Stronger Kamloops - The Primer

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Stronger Kamloops; Nuts and Bolts, The Primer to A Small Vision: Kamloops, the Small Town that happens to be quite large; how we can keep it small and keep it prosperous By Mitchell Forgie

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This is what to read to quickly understand the Strong Kamloops story

Transcript of Stronger Kamloops - The Primer

Page 1: Stronger Kamloops - The Primer

Stronger Kamloops; Nuts and Bolts,

The Primer to A Small Vision:

Kamloops, the Small Town that happens to be

quite large; how we can keep it small and

keep it prosperous

By Mitchell Forgie

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What is this book about?

Our taxes keep rising? Why?

It is not because public servants get paid too much. It is because our well

intentioned policy mountain created over the last 60 years has incentivised a

development pattern that destroys value, bankrupts private individuals, lowers

property values, restricts job growth, suffocates air quality, cripples our

environment and creates disastrous health effects that lead to mountains of

health care bills.

We did this collectively, and we voted for governments that put these policies in

place. Nearly every single policy on its own was well reasoned and well

intentioned; often in the name of safety or economic growth. However, the

cumulative effect has been to create a new problem, which is economically much

worse than the problems we were seeking to correct. This economic deficit is

bankrupting us and our governments; and this bankruptcy is structural to the

system we have created: Manipulating public wages will not change this and

neither will manipulating service levels. If we are bankrupt we have no hope of

addressing the other pressing social and environmental concerns that we have to

consider in the 21st century.

This book is a primer to the concepts involved in the Stronger Kamloops

Philosophy. The larger book expands on many of the concepts, and is far more

solution oriented. This book is simply a black and white explanation of the

structural deficiencies that exist. These problems are not unique to Kamloops or

even the cities in our country. Cities all over the world face these similar

problems. The more horizontally developed each particular city is, the worse they

face these challenges.

I suspect Kamloops will surmount these challenges, and become a strong city,

perhaps even a leader in our country of what small cities could try to attain. I am

an optimist, but I see the flaws in our system as real and difficult challenges that

need level headedness to confront. I hope that this book can be a springboard

for the discussion and political will required to confront the future.

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What is the Problem?

I want to introduce you to Arnica

Street in Pineview;

Arnica Street is a Cul-De-Sac,

containing 24 properties of which 23

have been developed. Lots cost

$100,000+ and the average assessed

value is $404,167. All the houses

together are worth $9,700,000.

Pineview as a whole is looked at by

our city planning department as a

model of how we should develop. Nice

houses, small community feel, etc.

The street in front of these properties

is 282m long, and using the cheapest

re-surfacing method available (Hot-

In-Place) it will cost the city $45,684

to resurface this road. Provincial

standards suggest that this should

happen every 9-11 years.

Single family houses in Kamloops

currently pay a tax rate (2012) to the

City of 4.37% of each thousand of

property value as determined by BC

Assessment. This brings in a

combined income of $42,389 to the

city each year. The City does provide

Home Owner Grants to persons who

live in their homes, which would

reduce this number but without that

information we will use the higher

number. 6.89% of the city’s budget is

devoted to Infrastructure and it’s

maintenance. So if we devout 6.89%

of Arnica Streets revenue to road

maintenance, we find that only $2,920

of each year’s tax accumulates to take

care of paving the road when it needs

to be done. After a 10 year lifespan, at

current paving H-I-P paving rates, it

will cost $45,684 to resurface, leaving

the city with a $16,484 loss; and this

is on what we assume to be a fairly

high value street that is only 282m

long. Further, this road is a Cul-De-

Sac, only the folks on Arnica Street

benefit from Arnica Street.

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On Gordonhorn Crescent in Sahali the

same situation exists. The 12

properties on the Cul-De-Sac have a

combined value of $4,497,000 on a

115m long road.

The road repavement on Gordonhorn

would be $18,630, and the loss would

be $5,090 at 10 years, for only 115m

of road. A drive through many areas of

Sahali will indicate to you however that

most of these roads missed their 10

year maintenance investment a long

time ago and that intensive

maintenance is sorely needed at a far

elevated price. Arnica Street has a

deficit of $58,452.26/KM; Gordonhorn

$44,257.55/KM; Kyle Drive in

Westsyde $66,300.00/KM. The cities

1520 km of maintained road loses on

maintenance alone $8.6 million/yr.

Why aren’t we Bankrupt?

Have you ever heard of a Ponzi

scheme? In a Ponzi scheme a

company pays profits to investors

from the investment capital of new

investments. What has happened in

our city is much the same. As new

taxes come in from new development,

that revenue covers the shortfall from

past maintenance commitments. The

problem with a Ponzi Scheme is that it

requires ever accelerating rates and

frequency of investments of new

money to pay for the liabilities of the

old. Graphically the cash flow of the

city looks like this;

Further, when the city approves a new

sub-division, they experience an

instant intake of new funds through

taxes, and do not have to worry about

the maintenance commitment for

years to come. For this reason there is

a significant time lapse between

paying for the maintenance and

receiving the initial influx of capital.

