The City of Edmonton is growing and evolving. Where, when and how we grow plays a key role in helping achieve the outcomes in the City Plan.
Smart management of growth will help ensure we are building complete communities where residents have access to essential city services like public transit, parks, recreation, and waste services, as well as various amenities and good quality infrastructure.
Smart growth will also help Edmonton course correct away from costly, inefficient, sprawling growth towards more fiscally and environmentally sustainable patterns of development that see us grow in and up, instead of out.
But how do we manage and guide growth in ways that will create prosperous, equitable, vibrant, and climate resilient communities?
In order to guide growth, we need various tools for implementation, including tools like Zoning Bylaw Renewal and District Planning. Another key tool we have for managing growth is the City’s Growth Management Framework. It establishes a process for where, when, why and how the City supports growth and development, and works with Growth Monitoring to measure progress toward The City Plan’s goals.
To support this work, the City is introducing something called a Substantial Completion Standard. The idea behind Substantial Completion is to create a framework to determine when enough of Edmonton’s developing neighbourhoods have been sufficiently developed into complete communities to justify new growth at the edge of our urban footprint.
The proposed framework is based on three required metrics:
The metrics the city will track, but are not required are:
Some factors are proposed to be required because they are under the control of developers, whereas the factors simply being tracked typically require substantial government investment.
While Substantial Completion may seem like an isolated urban planning conversation, the establishment of substantial completion standards have a significant influence over Edmonton’s long term fiscal viability and climate resilience.
The Costs of Sprawl
We know that sprawl costs us. Taxpayers bear the burden of servicing and maintaining new communities.
Our ability to deliver the programs, services, and infrastructure Edmontonians expect declines if we spread ourselves too thin. Current and future Edmontonians will pay the price of low-density, high emissions development patterns.
Ensuring we are growing in a way that supports tax efficient, low carbon lifestyles is imperative.
When new suburbs are built, the infrastructure developers install becomes both an asset, as well as a liability. Unless development pays for itself, a maintenance gap emerges that, over time, adds cost to city operations.
For context, due to historic patterns of low density growth and outward expansion, Edmonton is now facing a staggering shortfall of $470 million a year between our ideal infrastructure renewal investment and what we are actually spending. This means that we can’t afford to maintain existing community amenities like rec centres, parks, pools, and rinks, and that our roads, sidewalks, and bridges risk falling into disrepair.
This infrastructure deficit cannot be resolved overnight, but it is critical that we start to make progress towards reducing this shortfall and ensure we are not digging an even deeper hole in the process.
Furthermore, residents of new neighbourhoods demand community amenities like rec centres and libraries, as well as core services like public transit and snow clearing. If we are not managing growth effectively and cannot afford to deliver these services and amenities within a reasonable tax rate, communities will begin to lack the amenities necessary to make them attractive places to live.
In short, we can’t afford to place further multi-billion dollar liabilities onto our balance sheet, and we can’t afford to lock ourselves into new growth without a clear line of sight to how we will deliver on the promise of complete communities, which is why substantial completion is such an important conversation.
Show Me the Money
While the above section talks about the cost of growth, the flip side of this conversation is how we pay for it. The city has limited tools for revenue generation, with the primary mechanism being property taxes.
One of the common arguments for densification is that it is more tax efficient, meaning the city is able to bring in more tax revenue without having to invest additional funds in the types of programs, services and infrastructure discussed above. Similarly, ensuring new neighbourhoods are substantially complete before considering approving new ones helps our city course correct towards tax efficient growth.
To illustrate which areas are generating significant tax revenues we have produced the following maps.
Data source: City of Edmonton Open Data, Property Assessment Data
As you can see, Downtown generates a very large amount of taxes. It is not a stretch to say that it subsidizes the rest of the city. Our commercial and industrial areas are also clearly visible. You can see large industrial/commercial areas throughout the northwest and central southeast, which contribute substantial revenues to our city’s coffers.
Note that the neighbourhoods outlined in red are areas that are already approved for new development. You can see that because these areas have higher mandated density targets (p.59), they are in fact generating more tax revenue than the inner-ring suburbs built between 1960-2010. However, even though these areas generate more tax revenue than older suburbs, they still are not coming close to paying for themselves. The following case study of the Decoteau area illustrates this.
