Calgary Herald editorial: Anti-sprawl = restricting housing supply

[Champion3]

What’s so evil about sprawl?

WILLIAM D. MARRIOTT FOR THE CALGARY HERALD

In a few weeks, a pathetically small minority of Calgarians will elect a new local government. Whether it is general contempt for government, loss of confidence in the democratic process or a lack of any substantive issues, the vast majority of Calgarians will be doing something else on Oct. 15. No doubt the lack of a party system in municipal politics contributes to our indifference, since we often vote for a political philosophy rather than the best candidate.

These days, every candidate appears to belong to the Green Party, although there are important variations in shading. Voters need to know whether a candidate is more of a libertarian ecologist or prefers command-and-control solutions. The libertarian would value individual freedom to exercise a personal ecological morality. The command-and-control types use government coercion to force ecological behaviours upon unco-operative citizens. Last year’s vote on mandatory recycling revealed those council members who are of the command-and-control persuasion. Thanks to their votes, we are now prohibited from dropping off our recyclables when we go for groceries, nor can we purchase a pick-up service that is about half of the government fee.

What about another green issue — urban sprawl? Almost everyone is against the disgusting urban blight called suburbia. The Calgary Chamber of Commerce recently weighed in against further expansion. The Haskayne School of Business has suggested we could solve the problem of obesity by building fewer freeways.

As an economist observing our real estate market, I have to wonder how these groups have failed to notice it is primarily supply constraints that led to our housing crisis. Everyone knows supply and demand determines prices. And everyone knows Calgary has recently seen record inmigration and record levels of economic activity. But Calgary’s population has always been growing and we have always been a wealthy city. We have also always had some of the country’s most affordable housing, largely because of abundant and affordable land. What is different is the imposition of anti-sprawl ideology and its effects on restricting land development. Calgary’s homebuilders are beginning to despair. A recent survey ranks over-priced lots as their biggest concern followed closely by a shortage of lots. In third place are excessive government development charges. New housing permits are declining, which means our home construction industry is contracting in the midst of the worst housing shortage we have ever experienced. Yet we still we have advocacy groups calling for more restrictions on development? It seems to me there are more than enough already.

As a homeowner, I view the crisis with mixed feelings, but we landowners shouldn’t be too smug. Estimates of Calgary’s increased real estate values for just the last two years are around $50 billion. This is a huge transfer of wealth to the propertied class from first-time buyers. It forever condemns lower-income families to the mercy of an obscene rental market, and has virtually erased the hope of home ownership for the next generation. Wayne’s World was funny so long as the premise was the arrested development of a few gen Xers continuing to live in their parents’ basements. Bronco’s World includes new districts with $400,000 starter homes that three years ago were selling for $200,000. And if you don’t like having to pay $100 per hour for a plumber who fails to show up, you can always go to the “you can do it, we can help” folks except that the promise of help rings hollow as there isn’t a sales associate for miles. The current real estate market almost certainly ensures that our labour shortage will never be solved.

It would be nice to blame the developers, but they are merely acting like good businessmen. If your development proposals are rejected by city hall, you soon get the idea there will be a shortage of serviced lots. This changes you into a speculator. If you are prevented from developing land, you may as well maximize your earnings from your existing inventory.

A society that fails to provide the necessities of life at an affordable cost is in trouble. A market-based society whose government hampers the market by artificially restricting supply deserves to be voted out of office. The problem with civic government is we don’t know who the government is. But here is a guide if you want to reverse the current policy. The only way to get your kids out of the house is to vote for the aldermen who were not green enough to force mandatory recycling.

[feepa]

^^ might as well sprawl right up to the us/canada border then.

[Boris2k7]

I read this editorial earlier. Can't agree with most of what Marriott says.

His position is entirely one-sided. Leave it to the economist to care only about the market and whine about the "big bad government." Nevermind the economic, social, and environmental problems that are exacerbated or even caused by sprawl, the plight of the developer must be all-important. Affordable housing is a probem, yes, opening up cheap land on the fringes of the city is NOT the way to handle that. You would have thought we had learned something over the last 50 years. I guess not.

Because of a policy of giving in to large land developers at the edge of the city, we've created a car-oriented, consumption based culture. The provision of civic services, such as your sewers, roads, and power, becomes a major problem, as the density decreases, the tax base spreads out, and the demand for further infrastructure grows. Even worse, now people find it so convenient to travel (just wait 'till that ring road is finished!) they are inclined to move away from the city and disappear entirely from our tax base, while still using our transportation infrastructure in their commutes to work.