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Solutions

Currently the solution to this problem

as discussed in the news is this; “How

high will the taxes have to rise, and

how deep will the service cuts be?”

In the news this month we have seen

the cutting out of door-to-door postal

service, cuts to the ambulance

service, complaints about fire-fighters

wages and more. In Kamloops we

have seen tax hikes above inflation

absolutely every year since 2003

except for 2006 (in which there was

still a rise in taxes).

I propose an alternative solution. Not

every place in our city, and not every

development pattern, performs so

dismally. What performs dismally is

low-density, dis-connected, car-

oriented suburbs. Gordonhorn has a

value per Sq. M. of $435; Arnica $637;

Kyle Drive $286.

For comparison our cities most

valuable street, Victoria has blocks

that top $5000 per Sq. M. which is

684% better performing that Arnica

Street, while the infrastructure

maintenance cost to the city remains

roughly the same; because

infrastructure costs more as a function

of distance than a function of size:

Doubling the capacity of a pipe is

cheaper than doubling the length of a

pipe. Even in residential areas

downtown, for example the 200 block

of Nicola is worth well in excess of

$1200/Sq. M. And Pine Street is worth

$671.13/Sq. M. with comparable home

prices to $286/Sq. M. Kyle Drive.

Suburban commercial developments

compare just as dismally to downtown

with Sahali Center Mall (Target) worth

just $191/Sq. M. and our newest

development CityView worth $499/Sq.

M.

The further telling story here is not

only that traditional neighbourhoods in

the city perform better economically

for the tax roll, but that people actually

prefer them. Downtown condos are

the single most expensive real estate

per square foot in the city. Rent

downtown easily doubles rent per

square foot in stripmalls. Even shabby

parts of Tranquille Road ‘outstrip’ strip

style commercial developments with

values between $900 and $1300/Sq.

M.

So if people prefer downtown, are

willing to pay so much more for it and

it performs far better for the city’s

budget; why isn’t anyone building

more of it? And what makes downtown

so valuable anyways?

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The Value of Walking

I challenge you to take a trip,

anywhere, and not be a pedestrian on

foot at any point. If you go to the mall

to shop, you probably arrive by motor-

vehicle and then walk through the

mall. If you go to see the Blazers, you

walk in to the arena. Comically, we

even drive to the gym to walk or run

on a stationary device, and pay money

to do so. We walk through the BC

Wildlife Park. We also walk down

Victoria Street, and this is why Victoria

Street is so valuable. This is why a

shop on Victoria Street can pay

$18/sq.ft. in rent and make a killing

while the same shop goes bankrupt at

$4/sq.ft in a strip development. This is

also one of the primary reasons

stripmalls are composed of nearly all

national franchise and large corporate

tenants; they have to rely on large

scale national marketing to generate

interest and education in their

products as no one would ever

accidently ‘stumble’ upon them.

Downtown businesses spend time and

money in window displays while

suburban businesses rarely even have

windows to the parking lot. There are

feedback loops in these design

issues. Interesting store windows

beget walkers and window shoppers,

which begets more potential business.

What makes a place walkable, or

successful? Many authours, planners

and critics have complied entire

anthologies on this subject, with some

of the best and most immediately

readable below;

Walkable City by Jeff Speck

Death and Life of Great American Cities

by Jane Jacobs

The Geography of Nowhere by James

Howard Kunstler

Building Strong Towns by Charles Marohn

The Original Green by Steve Mouzon

My summary of the concepts include

these variables;

Defined and Enclosed Spaces

o Streets are not missing teeth

Landmarks and Terminated Vistas

o Destinations visible

Protection from fast moving cars

o Slow Traffic Speeds

Well connected

o Many routes to take

A threshold of density

o Enough people in walking distance

Incremental Investment Potential

o Buildings, lots, dwelling units of all

sizes, shapes, ages and costs

You will find quite significant

explanations on these points in the full

book Stronger Kamloops starting on

Page 59.

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So Why isn’t Anyone Making More Downtown Style Development?

This is a complicated question, but

one thing is for certain; the cities

Official Community Plan, the

document that guides all city growth

has supported many of the qualities of

downtown development for nearly

twenty years.

City Sketch from the North Shore Plan

The OCP asks for dense, mixed-use

development, with native plant

species, bike racks, design that makes

large buildings look smaller, bike

routes, a focus on transit, integration

of social housing, active

transportation for health and many

more well intentioned and well-

reasoned policies; yet not even a

tenth of what gets planned occurs in

real life, or with any expediency, and

often it does not create the desired

effect anyways. The reasons for this

are two-fold; carrots and sticks.

