Higher housing density helps city, BSD finances

Opinion

Hey there, time traveller!
This article was published 29/06/2024 (440 days ago), so information in it may no longer be current.

Imagine there was a plan to solve Brandon’s housing shortage — both affordable and market-based. And imagine if that plan, if implemented properly, could dramatically increase the property tax revenue the City of Brandon and the Brandon School Division each take in annually, without raising property tax rates.

That would free up money to lower property tax rates, offer better recreation options and address the city’s infrastructure deficit. It would also enable the school division to hire more teachers and educational assistants, repair our aging schools and offer students a range of programs and activities not currently available.

And imagine if that plan could be implemented without incurring massive infrastructure costs, and without adding significantly to the current cost of emergency services, snow-clearing and sanitation services.

All of that likely sounds far too good to be true, but it’s not.

On Tuesday evening, Brandon City Council will debate, and likely vote on, its “inclusionary zoning” plan. For those who haven’t been following the issue, the plan addresses the fact that there isn’t enough correctly zoned land in the city to meet the growing demand for the multi-unit housing. In order to address that problem, the new plan proposes to combine “single detached” and “low-density” zoning categories into one low-density zone.

Such a change would permit the construction of multi-family housing units — up to a fourplex — to be built on lots currently zoned for single-family housing. Doing that would also satisfy the eligibility conditions under the federal government’s $5-billion Housing Accelerator Fund.

It would be a major step toward solving the city’s housing crisis, and would unlock access to millions of federal dollars to help achieve that objective.

As the council vote draws nearer, we have heard a number of arguments both for and against the zoning plan. Proponents of the strategy say it will increase the range and supply of housing options in the city, and will make neighbourhoods more inclusive and representative of the city’s population.

Others respond, however, that the plan will permanently destroy the character and makeup of single-family neighbourhoods. Some have argued it could hurt the value of homes in those areas.

Conspicuously absent from the discussion is the positive impact that inclusionary zoning and higher-density housing within the city’s existing footprint would have on the city’s finances, and on taxpayers’ wallets.

In past columns, I have argued that single-family neighbourhoods on the outer edges of the city are long-term money-losers for the city. They don’t produce enough tax revenue to cover the range of costs incurred to service those areas.

That conclusion is backed up by an op-ed written by Winnipegger Michael Durand Wood (“The case against municipal growth taxes”) which was recently published in the Winnipeg Free Press. In that opinion piece, Durand-Wood wrote that “A 2023 study of Metro Vancouver found that compact, walkable, mixed-use development requires five to nine times less infrastructure per person than low-density, single-use, car-dependent development.”

He added that “a 2021 study from the City of Ottawa showed that servicing low-density greenfield development costs the city $465 per person annually, while high-density infill development provides the city with $606 per person of net profit annually.”

He concluded that “The issue we face isn’t a ‘spending problem,’ nor is it a ‘revenue problem.’ It’s an insolvency problem from decades of unproductive investment in a development pattern that returns less than it costs.”

He’s right. A review of taxation data from the city’s own website vividly illustrates that higher-density housing is already increasing tax revenue for both the City of Brandon and the Brandon School Division.

For example, a four-plex on the 400 block of 15th Street currently generates gross taxes (before rebates, etc.) of $12,210 annually, while the single-family home next door on the same-size property generates just $3,834.93 in gross tax revenue.

A fourplex on the 500 block of 26th Street generates $13,359 in gross tax revenue, while the single-family home across the street, on the same-size lot, generates just $3,963.

A triplex on the 400 block of Park Street generates $9,016 in gross taxes for the city and school division, but the single-family home next door, on the same-size lot, generates just $4,272.

A six-plex on the 700 block of 10th Street generates almost $11,000 in gross tax revenue, but a single-family home across the back lane, on a same-size lot, generates just $3,151.94.

Finally, Brandon’s best example of higher property tax revenue through redevelopment is the large building located at 457 Ninth St. (Renaissance Station). When it was constructed, it replaced a few older homes and a single-storey office building. The 76 taxable units now on the property generate a total of more than $275,000 in annual gross property tax revenue. For comparison, the homes on a similar-sized and shaped property one block to the east generate a total of just $35,799 in gross taxes.

That’s just one part of the “profit through density” argument. Another component is the reality that increasing density — by building upward, not outward — is a far more efficient use of existing infrastructure. In most cases, an increase in density does not necessitate an increase in sewer and water capacity.

Compare that to the millions of tax dollars we are currently spending in order to extend roads, sidewalks, and sewer and water supply to undeveloped areas on the city’s outskirts.

Finally, the additional tax revenue earned by both the city and BSD through higher-density housing could mean lower taxes for homeowners.

It could also mean more money for facilities such as a new aquatic complex, and more money to repair our crumbling curbs, streets, sewers and sidewalks.

Given the many potential financial benefits that could flow from the city’s inclusionary zoning plan, an obvious question emerges: Why is nobody at our city council table talking about those benefits?