I can't believe that people are still crying over curbside recycling. Currently, you either have to pay for a private service or own a car to drive your stuff to a set of bins (unless you are so fortunate to leave near such bins). How are we supposed to convince people to take up a higher density, transit-oriented lifestyle if they still need their cars for something so mundane as taking in the cardboard? The proposed program won't even handle organic waste. Then again, I doubt that such goals mix with Marriott's program, seeing as how he speaks of the Green Party with such contempt.

What Marriott doesn't see is that it is mostly the market itself that has caused such problems with housing. Everything from big oil to cheap housing has led to the ridiculous situation we are in today. If you have a finger to point at civic regulations, I have fingers to point back at the opportunistic homeowners who have almost single-handedly inflated the price of housing with their get-rich-quick schemes. There are also problems with the global supply of labour and materials to take into account, and those are beyond the grasp of the city or province.

Aside from the aforementioned problems associated with sprawl and infrastructure, the constant whining of the business community against taxes, now found in the election campaigns of the likes of Alnoor, means that the city's finances is further stretched. Even with the $3.3 Billion we are going to receive from the province over the next decade, Calgary is going to be hard-pressed to keep up with the demands of it's citizens and businesses.

And then there is the overarching problem of the environment. Even as recent as the last week, a new study from the "National Center for Smart Growth Research and Education at the University of Maryland" linked the suburbs to climate change. It is increasingly clear that our sprawl is taking its toll on the planet. It's a wonder that we can even sustain ourselves, given how we are encroaching on some of our most valuable agricultural land, are using up oil and gas like it is going out of style (and it will, leaving us in an crisis where transportation is no longer cheap). What good are all these cheap homes if we no longer have the resources to sustain such a lifestyle?

[Champion3]

I would be hesitant to attack economics for this editorial - as we know, sprawl is costly, causing the economics to actually be in favour of density. That said, containing sprawl doesn't mean restricting supply, and that is where the author errs.

[Boris2k7]

I should clarify. When I speak of "economists" in this light, I am referring to the almost stereotypically market believer, who doesn't see much beyond a company's profit margins and is usually a conservative by ideology. Many economists operate under the assumptions, for instance, that freeways are good for the economy because of the ability to move goods and get people into shopping areas, while ignoring all the rest of the effects, such as the shift of consumer spending from small, local businesses to power centres. On the other hand, the inability of the city to keep up with infrastructure likely hurts the economy as a whole.

[freeweed]

I love how these sorts of discussions are so insanely polarized. You're either some obese, multiple-SUV-owning, only-ever-Big-Box-shopping neocon, or some jobless anti-growth hippie who never showers in an attempt to conserve Mother Earth's precious water supply. Nope, can't possibly ever be any middle ground here.

Time to pop some popcorn. This thread should be a treat after a couple of weeks' flamewar.

[Bassic Lab]

The author of the editorial is either incompetent or knowingly trying to mislead people. I'm not aware of Mr. Marriott's credentials but if he was an academic (something I'd doubt as most editorials written by academics with mention the position held by the author, or atleast refer to them as Doctor) I'd be ashamed to have him representing my institution. While supply was a major factor in the run up of prices, regulations (except those related to standards, like safety) were not a signifigant factor inhibiting supply and those that were are not being argued against in this editorial. Simply put the governments in the Calgary area are not limiting sprawl in a manner that harms supply.

The real limitations on supply of housing stock are three fold. One is the limitations on the supply of labour, they simply don't have the man power to biuld housing much faster they currently are, this is ignored in the article. The second would be the governments failure to adequately regulate the development bussiness to eliminate some of the monopolistic practices that are driving up the cost of empty lots. Developable land is held in too few hands by those that are willing to artificially reduce supply to drive up prices. This is not as major of an issue but it could be dealt with, the cozy relationship between land developers and the different levels of government is really to blame here. Thirdly are a number of government regulations that actually encourage sprawl as opposed to limiting it. These are primarily zoning issues that could be relaxed, secondary suites and that sort of thing. Except these various zoning regulations that limit supply existed prior to the price run up so they can not be blamed for it.

We aren't Portland, we don't have a greenbelt limiting the supply of developable land within the metro. Mr. Marriott is writing as if we did, which is wrong on a number of levels. Any thing that the city is doing to curb development is obviously a nonfactor as all development has not moved out of the municipality to other areas without such controls. If he was right no one would be biulding houses in Calgary and instead all new suburban construction would be occuring in other jurisdictions, like Airdre and Chestermere. This is not the case.

