Burdened with one of the highest debt levels in the GTA, York Region officials are pressing some municipalities to fast-track suburban sprawl in an effort to tap into lucrative development fees.
With a debt of $1.95 billion and growing, York Region is counting on the levies from current and future development of single-family homes in Vaughan, Richmond Hill and Markham to pay back the money it borrowed to build extensive water and sewer infrastructure.
But encouraging this type of development runs counter to the province’s Places to Grow Act, which has mandated cities to begin building up instead of building out.
And critics warn, it’s a plan with the wrong incentive at heart: it puts the need for development dollars ahead of good planning that can, for example, ease congestion.
“We are accelerating our growth, but there is no acceleration in transportation infrastructure,” said Deb Schulte, a Vaughan regional councillor and critic of the region’s efforts to speed up development in the city. “Traffic is the biggest problem on my residents’ mind. We are not making it better, this will make it worse,” she said.
Dividing the debt by population shows that every resident in York Region owes $1,840. In Toronto the amount is $1,305 per person.
Almost 78 per cent of York's debt charges are based on money it hopes to recover from future growth.
“How do we fund growth? We fund it through development charges,” said Edward Hankins, the region’s Treasury Office director. “But since we don’t get paid until a new resident moves in, we actually have to borrow the money in advance.”
A single or semi-detached family home brings in $40,421 in development charges. A condo less than 700 square feet brings in almost $17,000.
Hankin’s said it’s the “chicken and egg” situation in which the region has been putting money into infrastructure such as the “big pipe” sewer system and VIVA rapid transit buses which will help to support the 1.5 million people projected to make the region home by 2031.
But Paul Bottemly, manager of planning for York Region said there is uncertainty around the future housing market and concerns that the condo market could slow.
“That’s going to have a huge impact on our debt situation,” he said. And the need for development charges isn’t going away. If anything, it’s increasing, he added.
“We’re continuing to spend over the next 10 years, another $4 billion, and so we have to make sure that our development charge revenue is keeping pace with how much debt we can carry in the future,” he said.
In a presentation in June, Bottemly warned Vaughan it could face a potential shortage in single-family homes over the next five years if it didn’t speed up approval processes for new developments. In 2010, the city introduced changes to their official plan that would require five secondary plans, a public meeting and a natural heritage study, before new plans could be approved by the city. Introduced by Councillor Schulte, the change was made in an effort to slow down development of 9,600 homes in north Vaughan on both sides of Hwy. 400 that would expand the city’s urban boundary and cut into “white belt” rural lands — the final layer of protection for the greenbelt.
Schulte believes Vaughan can hit its growth targets by boosting density, and she fears more expansion will put development pressure on the greenbelt.
Last week, Vaughan council voted to amend the official plan to speed up the approval process. The region expects a response from Richmond Hill and Markham by September.
But Bottemly said the push is not about encouraging sprawl but about ensuring there is “the right balance in the market of intensification and low-density.”
Mississauga was for years the GTA poster child for single-family home construction and the sprawl it generates. But in a 2008 interview Mississauga Mayor Hazel McCallion, the GTA’s longest-serving mayor, said this: “The biggest regret has been, and I hope that other municipalities will also concur, is the lack of transportation planning in all our development plans. The city started out with single-family homes ... You can't build a public transit system based on single homes. You need the density.”
And there are other alternatives to the buy now, pay later approach used by York Region.
Halton Region, which has a debt of $255 million, has been able to put the pressure on developers to pay up front, and contribute more to help pay for the region’s fast-growing infrastructure needs.
“The onus is put on the residential developers to put the money up, because we don’t want to incur debt,” said Mark Scinocca, Halton's director of financial planning and budgets, who calls York region’s strategy “risky.”
“Debt is always great in the beginning, but then your flexibility gets reduced and you have to issue more debt down the road,” he said. “It’s just not sustainable.”
Chasing development dollars was also not the model the province had in mind when it legislated the smart growth plan, said York University associate professor Mark Winfield, who studies urban sustainability.
“The development charges are a means for paying for the infrastructure that you have decided you want in your plan,” he said. “You don’t want to be in a situation where your plan is being shaped by your desire for development charges.”
That’s why the province should be stepping in, or at least keeping an eye on the situation, said Sony Rai, a member of the citizen’s environmental coalition Sustainable Vaughan.
But it seems to be turning a blind eye, he says.
“Why is the province allowing the region to undermine the Places to Grow Act and accelerate development housing for the sake of recuperating development levies,” he said. “And the question is: what happens when the developable land in the region run out? Is the greenbelt next?”
Debt across the GTA
Most recent debt calculations within regions:
York Region
Debt: $1.95-billion (debt including that of municipalities)
Population: 1.06 million
Per capita debt: $1,840
• Toronto
Debt: $3.264-billion (net debt)
Population: 2.5 million
Per capita debt: $1,305
• Peel Region
Debt: $1.06-billion (net debt including municipalities)
Population: 1.2 million
Per capita debt: $883
• HaltonRegion
Debt: $255.5 million
Population: 500,000
Per capita debt: $511
• Durham Region
Debt: $297.8-million (debt including municipalities)
Population: 636,915
Per capita debt: $467
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