Section 37 and transit

While browsing Google News, I came across two articles on the topic of Section 37 and transit. In addition to application fees that the city collects on each rezoning, approximately $100 million is collected annually in the form of development charges (my estimate based on annual housing starts times $13,611 per unit) plus any extractions in the form of Section 37 agreements.

In a perfect world, all or most of the impacts to infrastructure caused by development would be covered by development charges while Section 37 monies would pay for community benefits and other enhancements to infrastructure. I strongly believe that overcrowding on transit should be part of the infrastructure calculation when determining development fees. Maybe it's that way already? Doubtful.

When looking at the two fee schedules above and reading the (legitimate?) concerns from the budget chief about the lack of city staff oversight in the negotiation process, I wonder if having a fee schedule would be beneficial to all the parties involved. If done right, this could be another funding source to pay for transit enhancements per Jennifer Keesmaat.


http://www.torontosun.com/2012/10/08/wild-west-development-fees

“Sec. 37 is the wild west and the frontier of some councillors,” said Del Grande. “There are hundreds of millions collected and some councillors have access to $50-million for their ward. It’s a loophole that has created a very lopsided system where there are haves and have nots.”

Auditor Jeff Griffiths has expressed concerns over this before and change has not come.

Del Grande said it “has become a personal fiefdom with no consistency” that must be stopped.

In exchange for getting around zoning rules, developers pay a negotiated fee and are granted extra floors on their development projects. That fee is then used for “community improvements.”

But one councillor’s sports field could be another’s public art installation.

There is no continuity.

“Councillors should not be able to wheel and deal in isolation without staff and without controls,” said Del Grande. “It’s very dangerous for some (on council) who are not responsible.

“It’s about equity and fairness,” added Del Grande. “This money should improve all of Toronto.”

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http://www.cbc.ca/news/canada/toronto/story/2012/10/02/toronto-planning-vision.html

Toronto's chief planner says developers behind mega-projects could be called upon to contribute funding to help expand the city's transit infrastructure.

Jennifer Keesmaat said that under section 37 of the planning act, developers can make a deal for more height or higher density in exchange for making contributions to the community...

"That would be one way, to take section 37 monies and put them in a fund specifically for transit," she said.

"We need to do some work in that area to make sure we are getting the kinds of public benefits that we ought to be getting."

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(Disclaimer: I don't live in Toronto, but it's much more exciting from an urban planning point-of-view than my boring city down south.)

Is there a source detailing actual amounts raised by Section 37? Del Grande says "hundreds of millions", but over what time period? I know you quote an estimate of $100M/year, but I would like something to verify that and how consistent it is historically. If Section 37 money were dedicated to transit, would there be a guarantee that it wouldn't just be offset by a similar reduction in the capital or operating budgets? It is a problem with schemes to partially fund transit from many different sources of revenue that there is no guarantee that the non-dedicated portion won't be reduced accordingly. It needs to be an all or nothing approach to be guaranteed to work.

Another question is should we really be encouraging by-passing zoning and official plan laws just to raise funds?

Another excellent article from the SUN exposing the shake-down of developers by city Councillors. This is why we need to keep the OMB!

http://www.torontosun.com/2012/10/08/city-plays-lets-make-a-deal

"Fuelled by the city’s condo boom, that fund has grown .....into a $300 million political slush fund"

"But city councillors often negotiate deals with developers and decide where the money should be spent — despite the fact few are qualified to handle such negotiations"

"Mihevc, without any obvious participation from city staff present, contacted him and demanded $30,000 in “fees†in exchange for a quick, speedy approval."

Peepers said:

Another excellent article from the SUN exposing the shake-down of developers by city Councillors. This is why we need to keep the OMB!

http://www.torontosun.com/2012/10/08/city-plays-lets-make-a-deal

"Fuelled by the city’s condo boom, that fund has grown .....into a $300 million political slush fund"

"But city councillors often negotiate deals with developers and decide where the money should be spent — despite the fact few are qualified to handle such negotiations"

"Mihevc, without any obvious participation from city staff present, contacted him and demanded $30,000 in “fees†in exchange for a quick, speedy approval."

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I understand the interest in reforming Section 37 to make it more transparent, but what exactly is the legitimate objection to this money being spent primarily in the areas that receive the development? Parks, sidewalks, and roads in Mike Del Grande's ward aren't impacted by development on King West. Mandating that even the meagre infrastructure improvements the City is extracting from the condo boom be distributed "equally" seems to me like a cash grab by councillors whose wards aren't on developers' radar. The downtown, broadly defined, and a few other areas are seeing huge population growth, and Section 37 is one of the only ways in which it's getting accomodated.

One thing I'd like to see is more pooling of Section 37 funds for big projects, as opposed to one-offs. If all the developments on Bay Street over the years, for example, had paid into a project for a top-to-bottom makeover of the street it would look a lot nicer, methinks.

The 100 million per year is not section 37 monies but development fees. For an accurate figure you can look here ......
http://csconramp.mah.gov.on.ca/fir/View/FI111999 Copy.pdf

For some perspective, growth related expenses for Toronto Water (water, waste-water, storm-water) alone will cost the city approx. $100 million in 2012. Compare that to total development fees of 94.5 million. That leaves nothing for fire, police, roads, transit, ems, libraries, parks, homes for the aged, etc.

Though Glen, aren't Toronto Water capital expenses covered through rates? IE, development charges wouldn't be applied to those anyway?

