I was recently at a community meeting where adjustments to zoning by-laws were being decided. Typically, these meetings last 2-3 hours and many files are heard.
This meeting however was different. A developer was looking to subdivide a lot into two 50-foot residential lots in an upscale neighborhood in Courtice. The community had recently spent 60,000 dollars to have community-specific zoning restricting lot frontages and sizes significantly over the standard lot sizes in Clarington’s by-laws.
I watched on as community member after community member angrily spoke to council. They repeated the talking points of the developer destroying their community, Increased traffic making the area unsafe for kids to walk, and smaller properties bringing in less affluent people and renters which will make the community less desirable. This went on and on for two hours, and in the final decision council actually approved the development!
Why Did The Municipality Make This Decision?
The landscape across urban areas is changing. Urban planners over the last 2 decades have begun to realize the negative impacts that traditional city planning has caused. There is significant support that increased density helps with social, environmental and economic factors. This has contributed significantly to the growth plans here in Ontario as most municipalities have both growth targets for the number of homes they are supposed to create. They also have designated growth areas which are typically geographically small areas where roughly 50% of all newly created homes in the municipality are to be created by 2051.
The Social, Environmental, and Economic factors in support of Density
As most of you are investors, I will start with the economics of cities.
Plain and simple single-family zoning is a liability to cities. A city’s primary asset is the land within its boundary and its primary source of revenue is property taxes. The lower the density in an area the lower the revenue and the higher the costs of servicing those residents. Let’s take a high-level look at an example in modern-day suburbia in Oshawa: a single-family residence with 2 kids and a 50-foot frontage. Likely, they will be paying close to $4,000 in property taxes per year.
What do you think it costs the municipality to get those kids to school assuming they take the bus? The Ministry of Education receives its funding from property taxes and a recent study I looked into had the estimated cost to get one child to school on a bus was $1,000 per year! This is likely an understatement with a bus costing as much as $300,000 not including paying for a driver, maintenance and repairs, and gas. So if we look at the family described above, close to half their property taxes go just to getting their own kids to school!
Next, let’s assume every 100 years the city will be required to upgrade the sanitary and water services in front of your home. Currently, those upgrades will cost $1,000 per foot or more. With 50 feet of frontage, $50,000 has to be budgeted to upgrade the services just to your home, which is another 500 dollars a year!
You can see with just these two inputs we will be over 50% of the revenue the city receives from the standard residential home. I also never touched on any water treatment facilities and waste disposal which of course are other services provided to residents.
The only residential areas that are net assets to cities are high-density areas in a city’s core. This is why economically cities are looking to put so much growth in tight geographical areas to increase their actual asset bases. They are also encouraging smaller lots and higher density in residential areas to increase yields from these areas without putting a larger tax burden on individual residents; reducing the losses the city incurs from those areas.
Cities in the first world have come a long way since the industrial era in terms of environmental impacts. With the elimination of coal use, the largest contributor to air pollution in cities is vehicle emissions from commuting. Cities have often been depicted as having higher greenhouse emissions than other forms of settlement. This has come from greenhouse emissions by area calculations, with the densest areas producing as much as 15,500 tons of greenhouse gasses per square KM. In comparison, less dense urban residential and rural residential areas emit between 30 and 3,000 tons of emissions per square km.
However, if we switch the calculation to tonnes per household high-density areas produce as little as one ton per household while urban residential and rural areas produce 9-12 tons per household.
Without even looking at habitat destruction caused by sprawl it is obvious we have a clear winner.
Times are different than they ever were before. We no longer need large swaths of land for farming and agriculture and over time, can likely return land used for these purposes back to their natural environment. To illustrate this fact the Netherlands, one of the smallest countries in Europe, is the second largest food exporter in the world! This is due to having state-of-the-art hydroponics facilities that don’t require the use of land to produce crops.
These types of facilities will likely be spreading across the rest of the world reducing our need for farmland. Oshawa held a meeting in 2022 with investors and developers to see how they could bring about one of these facilities to our downtown. Personally, this would be something I would be very excited to see!
Lastly, environmentally friendly technologies and lower emissions are easier to achieve in larger buildings. Looking simply at volume-to-area ratios one can see that the larger the building the more likely it will be energy efficient. Larger condominium buildings now often use geothermal heating which is very economical to be put in at this scale. Often the geothermal company will install the system with no charge to the developer as the condo corporation will pay for the system over time. We are also seeing an introduction of mass timber construction which allows condo developers to build more than 6 stories with lumber. If this receives mass adoption, this will significantly reduce the total emissions of condo construction as concrete use is one of the highest emitters of greenhouse gases in standard construction methods.
Cities also provide multiple social benefits. First of all, walkable communities (communities where everything you require for your daily life is within 15 minutes walk of your home) allow young people to become independent sooner and older people to be independent for longer. In suburbia, most activities for kids require driving. This means until your children have a driver’s license, parents have to be involved to get their kids to any events. In walkable communities, youth develop independence at an earlier age as they can find their way to their events or friends’ homes on their own. Elderly people also keep their independence longer as all of the support facilities they need are closer, most places have elevators, and losing your driver’s license is not going to have a major impact on your life. Increased density areas have been found to reduce the amount of aid elderly people require, in turn reducing the burden on the economy. With our population’s average age ever increasing, this is no doubt something that policymakers are looking at.
Walkable high-density cities also allow for Inclusionary zoning or IZ. Inclusionary zoning policies require a certain portion of any development to have affordable units. The best practice is to have the affordable units interspersed throughout the building so those with lower social economic status are mixed in with those with higher status. This, in essence, is used to eliminate low-income areas across a city where crime is the highest and where development and investment are rarely seen.
Urban planners now understand that having large areas designated for low-income housing is a bad idea. With IZ, having multiple housing and income types within one building can help encourage social mobility and decrease crime.
Too Many Factors In Support Of Density
In reality, those community members didn’t stand a chance at the meeting. Mandating lot sizes in an area over 50 feet within several 100 meters of Courtice’s new downtown center could be seen as both unprincipled and iniquitous. More and more councillors and city planners are starting to see the costs of low-density areas and are helping encourage development.
With these changes starting to come about, we are excited to see and help change our cities for the better.