Case Study: Decoteau
Preparation of the Decoteau Area Structure Plan was authorized in 2010 by City Council. Decoteau will be a set of 6 new neighbourhoods in Edmonton’s Southeast. Even though Decoteau will be subject to higher density targets, the cumulative residential tax revenue will be hundreds of millions of dollars less than our costs to service and maintain it over the first two decades alone.
By 2050, there will be a $400 million (2014 dollars) gap between our revenues and the costs of servicing and maintaining this area. The assumption is that this shortfall will be made up by off-site commercial and industrial development outside the area.
While it is argued that off-site commercial development from the jobs these Edmontonians will need offsets this deficit, the vast majority of that commercial development would occur whether or not we add population at the fringes or in existing areas.
By maximizing the infrastructure we already have we could be reducing our costs and ultimately your taxes. The redirected investment would go a long way towards reviving areas struggling with vacancy, such as downtown and other core main streets. Protecting and maintaining a competitive commercial tax rate is also critical for attracting and retaining industrial development.
The Edmonton Metropolitan Region is home to some of Canada’s most productive agricultural land. It is fairly obvious that developing prime agricultural land and sensitive ecosystems damages our environment. What is less obvious are the transportation-related emissions induced by low density development. Simply put, people are more likely to drive as distances increase to meet their daily needs.
Theoretically, if we are building complete, 15-minute communities this should reduce transportation-related emissions. The problem is that we are not. This is where substantial completion comes in. Is a neighbourhood substantially complete if it lacks bus service, active transportation infrastructure, recreation facilities, libraries, and parks? These are all integral components of a 15-minute community as outlined in the City Plan, yet we have no surety that we’ll be able to deliver. At the same time, existing communities are paying more and more as fewer and fewer amenities are available.
Data source: City of Edmonton Open Data, General Building Permits.
This map shows where we’ve seen residential homes added over the last 15 years. As you would expect, the outer ring of new neighbourhoods greatly outweighs the growth in the core and Downtown. There is a small amount of infill gently adding density throughout some mature neighbourhoods, but we are a long way off from our target of 50% of new homes being added through infill. From an environmental perspective, it’s also staggering to see just how much land we have consumed in 15 years.
Note that a significant portion of greenfield land surrounding our city is already slated for development (seen in red outlines). The Area Structure Plans for these lands were approved many years ago, and it would be extremely challenging for a Council to reverse those decisions. That said, what we do have the power to do is chart the course towards a more financially responsible and responsible future today, and to be clear about our intent to abate the endless expansion that has persisted for decades.
If we hope to achieve the vision set out in Edmonton's City Plan of a prosperous, urban, and climate resilient city of 2 million, we must carefully plan, enable, and manage where, how, and when we grow.
Substantial completion is a critical part of this conversation. As Council prepares to discuss this tool, I believe we should also be considering how substantial completion relates to our infill targets. Currently, our infill targets are neither tracked nor required in the substantial completion framework. Understandably, greenfield developers do not want their lines of business to be tied to the success of another part of the industry. However, there is the possibility that if we do not tie opening future lands to the redevelopment of existing lands, we could miss our targets entirely, and face the economic and environmental consequences outlined earlier in this blog.
We need to look at the holistic picture of costs and revenues and be realistic about how quickly we can afford to grow. We must refrain from making decision that may result in short term gains while locking us into higher costs and liabilities down the road.
Greenfield development is often said to deliver more affordable home prices. While individual home prices are important to individual homebuyers, the City’s capital and operating costs needed to support these new developments must be considered. Paying for new communities can impact all Edmontonians through both residential and non-residential property taxes, and the availability of jobs. This means that a new homebuyer's low price home also results in other homeowners higher costs of ownership, and higher rents for renters. Equitable access to city programs, services and infrastructure also matters and is a cornerstone of affordability.
Phasing growth in a way that maximizes affordability and access for all must be at the centre of the substantial completion conversation. If we do not have the resources to deliver and maintain the infrastructure and services people expect, we should not be opening the door to new growth that will add costs and make it even harder to maintain what we already have.