Mr. Marriott should go back to whatever two bit, (sprawl oriented) bussiness funded, academic ethics challenged, think tank he crawled out of.

[entheosfog]

Originally Posted by Boris2k7

I can't believe that people are still crying over curbside recycling. Currently, you either have to pay for a private service or own a car to drive your stuff to a set of bins (unless you are so fortunate to leave near such bins). How are we supposed to convince people to take up a higher density, transit-oriented lifestyle if they still need their cars for something so mundane as taking in the cardboard? The proposed program won't even handle organic waste. Then again, I doubt that such goals mix with Marriott's program, seeing as how he speaks of the Green Party with such contempt.

I totally agree, too. Not many people are motivated to recycle in Calgary if they don't own a car. But I still can't believe the new program won't extend to apartment or condo buildings. And the program won't be implemented until 2009, I think...

[Sean.Perrin]

Wtf was that? What an idiot.

[SFUVancouver]

The shortage of labour and scarce government staff resources are compelling reasons to foster higher residential densities.

A work crew can spend a spring and summer building a single house for a single family, whereas a marginally larger crew can spend an extra season and build a dozen townhouses that will house a dozen families.

The limited government and private sector staff resources that go into a approving, overseeing, and servicing a single home benefiting a single family could better be spent approving, overseeing, and servicing a denser project that will house dozens of families.

I can't help but bring up Metro Vancouver as an example of another rapidly growing area with a strong economy that has embraced a greater variety of housing forms. True, we are geographically constrained by water, mountains, and the US border but we also artificially constrained ourselves in some areas by protecting agricultural land from development. Since the late 1980s the majority of new dwellings have been in multifamily developments of one sort or another. This includes everything from duplexes up to sixty-floor luxury condominium towers. The sky didn't fall.

[ScottFromCalgary]

Originally Posted by Bassic Lab

The author of the editorial is either incompetent or knowingly trying to mislead people. I'm not aware of Mr. Marriott's credentials but if he was an academic (something I'd doubt as most editorials written by academics with mention the position held by the author, or atleast refer to them as Doctor) I'd be ashamed to have him representing my institution. While supply was a major factor in the run up of prices, regulations (except those related to standards, like safety) were not a signifigant factor inhibiting supply and those that were are not being argued against in this editorial. Simply put the governments in the Calgary area are not limiting sprawl in a manner that harms supply.

The real limitations on supply of housing stock are three fold. One is the limitations on the supply of labour, they simply don't have the man power to biuld housing much faster they currently are, this is ignored in the article. The second would be the governments failure to adequately regulate the development bussiness to eliminate some of the monopolistic practices that are driving up the cost of empty lots. Developable land is held in too few hands by those that are willing to artificially reduce supply to drive up prices. This is not as major of an issue but it could be dealt with, the cozy relationship between land developers and the different levels of government is really to blame here. Thirdly are a number of government regulations that actually encourage sprawl as opposed to limiting it. These are primarily zoning issues that could be relaxed, secondary suites and that sort of thing. Except these various zoning regulations that limit supply existed prior to the price run up so they can not be blamed for it.

We aren't Portland, we don't have a greenbelt limiting the supply of developable land within the metro. Mr. Marriott is writing as if we did, which is wrong on a number of levels. Any thing that the city is doing to curb development is obviously a nonfactor as all development has not moved out of the municipality to other areas without such controls. If he was right no one would be biulding houses in Calgary and instead all new suburban construction would be occuring in other jurisdictions, like Airdre and Chestermere. This is not the case.

Mr. Marriott should go back to whatever two bit, (sprawl oriented) bussiness funded, academic ethics challenged, think tank he crawled out of.

Good response, I'm going to agree with you here. While I may be close to the "market believer, who doesn't see much beyond a company's profit margins and is usually a conservative by ideology" that Boris speaks of, this article is not about pro-market, laissez faire economics, its mostly about pro-sprawl. I would be more supportive of the author's viewpoint if he agreed to force all suburban developments to effectively capture all the costs of their lifestyle choice. In other words, moving much closer to a user pay system. Toll roads, property taxes based on costs to service the lot, etc. are all ideas I support.

[jeffwhit]

^^I wonder how he'd feel about the government if they were truly laissez-faire and removed the de facto subsidies on sprawl development and made people pay for what they used in taxes.

[freeweed]

Originally Posted by jeffwhit

^^I wonder how he'd feel about the government if they were truly laissez-faire and removed the de facto subsidies on sprawl development and made people pay for what they used in taxes.

I'd give my eye teeth to live in a society like this.