Westboro tizzy (iv) – of benefits, incentives, and selling out

I was at Development Committee some time back when they voted on the Our Lady of the Condos development on Richmond Road. Then-councillor Leadman could count heads as well as anyone, and no doubt knew the vote was going against her. The audience was chock full of angry neighbours/voters.

At the last minute, she changed tactics from opposing the project to one of “if you’re going to approve it, at least get some community benefits”. The charge in the air was electric. The audience was aghast. Betrayal! Selling out! 

No matter the logic of the move, the optics were terrible, my sinking stomach knew Leadman had just blown her re-election chances.

I see similar emotions at work in Westboro today surrounding the Roosevelt Avenue intensification by Uniform Developments. Hobbs can see as well as anyone that Committee would most likely (guaranteed??) to approve the change from 200 mid-rise to 200 high-rise condos. And if they didn’t, the appeal to OMB would succeed, simply because intensification is in accord with provincial and city policies and plans. And because planning practice today favours “tall and thin” over “short and squat”  ( I know, I know, such pejorative terms, is there a better alternative for short and squat?).

So Hobbs opted to get some offsetting benefits while she could, at the pre-approval stage (you can’t negotiate them afterwards in the current environment, but down below I will suggest how one could…). She got $200,000 from the developer for streetscaping and traffic calming. She got the cash-in-lieu of parkland money committed within a block of the building. (see previous post) And she got a sizeable chunk of the condo private property opened up to public use as parkspace, including one or two ponds. The developer pic, of course, make this landscaping look very attractive.

The opposition to these benefits is predictable. “She didn’t ask ME”; those are the “wrong things to spend money on”; the benefits “will make things worse” for cyclists, or pedestrians, or residents, or children, or all of the above. “They’re just benefits for the developer”; “the developer isn’t paying enough”. And so on. Stronger still are the insinuations that the councillor betrayed the residents, she sold out, she catered to her financial supporters (she had a lot of campaign contributions from the real estate industry).

Would residents have preferred she voted straight against the project, lost the vote, and then had no parkette, no benefits? (Rhetorical question, no reply required).

And the situation is going to get worse, much more acrimonious, when Sec 37 is implemented in Ottawa. That procedure formalizes the harvesting of “benefits” from upzoning.

I have written here before why I think this course of action is bad. Each benefit must be negotiated, there cannot be a formula applied to similar projects, as that would make the benefits a “tax”, so it adds uncertainty to every development proposal. And uncertainty means higher costs. The Sec 37 benefits are a levy imposed solely on new condo buyers.

Picture the lucky couple starting out, struggling to get on the housing ladder, who now have to pay thousands of extra dollars (if they can still qualify for the higher mortgage) so established residents sitting on windfall-profits on existing houses worth three to five times the condo values, can enjoy some freebies. Talk about the 1%…

Residents who suspect nefarious actions by a Councilor over a $200,000 benefit … what are they do think when they realize the city is salivating over a $1,000,000+ payout from a developer? This is big money, and local politicians are always eager for OPM (Other People’s Money) to spread in their ward. So did the City approve that rezoning on its objective planning merits or did it just want the big bucks? Was my councillor really respecting my interests or did (s)he just want the moola?

The picture ain’t much brighter for the developer, who faces demands for ever more overhead spending. I suspect they will find it akin to extortion. Currently we expect Danegeld from big developers, but soon it will be expected from single infill builders. And I fully expect residents will soon want money to grease approvals that fit within the existing zoning too.

The current process, whereby an alert councilor might “cajole” some money out of a developer (which is really a tax on new buyers) is capricious and subject to bad optics.

It’s proposed replacement, Sec 37, is equally subject to charges of the City being in a conflict of interest as it financially benefits from changing its own zoning laws. At least election contributions were voluntary …

I think there is a better alternative. . A project of any size, whether a single, a duplex, a small townhouse group, or a high rise condo, should all be subject to the same rules. The City collects development charges to cover the costs to the city of new development. If they aren’t enough, raise them.

