WE CAN’T AFFORD SPRAWL

Some folks claim that more homes built, even in rural areas, means less property taxes. This is a myth. Read on to see why.

Since the 1960’s scores of studies have researched this subject. They all come to the same conclusion: low density residential development on the urban fringe does not pay its way. That’s because the long-term cost of providing public services to homes far removed from the urban core exceeds - by a substantial margin - the property tax revenue generated.

Proponents of sprawl often disguise their actual motivation: to make money from financing, building, selling, insuring, landscaping, and otherwise servicing new single family homes on the less expensive rural land of the urban fringe. They say that everyone’s property tax burden will be reduced. These claims are demonstrably false.

Two recent studies compiled by the Federation of Canadian Municipalities, summarized here, make this clear.

• A 2021 study commissioned by the City of Ottawa demonstrated that servicing low-density greenfield development generates a net cost – that is, after subtracting property tax revenue – to the City of $465 per person per year. By contrast, high-density infill development provides the City with a net revenue – again, after offsetting property tax revenue with the cost of city services -- of $606 per capita per year.

That means that high density infilling (such as with apartments within the urban core) costs the taxpayer $1,071 less per person per year than does low-density sprawl on the urban fringe. High density infilling more than pays its way, whereas low density sprawl increases everyone’s property tax burden.

• A 2023 study by Metro Vancouver likewise determined that the costs of onsite infrastructure for a single-family home were 5 to 9 times more expensive on a per capita basis when compared to the costs of infrastructure for an apartment development.

Studies pioneered by the American Farmland Trust reach the same conclusion. They consistently find that for every $1 of revenue generated by residential development, it costs municipalities anywhere from $1.10 to $1.50 to provide services (roads, fire, policing, sewers, and water), depending upon the density of the development and its distance from the urban core that provides the services. Developing the urban fringe require miles of lineal infrastructure (water pipes, sewer lines, sidewalks, and roads) that benefit a smaller number of households, shifting the cost of these improvements to the public at large. Conversely, commercial, industrial, and agricultural lands generate more in taxes than they require in services.

Urban design groups like Strong Towns have undertaken return-on-investment studies that examine the per-acre cost of providing services versus the property tax revenue received. Those studies reach the same result: a large single-family home yields a high gross property tax in absolute dollars, but requires a disproportionate amount of land and infrastructure to sustain.

The reasons for the disparity between the cost of servicing low-density sprawl and high-density infill are tangible and irrefutable. The costs of building and maintaining the new streets, intersection improvements, street lighting, sewer lines and pump stations, water lines and pump stations, and stormwater collection and treatment required to service projects far removed from the urban core, together with the cost of providing police and fire emergency responses traveling longer distances from the nearest police and fire stations, dwarf the corresponding costs of providing these same services within the urban core area.

These cost differences are not eliminated by rezoning approval fees imposed on developers by many municipalities. Here in North Cowichan, for example, the average one-time Community Amenity Contribution or CAC (previously known as the Development Cost Charge or DCC) fee levied where land must be rezoned to allow new development in rural areas is currently about $8,000 per residential lot, or about $5,000 per apartment unit. Although this contribution may seem substantial, it is small compared to the long-term cost of extending urban services to such projects. That’s because the cost to the municipality/public does not end after one year, but continues forever.

Over time, the disparity between the cost of providing municipal services to, and the revenue received from, low density development on the urban fringe is substantial. The cost grows as aging municipal infrastructure increasingly needs repair and replacement, but it’s often overlooked by local politicians eager to portray themselves as fiscal conservatives. The upshot is that the developer profits mightily from sprawl, and the public picks up the tab.

That is why, according to North Cowichan’s Chief Administrative Officer, the Municipality has accumulated a massive unpaid debt for essential but long-deferred infrastructure repair and replacement of $359 million. This debt is increasing each year, like a ticking fiscal time-bomb.

The public pays for sprawl in many ways:

• Greater tax burden as taxes fail to keep pace with the cost of extending expensive urban infrastructure long distances

• Growing fiscal imbalance as the expense of repairing and replacing aging infrastructure is deferred

• Lost farmland, diminishing our food self-sufficiency

• Lost open space including forests and potential parkland

• Channelized streams

• Polluted stormwater runoff dumped into our streams and lakes

• Increased traffic traveling long distances polluting the air we breathe,

• Lost sense of community when neighbourhoods are spread over vast distances

• Less time spent with family as commuting times grow, causing greater alienation of children lacking critical time with family and pets

Sprawl is not just a fiscal disaster, but an environmental and public health menace. Let’s not add to this problem by approving more.