Without LRT, we are stuck with a stock of infrastructure we can't afford, a band of under-performing urban properties, and a cost/revenue model that puts us $200 million further into deficit each year.
By Ryan McGreal
Published May 19, 2016
This article has been updated.
This essay is adapted from a talk I gave to the Rotary Club of Hamilton Thursday Lunch meeting on May 19, 2016.
I suspect that when the organizers asked me to give this talk, they had no idea just how timely - and contentious - it would be.
Just a couple of weeks ago, I assumed I'd be giving an upbeat update on the city's preliminary LRT design plans and their public engagement strategy.
However, given recent events I think I need to spend a bit less time on the what of LRT and circle back to the why of LRT.
In May 2015, the Province announced full capital funding of $1 billion for the first phase of a light rail transit system in Hamilton. So what does that mean?
Starting with the basics, Hamilton's LRT system is broadly defined by six criteria: It is
The City recently released a preliminary design for the system with some renderings of how it will look. This design is still open to tweaks and changes, and the City will be undertaking a broad public consultation over the next several months.
Hamilton LRT map
In brief, an east-west line will run between McMaster and Queenston Traffic Circle, and a north-south line will run on James North between King and West Harbour GO Station or, if budget allows, right to the waterfront.
This north-south line is the first part of the A-Line, which the City has identified as the next rapid transit priority after the east-west B-Line is completed. Eventually, the A-Line will extend to the escarpment and along Upper James to the airport.
There are very good reasons why the City and Province decided to focus on the east-west route as phase 1:
Existing transit ridership along this route is already very strong, making up some 40 percent of total rides on Hamilton transit. There has been a B-Line express bus since 1986, and ridership along the corridor grew 20 percent in just five years from 2009 to 2014.
The east-west line connects a number of major destinations, trip generators and employment centres. The downtown core, for example, is the city's biggest employment centre with 25,000 jobs and growing.
The east-west line also has the most potential for economic uplift through new private investment in transit-oriented developments.
This is actually the biggest reason to go through the trouble of investing in LRT. Combined with supportive land-use policy, LRT is a huge driver of investment, encouraging high-quality infill development that increases the city's property tax revenue and reduces its per-capita infrastructure costs.
A study was recently done for the City of Halifax to quantify the cost of providing municipal infrastructure and service to suburban dwellings and urban dwellings.
Suburban vs Urban annual cost per household in Halifax
The difference is stark: more than twice the cost per household to service suburban land use compared to urban land use.
This is a crucial lesson for Hamilton, because we are currently growing in an unsustainable way. For decades we have been growing out rather than up, and the result is a cumulative infrastructure maintenance and lifecycle backlog that is over $3 billion - and growing by $200 million a year.
That's the cost side. Now consider the revenue side. A couple of years ago, the Hamilton-Burlington Society of Architects (HBSA) held a "Tactical Taxation" event in which they brought in Joe Minicozzi, an architect and planner who has done property tax by area analyses for a number of cities.
Comparing the property tax revenue per acre for a variety of developments in Hamilton, he showed the flipside of that Halifax analysis. Based on his research methods, Young Architects Hamilton (YAH) and the HBSA produced research on the tax revenue per acre for selected Hamilton projects.
Infographic: What is our tactical tax base?
Big-box retail like the Home Depot in Ancaster generates $21,500 in property tax per acre; whereas
Dense infill like the Core Lofts on Bay Street generates a whopping $493,000 in property tax per acre!
If we look at just a few other recent developments downtown, we can see just how dramatically the City's revenue per unit of area can climb when you increase the intensity of land use.
Take, for example, the new retail and commercial building on 123 James Street North (at Vine).
123 James Street North (RTH file photo)
When it was a vacant lot, it was valued at $371,000 and the city received just $9,000 a year in property tax revenue.
After it was redeveloped as a three-storey building, the assessed value increased to $3.8 million and the city now collects $93,000 in property tax - a tenfold increase.