For the local neighbourhood benefit, consider  the long term tax revenue stream of a new infill project. A 100 unit condo will generate at least $3000 of taxes per unit, or $300,000 for the whole building. Larger buildings will generate more tax revenue, smaller projects less. The city could simply adopt a policy that it will keep 98 years of the next century’s tax stream for itself. It would commit to spending the first two years of the tax revenue (or its equivalent, if it is not permissible to earmark tax revenue) on local improvements.

So, that 100 unit condo would prompt the city to provide $300,000 (per year, times two years) in local funds for playground improvements, streetscaping, bulb outs, benches, underground wiring, or whatever. Payable as soon as the building generates tax revenue. A single infill house would prompt local spending of $5000 x 2 years = $10,000. In today’s political model, that spending would be negotiated among the developer, the councillor, the community associations, and city staff.

Local residents “suffer” from the city’s intensification policy; in this scheme there would be some local offsetting benefits that residents could see and enjoy, regardless of their councillors negotiating ability or interest, and free of another tax on new home buyers.  Free of charges of corruption, selling out, and other moral hazards. Spending public tax dollars on public works.

A small policy change like this could go a long way towards restoring faith in the planning process. It still retains a bias towards development over no development, but it is at least predictable and transparent.


For those whose eyes are tired of reading here, I will be yakking on and on, on CBC Morning on Monday after the 7.30am local news. Topic: short and squat vs tall and thin; Does height matter?

17 thoughts on “Westboro tizzy (iv) – of benefits, incentives, and selling out

  1. The picture with the bike makes me think that there is some illegal sidewalk cycling going on right there in the artist’s depiction.

    As a regular cyclist, I am never 100% sure what constitutes a “bike path” versus a “sidewalk” (I use an unreliable rule-of-thumb where concrete pavement means sidewalk whereas asphalt means maybe you can bike on it – but often these different types of paths transition into one another which confuses me).

    That being said, the path shown in the picture looks a lot more sidewalky and narrow than the current (ambiguous-use) path that runs along the transitway corridor. The picture shows directly adjoining walkways and benches tight to the edge. It makes for a nice picture but the real world implementation should consider that this is currently a useful thoroughfare for cyclists and making it a formal pedestrian sidewalk would cut it off.

  2. The only challenge to your system of levies is that the city doesn’t collect property tax like the federal government collects income tax, i.e. more income equals more tax revenue.

    New houses will change the mix that people might pay, but it won’t add new revenue to the city unless they ask for it.

    Though I totally agree with your sentiment.

  3. SQUAT
    broad, chunky, dumpy, fat, heavy, heavyset, splay, thick, thick-bodied, thickset
    Where is Randy Newman when you need him (remember his song Short People which served to rebrand the image of short people, me included?) I would say I am surprised at the lack of creativity of our architects and developers, who seemingly can’t offer attractive lower buildings, except of course we all know that they can design these and do. Why aren’t we shown pics of these buildings which surely must exist. We suspect city staff, planners, developers, are offering pictures of squat buildings as a ploy but why can’t someone come up with some pics of attractive low buildings just to show that low doesn’t have to be squat and ugly. A good job for an unbiased councillor, say. By the very definition of squat , why wouldn’t they be embarrassed to be showing these pics. If I were an archictect I would consider myself a failure if I designed something broad, chunky, dumpy, etc. and yet we are shown these buildings as our alternative to tall.
    I suggest we don’t use the term squat at all. Tell the developers and architects to show us something low and beautiful or consider changing their occupation to something they can handle before someone reports them to their association for violating the rules. Surely they have had to earn their credentials?

    to sit in a low or crouching position with tIhe legs drawn up closely beneath or in front of the body; sit on one’s haunches or heels.
    2. To crouch down or cower, as an animal.

    3. to settle on or occupy property, especially otherwise unoccupied property, without any title, right, or payment of rent.
    to settle on public land under government regulation, in order to acquire title.

    Nautical . (of a vessel, especially a power vessel) to draw more water astern when in motion forward than when at rest.

    verb (used with object)
    to cause to squat.

    to occupy (property) as a squatter.

