HAMILTON NEXT: Good ideas come from urban focus

Ryan McGreal writes in our regular series by Hamilton's community leaders about the future of the city.

By Ryan McGreal

Posted September 09, 2011 in Essays (Last Updated March 23, 2015)

Hamilton is a city, not a bedroom community - a real destination for commuters and an important engine of economic development. Seventy per cent of Hamiltonians work in Hamilton, not Toronto or Mississauga. Another 38,000 people commute into the city from a region spanning Niagara, Haldimand-Norfolk and Halton.

A recent study by the Centre for Community Study found that 23,400 people work in the downtown core, earning salaries well above the city and provincial averages. Downtown is already the city's single biggest employment cluster and still has plenty of room to grow.

While our decision makers pin their hopes on "shovel-ready" suburban greenfields, everything we have learned from the study of economic development points to downtown as the place we need to focus for a more prosperous future.

Steven Johnson, author of Where Good Ideas Come From, explains that innovation emerges from a dense network of connections that provides a context for invention. He describes how new ideas are cobbled together using available parts and concludes, "Chance favours the connected mind."

The environment Johnson is describing is an urban environment. Put simply, cities are the places where people cross paths and exchange ideas, and where "half-formed hunches" can combine into innovations that produce wealth.

When we live and work in urban, mixed-use environments, two important things happen: the per-person cost of public infrastructure goes down, while the rate of innovation speeds up.

It's a two-for-one productivity boost, and it's due to the distinctly urban economies of density, scale and association.

Density brings destinations together, reducing travel costs and making activities more affordable. Scale gives us bigger markets so the fixed cost of production goes down per unit of output. Density and scale bring people into frequent contact, and that association gives us the networks of "connected minds" that result in an innovation boom.

For these reasons, Hamilton must make urban revitalization its number one growth priority. The alternative of continued suburban development doesn't generate enough revenue to pay for the infrastructure that is needed to service it.

Each new subdivision actually increases the city's net liabilities. And as the urban boundary expands, more distant suburbs are even more expensive to service.

Council just voted to increase development charges by 2013, but the city will still charge only 60 per cent of what it is allowed to collect - even 100 per cent would not actually cover the full cost of development.

We have been running this pyramid scheme for decades, paying for yesterday's expansion with tomorrow's. As a result, our existing infrastructure idles while we spend money we don't have to build more infrastructure that can't pay for itself.

Our regulatory system reinforces this focus on sprawl at the expense of urban investment. The Zoning By-Law encourages low density, single-use development while actively obstructing adaptive reuse and intensification.

Even a modest infill project can face hundreds of thousands of dollars in fees for building permits, setback variances, cash-in-lieu-of-parkland (that can only be used to build new parks in the suburbs), mandatory parking requirements, zoning variances for any use not explicitly listed in the zoning for that building, and development charges - even though the infrastructure the building will use is already built.

The new Official Plan fixes some of these issues, but it will be mired in Ontario Municipal Board appeals for years. Meanwhile, the city continues to suffocate slowly under the current rules.

We can move faster with an investment-friendly secondary plan (particularly along our east-west B-Line corridor) that establishes a dense urban form primed for mixed use. City staff are already working with businesses downtown on an intensification study that will address the major barriers to reinvestment.

We must also commit to building the proposed east-west light rail transit line. The evidence is clear: LRT anchors new private investment and intensifies land use, increasing tax assessments and infrastructure productivity. It attracts residents and signals a city's long-term commitment to the area, which gives developers the confidence to invest.

City staff have prepared a detailed inventory of development opportunities along the LRT corridor and the potential is staggering. If Hamilton's LRT performs similarly to other cities, we could see a billion dollars in new investments and tens of millions a year in new tax assessments.

The province has said if it approves LRT, it will cover 100 per cent of the direct capital cost. The city will have to contribute some money - the amount is still being negotiated - but the cost of not building LRT is a steady erosion in our finances as the city's unfunded infrastructure liabilities get worse and worse.

An urban focus doesn't mean an end to our suburbs. Rather, it means we need an economic engine that generates enough wealth to pay for those suburbs. As Indianapolis Mayor Bill Hudnut famously said, "You can't be a suburb of nothing."

This essay was published in the Hamilton Spectator on Wednesday, July 20, 2011.