Does Development Pay for Development?

I wish to respond to this letter that appeared in the June 24 edition of the Daily Townsman. The City has agreed to invest $676,000 to complete the services through the Havaday (Wildstone Lands) in order for Shadow Mountain to connect at the bottom of Echo Field Road. The letter indicated that this is a result of poor planning but does not contrast the sharp economic downturns in the global economy that put the Havaday lands into jeopardy. This investment announced by the City is a good investment to secure future services lands and to expand the tax base. The monies that will be invested by the City are not taxpayer funds and will be funded from the Development Cost Reserves (paid into by developers) and the Utility Reserve Funds. The City will be able to recoup this investment with connection charges and future tax revenues. The letter refers to this as “Leapfrog Development” but does not consider the incredible opportunity that now exists for all the lands located between these two projects

The letter further states that “little is done to address the more urgent need for affordable housing” but fails to point out that the City is limited in land base for future high density zones where typical affordable housing is located. The City has been faced with a land shortage for multi-use residential properties for some time now. The new servicing lines will open up a land base between the Wildstone property and Shadow Mountain that can be planned development for multifamily units, mid- to high-density development and affordable housing with public input and planning. This expansion of services to the north increases the supply of lands that will assist in alleviating these concerns.

The same letter speaks about affordable housing and also indicates that Development Cost Charges are too low. In the past, this group has advocated for Development Cost Charges per lot similar to that in Invermere & Fernie. ($14,000 to $16,000 per residential lot). This policy position of the CLC is also contradictory. To apply DCC rates of this extreme would be detrimental to investment and affordable housing. The average sale price in these communities is in excess of $385,000 compared to the City of Cranbrook at approximately $289,000. The City of Cranbrook has acknowledged that the DCC bylaws will be reviewed once the Growth Management Study is complete. This study will estimate and budget the future needs and assess our current infrastructure to apply applicable Development Cost Charges to ensure balance, fairness and a science applied formula of our future infrastructure needs.

The letter states, “It’s the citizens that pay for leapfrog development and poor planning.” I disagree with this conclusion. Basic economics show that investment into our community through construction and development creates jobs, attracts new residents who do in fact contribute to the economy and hence expands the tax base of our municipality. A BC Labour Force survey on the Kootenay Region indicates that construction and related fields employ more jobs than the Mining and Forestry Sector, the Health Sector, or the Education Sector. The area has seen a great improvement in its employment numbers since the 1990s by attracting new investment to the city and diversifying the economy. It is always acknowledged that every sector of industry contributes vastly to an economy but diversity is the key to creating sustainability. The City of Cranbrook over the past 15 years has made significant improvements and expansion to diversify its economy.

The letter indicates that only “full-time residents contribute to the economy” and denotes that many of these projects are designed for recreational use. I disagree with this statement on two fronts. All residents in a community contribute to an economy regardless of part-time or full-time residency. Secondly, one has to look at the origin of buyer data and examine the sales data to see that there is not an abundance of part time residents. Cranbrook has seen a shift in trends of the origin of buyers who choose to call Cranbrook there home for a lifestyle choice — not necessarily speculative recreational high end projects as indicated by this letter. Thirty per cent of MLS sales in 2009 were sold to out of town buyers.

I fear that all the negative attention will impede, and drive investment out of our community. Cranbrook is so much better positioned today with this downturn in the economy than it was in the 1990’s. There are still tough times ahead, but with new investment we can better navigate the current economic turbulence in the markets.

“Does development pay for development?” … or does development mean investment into our communities and diversity in our economy that allows for growth, prosperity, and opportunity for all our residents?

Jason Wheeldon

Cranbrook