    Naturally, I am tongue in cheek. In the upcoming summit on planning that Mayor Watson spoke about ,due to happen in January, we had better be aware that an array of planning detail and process is going to be presented to us. If we want quality communities that we can live with we had better be prepared to state our viewpoints strongly. Unlike the dumpy buildings we are shown, our opinions have to soar.

  4. Paris, Stockholm and London (to name a few) all have beautiful areas of nothing but 4-6 storey apartments. They are great places to live and are far from ugly. Why does a 4-6 storey building need to be considered short and squat. We have nothing in Ottawa to compare to some of these places and never will with this type of thinking. What a load of garbage.

    1. In Ottawa, the NIMBIES and open-space fetishists insist on segregation of uses and lots of pointless stupid open space. Which is why so much of Ottawa ends up looking not like the European examples people pretend to aspire to (right before NIMBYing anything remotely like a dense, old, European city), but rather like photo number 10 in this selection:


      1. You’re making generalizations that frankly you don’t have any evidence to support, and it’s all the more bizarre to be making the claims you are in the context of the specific proposal for 335 Roosevelt.

        In this case, it’s the developers who are the ones coming up with all the “pointless stupid open space” so that they can justify their tower-building fetish. If the developers had stuck to the zoning, ironically they would have had less of the pointless open space.

        And before you can accuse people of “pretending to aspire” to European examples and “NIMBYing anything remotely like a dense, old, European city” we first have to have a proposal come along for something that looks remotely anything like a dense, old, European city. Almost every time there is zoning in place for typical European streetwalls of 4-6 storeys, the developer insists on having it rezoned to twice that or more. You have absolutely no evidence whatsoever to support your accusation for the simple fact that there is no such example for anyone to have ever opposed in the first place.

      2. And David, any time a developer proposes four to six stories in an area of one- or two-storey pre-existing buildings, the NIMBIES go berserk.

        Anything resembling a street-wall is decried by the same NIMBIES who demand setbacks and green space and open space and green open space and open green space. And if they’re not demanding that (or on top of that) the NIMBIES demand “something” be done about “overlooks” to protect their precious privacy.

        That’s how the Landry Street townhouses, which could have been classy and urban, ended up looking like 1970s suburban garbage, with their anuses facing the street instead of their faces. The idiot NIMBY-neighbours insisted on it.

        It’s the same old story, over and over and over again.

        People in this town are utter idiots.

  5. Beauty is good. Imagination is good. But for the residents, esp of the residents of the building, the environs need improvement. Intensification of residences should be contingent on the intensification of bike paths, shopping, parks,and public transit. So raise them up near the transitway, build more parks, widen bike paths, provide pedestrian paths.

    1. Well, it’s two story buildings in the neighbourhood. So, raising them up near the Transitway would take you to, oh, six or seven stories, if you don’t want to stick out like a sore thumb.

      You can be imaginative and creative in six or seven stories.

  6. @WJM: There’s nothing inherently problematic about sticking out. But if we’ve consulted the neighbourhood and come up with a plan that everyone (including the planning department) has agreed to, and the city has made it part of the plan, it is not the planning department’s job to declare that the consultations were all a ruse, and that the community design plan stating that 335 Roosevelt should be no more than 7 stories isn’t worth the paper it’s written on. After that sort of snub to the residents who worked to draft the CDP, you have the beginnings of the dissolution of civil society, since the bureaucracy has decided to run amok.

    The planning department has shown that it can’t be trusted. A plan in plain black and white that specifically names this site isn’t binding on them, apparently. So why should citizens offer to participate in community consultations, when it’s been made obvious by this that the planners will do what they want regardless of the instructions given by the city in the official plan?

    If Peter “Don’t you dare applaud Councillor Holmes in my meeting” Hume and Jim Watson truly want developers to respect the plan, their first step is simple: order the planning department that, effective immediately, they are to reject all proposals that would require height or density amendments. Developers can bring proposals to council, in full openness and transparency; the community can be engaged, and then and only then should planners be involved. That gets the community in on the ground floor, just like the developers. Or are you suggesting developers deserve special, early access to the process?