The Sticks

What is standing in the way of

development is actually directly

created and enforced by our cities

planning department. It is a

combination of planning, engineering,

fire and building standards that make

most every building in downtown

Kamloops illegal or cost-prohibitive to

build today. From engineered sprinkler

systems, parking requirements, mop

sink dimensions, bathroom

requirements, firewalls, acoustic

separation, separate code built fire

escape stairwells, maximum lot

coverage ratios, setback minimums,

use restrictions, rezoning boards,

public hearings, development

permitting, on and on and on, the

cities actual bylaws and standards do

not reflect what is encouraged by

official community plans. For example,

I attended a City organized forum on

creating affordable housing, and they

included that there is a policy direction

to have a tax subsidy for market units

created that are below 400 sq. ft. Yet

the building code, lot coverage issues

and more actually prevent that type of

housing from actually being built,

assuming there was a market for it.

The City has created a document for

the hoops to jump through if you

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would like to add a legal basement

suite or laneway house to your

property. They city wants to see these

happen to meet the perceived demand

for affordable rental accommodation,

to mix incomes and ages of residents

through the whole city and to see

development on old infrastructure that

they are already maintaining. Yet it is

not uncommon for a would-be

landlord to spend hundreds of hours

and thousands of dollars (usually

around $10,000) to have City Council

hear their case and possibly have it

denied.

Try to open an unconventional or

small scale business in town you will

find the same as I did. I saved up

about $25,000 to start a 450 sq. ft.

coffee shop. I figured that figure was

enough to buy the espresso machine,

the inventory, tables, chairs and

operating capital. But as I was dividing

an existing unit the sprinkler system

had to be re-engineered and one

head moved for a cost of $5000; the

dividing wall had to be fire rated. I had

to have 6 sinks; 3 dishwashing sinks,

a mop sink, hand washing sink and

bathroom sink; plus a handicap

accessible bathroom at about 100

sq.ft. At that price of meeting city

standards there was no profit left for

me to be made, and no coffee shop

was ever opened.

A further barrier to dense, mixed-use

walkable development is maximum lot

coverage ratios. They prevent a huge

amount of value from accruing in the

city. In all but a couple zoning codes,

which only occur on a few blocks in a

few areas of the city, not only is use

restricted to very narrow types, but the

amount of that use as coverage of the

land is required to be below 40% of

the land. This creates a situation of

sprawling single family lots, many

people with large yards that they do

not want, or are unable to maintain,

and so they grow over with blight.

Or alternatively it creates pods of high

density apartments which are

surrounded by large lawns and parking

aprons. This type of apartment

dwelling may be dense on the site, but

in the context of the block, both height

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limits and lot coverage prevent the

buildings from actually being close

enough together, or near different

uses to generate any value or

walkability.

In situations, like a basement suite or

laneway house downtown, to meet the

zoning code you have to maintain this

maximum lot coverage, but you also

have to accommodate 3 on-site

parking stalls. Where walkability

already flourishes, and the framework

and demographic exists to walk, still

more regulations anticipating unlikely

events add cost and restrictions to

what you can build, especially things

that add value to the land and to the

city.

The Carrots

The parking subsidy, covered

extensively in the large book, reads

like this. The city requires each new

development to have a large amount

of parking, sized generally for the

busiest times of the busiest days of

the year. Since suburban

developments are limited to single

uses, there is no crossover in parking

facilities, nor any capacity for spill

over into other streets, and so on the

face of it, parking minimums make

sense for citizen convenience. The

problem is that parking costs money

to build. In the case of a stripmall

parking stall, the cost is around $4000

per stall. The carrying cost of that stall

is bundled into the rents of the

tenants, and then added on to the

price of your goods. For a reasonable

rate of return, a stripmall developer

would have to generate $42 per

month, per parking stall in added rent

from its tenants. A small restaurant of

30 seats is required to have 38 parking

stalls. That means that parking costs

the landlord $1575 per month, and

that is going to be bundled in to my

rent.

Restaurants are a great place that

Donald Shoup, a California based

economist, used to make a fantastic

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analogy about the politics of minimum

parking requirements;

“If cities required restaurants to offer a

free dessert with each dinner, the

price of every dinner would soon

increase to include the cost of the

dessert. To ensure that restaurants

didn’t skimp on the size of the

required desserts, cities would set

precise ‘minimum calorie

requirements.’ Some diners would pay

for desserts they wouldn’t have

ordered had they paid for them

separately. The consequences would

undoubtedly include an epidemic of

obesity, diabetes, and heart disease.

A few food-conscious cities like New

York and San Francisco might prohibit

free desserts, but most cities would

continue to require them. Many people

would get angry at even the thought of

paying for the desserts that they had

eaten for free for so long”.