There is information on Section 37 "community benefits" in an Auditors Report in 2012. It states: "City Planning staff analysis has shown that of $120.8 million secured as cash benefits in 248 Sections 37 and 45 approvals from 1998 through 2007" See:
http://www.toronto.ca/legdocs/mmis/2012/pg/bgrd/backgroundfile-45771.pdf (Section 45 benefits are similar to Section 37 but are obtained at a Committee of Adjustment.

allabootmatt said:

Though Glen, aren't Toronto Water capital expenses covered through rates? IE, development charges wouldn't be applied to those anyway?

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According to the documents, this is an increase that is directly related to growth. Not regular improvements or state of good repair. Therefore it is an expense that should be covered by development fees. It is not. In so much as that this expense alone is nearly equal to the entire amount generated by development fees. Leaving nothing more for the other area's that will require growth related expenditures.

The current climate of development fees and taxes amounts to a huge transfer of wealth to the development sector. The cost of hard service expansion and operating expenses are heavily subsidized by the existing tax base. But at least we have the most cranes in the sky, s.i.c..

Now they should ask about the cash envelopes councillors receive for supporting those developments and 'negotiating' section 37 fees....

And the evidence for said envelopes is where? You've already made that assertion once in this thread: http://urbantoronto.ca/forum/showthread.php/19169-Restaurant-Row-Threatened/page2 and subsequently failed to provide a single shred of proof when put to task. And notice the article actually said that the TPS investigated and found no evidence to warrant further investigation (which is of course, conveniently ignored by the individual who quoted the article).

AoD

AlvinofDiaspar said:

(which is of course, conveniently ignored by the individual who quoted the article).

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What the hell? Sheesh! It would be a copyright violation if I posted the entire article, so I provided a link along with a relevant block of text. There was a whole lotta crapola at the beginning of the article about murder, legalized extortion and bribery, but I found the next few paragraphs interesting insight into the Section 37 negotiation process.

I just re-read the article, and I'm curious. Can you please tell me exactly what part I conveniently left out?

fedplanner:

I don't meant what you've said - which I think is quite valid (though there are some philosophical issues that requires thinking)! I was referring to the poster of the other Toronto Sun article. Sorry I should have been a bit clearer about that.

AoD

AoD, ahh that explains it. Sorry for jumping to conclusions.

Another question is should we really be encouraging by-passing zoning and official plan laws just to raise funds?

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...I wrote several paragraphs about how I am a fan of the official plan, since it is flexible enough to meet the needs of the community, and how I'm not a fan of the current zoning regime. It all got lost when I tried to post, so I'll leave it at that.

Ok, second attempt.

Toronto’s Official Plan is a well written document. It defines several land-uses and accurately assigns to areas all across the city. I don’t have the OP in front of me but if I recall correctly the land uses include: industrial, stable residential neighborhoods (single family), apartment neighborhoods, mixed-use neighborhoods, regeneration areas and employment districts. There is also an overlay land-use called the Avenues which calls for Main Street type designs on prominent city streets. The new developments proposed today are often times consistent with the OP’s designated land-use for the area. I believe that’s a testament to a good planning document: one that doesn’t have to be amended often.

The zoning bylaws on the other hand were written in a different area. The one I usually see quoted dates back to 1986. A lot has changed since then. There was an attempt in 2010 to introduce a new zoning code. It passed council but was later repealed after a barrage of complaints. They desperately need to be updated but it’s a very complex process for a large city. So Toronto is stuck with outdated zoning for now. I don’t believe it would be in the city’s best interest if it strictly adhered to the 1986 zoning code, especially the parts which are contradictory to the vision of the OP. I am in support of city’s planning staff evaluating each new proposed developments on its merits and not looking solely at existing code to make its decision. On this topic, I do wish the city would focus a little more on how buildings meet the street in the site plan review process rather than worrying about height and density.

I have no issues with height or density in the core, in the centres, or alone subway nodes where appropriate. I rather people live in those areas than having to convert fertile farmland or green space. What’s more important to me is the issue of how these buildings interact with the street and the pedestrian realm. It’s also important that these new developments pay for the impacts caused on existing infrastructure. The city should have an equitable tool to assess the impacts and collect appropriate fees from new development. This is the concept behind the development charges that the city collects. As much as I am pro-development, it pains me to say that the development charges are probably too low.

The water still runs when you turn on the tap and the toilet still flushes. So at least essential public utilities are theoretically being upgraded to handle all the new development. There are several complaints about TTC buses, streetcars and subways overflowing with people. I would like to see the TTC get a bigger part of the development revenue, only to be used for capital purchases. No operating costs or vehicle replacement expenses charged as capital. That should be a derived from fares and operating subsidies from government.

Jonny5 said:

Is there a source detailing actual amounts raised by Section 37? Del Grande says "hundreds of millions", but over what time period? I know you quote an estimate of $100M/year, but I would like something to verify that and how consistent it is historically. If Section 37 money were dedicated to transit, would there be a guarantee that it wouldn't just be offset by a similar reduction in the capital or operating budgets? It is a problem with schemes to partially fund transit from many different sources of revenue that there is no guarantee that the non-dedicated portion won't be reduced accordingly. It needs to be an all or nothing approach to be guaranteed to work.

Another question is should we really be encouraging by-passing zoning and official plan laws just to raise funds?

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Check out section37.ca - Two planners are essentially documenting the history of Section 37 for condominiums