    RIght now the planning department works with developers behind the scenes with no public inupt until the planning recommendations are made. That may be appropriate for Kim Jung-Un, but I’d hope that Jim Wats-Un would be more open to the public and engage them. Planners beconme captives of the developers – the plans proposed are now “theirs”, so they take an emotional ownership stake in supporting the developers. Councillor Holmes, at the 5 December meeting, evn asked how often the planning department disagrees with developers. After a long attempt at recall, Councillor Hume came up with possibly two in the past year. Either Ottawa developers are leading-edge visionaries, or the planning department needs some distance.

  7. On the topic of this post itself, let’s just back up here a moment. S.37 would only apply in cases of upzoning, so it’s not per se a levy on new condo buyers; it’s a levy on the windfall profits resulting from upzoning.

    And the economics on it are far from clear that it even raises the cost that consumers pay. If we take the infamous 335 Roosevelt example, the same number of units are proposed in the taller version as the lower zoning would allow for. The developer wants the extra height so they can sell the upper floor condo units for more (in an odd way, that actually increases the cost of the lower floor units as well since there are also fewer of them, or, to think of it another way, the price of each of 200 units in a building under 7 storeys will be less than the price of the 100 units below the 7 storey mark in a 200 unit development with 14 storeys – your hypothetical “lucky young couple” would be better off with the 200 units being in a 7 storey rather than a 14 storey building). Most of this is windfall profits to the developer that result from the upzoning because the presumed cost of building a taller condo is not a lot more than that of building a conforming one.

    So what you’ve got, before S.37 is levied at all, are consumers paying more to get into a development that is taller, most of which represents windfall profits to the developer.

    Now if S.37 is applied, what happens? Do the cost of the units go up or does the levy come straight out of the windfall profits? If the developer was already maximizing revenues (and therefore profits) by setting the prices at the market clearing rate, then the levy comes out of profits – and not as an additional charge. The developer could only raise the price to “compensate” for a levy if they weren’t already charging the revenue-maximizing price in the market (which doesn’t seem too likely).

    Finally, it’s not like area residents by and large “benefit” from sitting on land that has increased dramatically in value: they only benefit when they sell and if the area is becoming more attractive than presumably they would actually want to stay around longer. In the meantime they pay more in property taxes

  8. Do you have a link to CBC for your discussion on: short and squat vs tall and thin; Does height matter?

    I was unsuccessful in finding the item.

    1. Roy – I couldn’t find it either. They must have rated it lowly, and thought that no one would want to find it again. You might want to email the CBC and ask for a audio copy, then they might post it. However, one reader did hear it and tell me it sounded just like a regular blog post but in interview format. I wasn’t sure if this was a compliment or not.

  9. DavidPJ: I appreciate your argument that the (formerly) lower floor units in a high rise will now be priced higher than before because more units will be higher. And I concurr that the cost to construct the higher floors is roughly the same as the mid rise. So yeah, he is selling more floor space at a higher price because of the views.
    Now how does the bank that finances him look at it? They take his costs to build allowing the usual 15% percent profit. Sec 37 adds a million bucks to the costs, add his profit and it’s now 1,115,000 additional price on those units. And so many builders credit facility is based on ratios, such as cost to revenue, the raised costs will definitely translate into increased retail prices. I really dont think Claridge pays the million bucks out of his profit margin, I think it gets rolled back, marked up significantly, into the selling prices.
    I also wonder, if the sec 37 is from “windfall profits”, what happens if the developer goes bust? It has and does happen sometimes. Does the city keep its share of the non-existant windfall profits? I’ll bet it does.
    You didn’t address the conflict of interest the city now has when it regulates development AND profits from rezoning. I’d like to hear your opinion. Can residents ever trust the city again?
    BTW, I do appreciate that ground homeowners only profit when they sell, or their estate does, but they are still profiting in the meantime from improvements paid for by the condo buyers.I wonder what would happen if condos were priced like air line tickets — $39 for the flight, $115 in taxes and fees, etc. Would buyers think differently if they knew the cost breakdown?

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