Howard Frumkin has also related

conclusively the effects of auto-

oriented living with many of the same

effects of free desserts including

obesity. The required parking in a

suburban setting is in fact a double

edged sword, as the required parking

drives uses further apart, making

driving even further required.

A possible remedy for this is to

include parking stalls in structures

rather than surface stalls. However in

this case we run in to far greater price

prohibition. Structured parking stalls

cost between $20-$40,000 to build

and Underground stalls between $40-

60,000. Therefore real estate values

and parking demand have to be truly

extraordinary to ever justify their

construction. This is one of the

reasons that new mixed-use

construction has not happened

downtown despite the City of

Kamloops offering all kinds of tax

incentives and policies to support it.

City Parking Requirements directly

prevent the type of development that

their plans support from being built,

and also directly prevent land owners

from adding value to their property. It

is said that it is in the culture of

Canadians to drive, and that they will

not walk, yet given the subsidy present

to drive, and the design of our cities,

sprawling, disconnected and with free

parking at each end, driving is the only

economically rational thing to do. We

just pay the cost in our taxes and our

goods rather than as a user fee of

driving on the roads. Developers know

that people will not pay the price of

the parking directly and this is why

they fight City Hall on every project

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about parking spaces. On a personal

note, if my downtown condo did not

include a free underground parking

stall, and instead it was added on to

the price of my condo at its cost to

build, approx. $50,000; I would likely

save myself the $50,000 and eight

years off my mortgage.

The land value subsidy is a more

ambiguous one, but also the one that

has the greatest effect on the types of

places that get built. When the BC

Assessment Authority determines the

price of your property, they measure

two metrics; land value and

improvement value. The combined of

these two figures is the amount on

which your property tax is levied.

These two figures carry the same

weight, and the formulas to arrive at

the value for each of these figures is

unclear, but includes construction

costs, sales figures, historical data

and depreciation projections. One

thing is for sure, the further from the

centre and the larger the lot, the less

the Assessment Authority pegs a unit

of land to be worth. A sq. ft. of

infrastructure on the periphery costs

the city the same amount to maintain,

or arguably it actually costs more.

Sales prices, what folks are willing to

pay, on the periphery may be less than

nearer to the center, but from the

cities point of view, the burden of the

service operated by the City should be

consistent in the value of the land

across the city. Consider then the

following Assessment Figures ($/Sq.

M.);

Commercial;

Downtown; 301 Victoria; $683

Downtown; 371 Victoria; $679

Dufferin; 1395 Hillside; $172

Aberdeen; CityView; $153

Valleyview; 2121 Trans Canada; $172

Residential;

Downtown; 724 Battle; $339

Downtown; 135 Battle; $393

Valleyview; 2276 Crescent; $211

Aberdeen; 759 Laurier; $238

Westsyde; 670 Lyne; $140

In Commercial property, it is 341%

more expensive to buy and carry land

downtown than it is in the burbs.

Residential property is roughly double

in most cases downtown compared to

the burbs. If the implication of this is

not clear it should be. Developing on

the periphery is so much cheaper that

no amount of tax subsidy could ever

approach the incentive to develop on

the periphery, especially for a large

scale out of town developer.

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The moral of the Story

We have ascertained that downtown

mixed-use, walkable development

styles are far better performing for tax

revenue, for sociability, for

entrepreneurship, for health and is

supported by the City in spirit. We also

now are beginning to understand all

the different factors that make that

ideal completely unrealistic for even

the most ideological and motivated

developers to achieve.

If we want to see more downtown

style development we need to see a

couple things happen;

1. Downtown style development

needs to be allowed outside

downtown.

To achieve this, lot coverage must be

allowed to be at or near to 95%. Of

course no developer would have a

market for complete lot coverage, but

it should be in the developers’ realm

to determine this. The same goes for

parking minimums. The developer gets

to decide how much parking they want

to invest in, not the City.

2. Development requirements in

Downtown need to be more

reasonable

Does a 400 Sq. Ft. café really need to

have a handicapped bathroom, or can

they share with the business down the

hall? Would it be reasonable to

assume that everyone in a small 3

story, 8 unit apartment building should

be able to exit before the fire

department arrives, and thus should

not be subject to the same escape

requirements as an 11 story building?

Or that someone wanting to add

density to their little lot with a Laneway

House be approved by the process

already in place, rather than a

politicized council decision? Or that lot

coverage maximums downtown be

more reflective of the urban setting?

The book, Stronger Kamloops, dives in

to all these issues with far more

precision, support and provides clear

recommendations on the path forward.

While planners search for solutions to

problems that keep shifting, I propose

instead that those of us in the

population be simply allowed to

achieve the cities goals for them by

getting the regulation out of the way

for rational responses to evolve at the

level of the person, the property, the

business, the block, the

neighbourhood. Please check out the

blog at strongerkamloops.blogspot.ca