Here are just a couple of more examples:
68 George Street went from paying $11,211 in municipal tax before it was developed into Staybridge Suites to paying $228,762 after.
40 Bay Street South went from paying just $18,000 a year in municipal tax before it was developed into Homewood Suites to paying $390,996 after.
Every new development that builds up rather than out increases the city's property tax revenue without increasing its infrastructure obligations.
Now think of all the properties in the half-kilometre or so corridor on either side of the east-west LRT line that are ripe for redevelopment. The following aerial shot is by photographer Anita Thomas.
Surface parking lots downtown (Image Credit: Anita Thomas)
There are whole city blocks in which the only building is the hut where you pay to park.
That's a huge opportunity to increase the city's density, property tax revenue and economic dynamism while actually improving our ability to manage our infrastructure lifecycle costs.
LRT allows us to meet the Provincially-mandated minimum infill target, which is currently 40% but set to increase to 60%.
It also allows us to do a much better job of attracting the young people, including young technical professionals and entrepreneurs, that Hamilton needs to generate the next wave of prosperity.
Business leaders in Hamilton say it's hard to attract young people to Hamilton today because they see it as a backwards city that is still governed on the assumption that most people will drive for most trips.
Meanwhile, it has already become a truism that young people today no longer equate owning a car with freedom the way people my age and older did. The culture has changed, and the steadily falling number of young people with drivers licences bears this out.
Instead of a form of freedom, driving increasingly looks to young people like an expensive burden they would rather avoid.
I want young people to be able to see and build a future in Hamilton - but the city needs to do a better job of understanding what young people want and need from a city. LRT is an essential ingredient in getting us there.
Another central benefit of higher density development is that it is actually proven to increase a city's rate of economic growth.
When you bring people and destinations closer together, you get more meetings, more ideas, more partnerships, more business start-ups, lower cost of doing business, easier access to bigger markets, and the cross-benefits of clustering and agglomeration.
By driving higher-order land use, LRT can help simultaneously lower Hamilton's cost of providing municipal service while increasing the city's rate of innovation and growth.
There's another thing, too. This map highlighting parking and vacant lots in the downtown core was developed by Chris Higgins of McMaster.
Downtown Hamilton surface parking and vacant lots (Image Credit: Chris Higgins)
Long-time Hamiltonians tend to look at images like this and either shrug that it's just "normal" for so much of the downtown core to be low-value land use, or else despair that nothing will change.
New Hamiltonians look at images like this and all they see is an exciting opportunity to create new things.
We need that optimism. We need that enthusiasm. We need that refreshing lack of cynicism.
Some people - including some councillors who know better - have suggested that we should use the $1 billion LRT funding to chip away at that infrastructure backlog instead.
LRT vehicle on display at City Hall last year (RTH file photo)
First of all, the Province has made it very clear that the money is for LRT, not for a grab-bag of municipal wish list items.
If we don't use the money for LRT, we don't get the money - and some other city in Ontario would be only too happy to take it.
Second, even if we were allowed to spend the money filling a backlog of potholes, at the end of the day we would be in exactly the same situation we are now.
We would still have a stock of infrastructure we can't afford, a band of under-performing urban properties, and a cost/revenue model that puts us $200 million further into deficit each year.
LRT is truly a game-changer. It will transform this city, changing our long-term trajectory in ways that future generations will look back and study.
But change is scary, and some people are suddenly waking up to just how big of a change we're talking about. I think that's why some councillors are getting cold feet.
What should really scare us is the unconscionable risk that we will turn our backs on this once-in-a-generation opportunity and remain stuck in a status quo that stopped working a long time ago.
Please take a few moments to tell Council to take YES for an answer, reaffirm its support for LRT and accept the full capital funding from the Province that Council has consistently voted for since 2008.
Update: updated to clarify that the tax revenue research was cone by YAH and HBSA based on Joe Minicozzi's research methods
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