a contract that aligns with the political term in office.

[Bigtime]

Originally Posted by Bunk

Yes. Quilting for Calgary was amazing. The Mayor told the story about it all day to different groups.

We received two of those quilts yesterday, what a touching gesture.

[jayswin]

Originally Posted by Slava

Sure, but they're not. The taxes are based on the market value? If my place is $450k and your place is $450k then we both pay the same. While you contend I use more services because I live further away, its a generalization. Maybe I walk to the C-train and someone who lives closer drives in. Maybe I work 3 blocks from my house, or have a home office. Its just silly.

Never mind the fact that someone with a ten percent higher property value pays more taxes (as in your example), there is just no proof that the guy in the condo uses less services or costs the city less money. What if they call the fire department 8 times this year, recycle absolutely nothing and have a family of 4 living in that condo whereas the suburban dweller is single, composts everything and uses very few services? Just because you live in a condo doesn't mean you're more sustainable.

Yeah, what about the hundreds of thousands of Calgarians that don't work downtown? The tens of thousands of people that live in the SE and commute to Foothills industrial?

How many people actually work downtown, is there a known figure? It can't be more than a couple hundred thousand, can it?

[Freeway]

Bunk, IF Calgary were to explore a 2022 Olympics bid, how involved would city administration be? Is it something that public officials would be working on or something that private individuals, such as but not necessarily Flames ownership, would be undertaking?

[MrMastodonFarm]

Originally Posted by flameswin

Yeah, what about the hundreds of thousands of Calgarians that don't work downtown? The tens of thousands of people that live in the SE and commute to Foothills industrial?

How many people actually work downtown, is there a known figure? It can't be more than a couple hundred thousand, can it?

http://www.calgarydowntown.com/resources/facts.html

Number of Downtown workers over 140,000

I'd imagine that figure is a little higher now as it's 2-3 years old.

[SebC]

Originally Posted by CaptainYooh

A growth-oriented municipality can contribute positively to the harmonious suburban housing development by specifying that every major housing type is represented in each new community in fair proportions.

Now that's social engineering!

[jayswin]

Originally Posted by MrMastodonFarm

http://www.calgarydowntown.com/resources/facts.html


I'd imagine that figure is a little higher now as it's 2-3 years old.

So even if it's 180k now, could we argue that maybe the inner city people live in a bit of a bubble, thinking most of the city commutes downtown for work and free time, when maybe there's actually 1 million people who don't work downtown, and maybe a lot of those people actually live closer to where they work than if they were to live in the inner city?