Untitled Document

The countryside near Toronto, Ontario was under threat from development.

By Mitch Fasken
In Ontario, smart growth is the most misused term describing the issues associated with urban and suburban growth. Its definition here ranges from urban intensification to a suburban freeze on boundary expansions to increased open space for biodiversity in urban areas. Smart growth depends on your definition and view on urban growth.

In southern Ontario, we look to our neighbors to the south to see how jurisdictions in the United States have implemented smart growth using urban intensification and investment in capital infrastructure, transit and road systems. One of the key elements to the success of the smart growth agenda in the U.S. is the significant federal capital commitment to infrastructure.

Over the past eight years, the issue of smart growth in Ontario has become important to its residents. The need to rethink the future of growth patterns has been driven by a strong growth market in both the residential and non-residential sectors and consistent immigration levels of 120,000 to 150,000 people per year.
These record levels of urban housing growth — housing starts of 34,000 in 1995, rising to 84,000 in 2004, have caused transportation gridlock and record-setting increases in land and housing values — have galvanized the voting public to be vocal on the need to manage growth and environmental features simultaneously.
The review of the policy framework began approximately six years ago under the Provincial Conservative Government with Tony Clement, the Minister of Municipal Affairs and Housing. He began to focus the policy staff on issues of urban intensification, brownfield redevelopment and infrastructure renewal, examining U.S. cities for guidance on successful strategies.

Approximately two years later, Chris Hodgson, the next Minister of Municipal Affairs, announced a land use freeze in the area known as the Oak Ridges Moraine in response to growing pressure from environmental advocacy groups due to intense growth pressures.

Through the process of study for the Oak Ridges Moraine, environmental groups banded together and exercised a vocal need to establish a greenbelt area that would surround all of the greater Toronto area in an attempt to contain growth and reduce urban sprawl — their vision of smart growth.

Cities south of the border, such as Portland, Oregon, are often given as examples of smart growth and effective urban land use through intensification of development patterns and environmental feature preservation.

Smart Growth a Campaign Issue
In 2003, Ontario went to the ballot box to select its Provincial Government. The Liberal Party placed smart growth front and center on its election platform, with the implementation of a greenbelt limiting urban sprawl and a growth strategy plan to accommodate future growth being top issues.

This plan focused on the retention of approximately 1.2 million acres of land around the greater Toronto area for open space and natural preservation, the establishment of identified areas for future growth, new intensification policies, urban renewal and brownfield redevelopment and lastly, significant investment and expansion of transit and transit supported landuse patterns.

To facilitate implementation of the plan, the government enacted a freeze on the lands identified for the greenbelt and created an unintended consequence — a constrained market in a demand cycle.

The limitation on the supply of greenfields for development has resulted in land price increases of up to 100 percent in the past 18 months. Residential lot prices in areas such as Richmond Hill, a strong growth municipality in the northeast portion of the greater Toronto area, have leapt from $3,000 per front foot to over $6,000 per front foot since November 2003.

Lands suitable for residential development in areas such as Milton, located northwest of Toronto, have leapt from about $100,000 per acre to more than $200,000 per acre in an 18- month period for raw, undeveloped residential land. And with demand continuing to grow, only two options exist — urban intensification with brownfield redevelopment within the existing urban areas or leapfrogging the greenbelt to urban centers outside of the area.

The Challenge is Implementation
While it is easy to create a plan and produce maps and policies, the challenge is implementation. One of the most important considerations in implementing smart growth and urban intensification in Ontario is the need for infrastructure for transit, servicing and municipal infrastructure.

In this area there is a distinct difference between the Canadian economic policies and those of the U.S. In the U.S., government invests in infrastructure, which promotes growth, redevelopment and prosperity of its communities. In the Canadian forum, our dollars go to health care, education and social infrastructure with limited dollars going to physical infrastructure.

The result is an infrastructure deficit in the Province of Ontario with identified infrastructure needs in excess of $3 billion over the next ten years. While the commitment to implement smart growth has been tabled, the source of funds is yet unknown.

To address the infrastructure deficit, municipalities are charging capital levies known as Development Charges on new development. These charges, in certain areas, are running as high as $30,000 per residential unit and up to $10 per square foot of new industrial space. Both create impediments to housing affordability and economic competitiveness.

Where Brownfields Come In
This is one area where municipalities have opportunities to direct growth. Municipalities are identifying downtown redevelopment areas and/or specific portions of their cities which will be exempt from development charges, parkland dedication, building permit fees and other municipal costs.

These exemptions are meant to promote brownfield and infill redevelopment to enhance the utilization of existing infrastructure. The adaptive reuse of brownfields is one of the key components to implementation of the smart growth strategy.

As part of the Province’s initiative to foster brownfield redevelopment, a panel was formed in 2000 to provide the government with expert advice on the challenges faced by brownfields and the legislative change required to facilitate their redevelopment. Parallel to this process, the National Round-table on the Environment, a federal government panel, was also examining the requirements for advancing brownfield development across Canada.

The panel also addressed issues and developed recommendations for policy and legislative change to foster brownfield development.
As a result of these legislative panels, changes had begun to be implemented in the brownfield industry, with new regulations being advanced to limit the Provincial Ministry of the Environment’s ability to place orders, promote the use of risk assessments for environmental cleanups and create tools to give municipalities the ability to implement tax increment financing and other financial tools to assist in brownfield development.

Work is under way to assess further legislative change to the income tax act to allow for the expensing of remediation cost, the need to create closure on third party liability and insurance tools to promote financing of brownfields.

While smart growth policies are constraining the market and driving up land prices, the development of greenfield sites is still preferred by most developers and investors seeking to avoid the complexity and uncertainty of brownfield and infill redevelopment.

But in time this tide will change — brownfield development has moved into the mainstream and is quickly being embraced by more developers and investors. For a successful smart growth policy regime in Ontario, we need to develop direction and policy in partnership with government policy makers. Smart growth in Ontario will be a success and brownfields will play a key role in advancing the agenda.

For the brownfield industry in southern Ontario, the objective is to make brownfields more attractive than greenfields. Now, with smart growth policies the focus of government, we are closer to meeting our objective. There is a bright future for the brownfield industry in Ontario. BFN

Mitch Fasken is president of Kimshaw Holdings Limited in Mississauga, Ontario.

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