Intensive growth incentive

A little New Urbanist economics, from former Winnipeg mayor Glen Murray in a recent interview on Smart City Radio — worth listening to all of.

Coletta  In this economic downturn, several U.S. cities have already asked the federal government for their own bailouts. What’s your opinion on that?

Murray  Uh I sort of share the perspective of my friend John Norquist, the former mayor of Milwaukee, who, uh, makes the point that — what cities don’t need is greater dependence on federal revenues in Canada and the United States. What cities do need is to really vacate tax room, and allow municipalities to have a more diverse range of revenue sources. Especially ones that aren’t as economically destructive as property taxes, which — property taxes is, is the sole source of revenue for most cities, the real huge disincentive to quality development. Every time you improve your building, even if it’s to green your building, make it more energy efficient, you’re getting hit with, with a penalizing tax. So property taxes are, are quite a brown form of taxation, ‘specially cause they, they really don’t tax land, they really are essentially a tax on buildings and the built environment. They don’t grow with the economy — cities are very smart about intensification, transit, walkable neighborhoods; property taxes don’t reward cities for smart investments, they don’t grow with the economy. So — we don’t have a good mechanism, what we do is we, we leave the burden of responsibility for fixing cities on the rate-payers and on the municipal treasury, and when they do get it right, they don’t get the revenue back that they need to sustain that level of investment, whether it’s in transit or, uh, transportation, uh, infrastructure or policing. In Canada, the system is so perverse that — you know, I, I own a business in downtown Toronto; we pay three hundred percent more property taxes based on the assessment system, and we’re near a rapid transit line, than we would if we were a business out in a commercial or industrial park, far away from transit, and greenfield development that was energy intensive and forced all of our employees to take cars and use a lot of infrastructure, rather than fairly low environmental uh footprint that we have being in a heritage building in a very dense part of town. So, the multiplier factors for taxing the kind of development that most official plans and most sustainability strategies say we want more of, we tax several times the rate in Canada, and we heavily subsidize low density, high energy-use, poor quality developments in greenfields. And, until we get that right, the tax guy or the city assessor are gonna drive the urban agenda, not the people who are doing sustainable regional planning.