Tuesday’s council meeting was lengthy, going long into the evening. Most of the items were resolved as expected, and as I outlined Monday in the council preview. The exceptions and additions are below.
Developer fees
Council discussed the “Capital Cost Contributions”—CCCs for short, which are fees to be charged to developers—for about two hours. The end result is a proposal to charge new transit fees only in the so-called “greenfield” developments that have gone through the secondary development process. Cutting through the bureaucratic-speak what this means is this: right now, just the big sprawling areas already approved for suburban development—the two Bedford West areas, Sandy Lake, Port Wallace in Dartmouth, Russell Lake and associated areas in Eastern Passage and Cow Bay—will be assessed the fees. As other big sprawling areas go through the development process, they too will have to pay the fees. But “infill” development elsewhere—say, a 10-house development in the middle of an already built subdivision— won’t face the fee.
Council’s conversation was remarkably productive, and the adopted proposal makes sense. But the development industry, however, will no doubt bemoan the new fees. The rhetoric around this is fascinating; councillor Reg Rankin’s assertion is that the fees are “passed on” from the developer to the home buyer, and so are therefore a “consumer tax.”
But if developers merely pass on the tax, why do they care? In reality, the market is much more complex than they argue. No doubt, savvy business people that they are, developers are already charging the highest price the market will bear. Increasing developer fees won’t therefore increase the price of the house, because they can’t increase the cost beyond the top market price they’re already charging. In short, the fees come from their profit margin, not from the consumer. (Granted, there will be other market distortions due to the fees, but that’s not the argument the developers are making.)
City staff, however, rejects my argument entirely and has bought into the assumption that the fees result in higher price homes. Still, they hired the consulting firm Gardner Pinfold to examine the effect those higher prices, and report back that:
In broad terms, the study found that the past CCC’s in HRM have had no adverse impact on the market and further increases, of up to $10,000, are not likely to materially affect affordability in the new house market. Development charges on their own account for approximately 1.1% of the median price of a new single detached house in HRM, among the lowest impact of the cities surveyed.
The development fees proposed Tuesday will amount to about $400 per house on the houses built in the greenfield developments. The Gardner Pinfold report is found here.
Besides all that, even if the fees were entirely rolled into housing prices, and the buyers of those houses had to pay the extra 400 bucks, so what? That’s the real cost of providing services to those houses. Why should the rest of the city pay it?
From here, with council’s direction clarified, staff is going to “consult” with the developers. Who knows how that will play out, but the issue will come back to council in a few months.
Secret meeting
Council had a two-hour secret meeting yesterday, and by my assessment the secrecy was entirely inappropriate.
There were three issues discussed in the closed session. The first was a broad discussion of potential conflicts of interest by councillors, and for that Merlin Nunn was invited in to talk with council. Nunn is a retired Justice of the Nova Scotia Supreme Court, and is perhaps best known for chairing the Nunn Commission, which examined the issues behind the death of Theresa McEvoy and the very bad behaviour of 16-year-old Archie Billard, a repeat young offender.
Nunn was pleasant when I met him exiting council chambers, but he wouldn’t give me any details of the discussion beyond “we were talking about conflicts of interest.” Why’d it take so long, I asked. “They had lots of questions.”
The exemption to open meeting laws for legal advice serves an important purpose. Council often is negotiating contracts or potential settlement offers, and if the details of the discussions with legal staff became public, it would put the city, and taxpayers, at a disadvantage. But while council was sort of, vaguely, getting legal advice, it wasn’t about anything that could adversely affect the city or taxpayer, so secrecy was uncalled for.
I imagine most of the conversation dealt with theoreticals, or David Hendsbee’s quite stupid claim that he has a conflict of interest because he sits on the board of directors of the Home For Coloured Children. I believe this “conflict of interest” to-do started when Dawn Sloane claimed that her duties as a council-appointed director of Trade Centre Limited conflicted with her position as councillor, but of course the entire point of having councillors serve on the TCL board is to watch out for the city’s interest, not to bug out whenever there’s a conflict with the city.
Anyway, had the conversation been in public, the rest of us would’ve learned a bunch of stuff too, and we’d be better citizens and watchdogs. As is, there’s no minutes for the discussion, no public record, so even if a councillor in the future utterly rejects Nunn’s advice, no one will be the wiser.
The second issue at close session was making citizen appointments to the Metro Housing board. As Gloria McCluskey has repeatedly pointed out, the old cities of Dartmouth and Halifax made such appointments in public and the sky didn’t fall. There’s no good reason not to have these discussions in public.
The third issue discussed was added at the last moment: a “design/build/lease” of a transit terminal. Because it was discussed in secret, I have no idea what that is about, but it appears by its description to be a 3P project, a public-private partnership. These have in the past been extremely problematic, and council should involve the public before embarking on them again.
There are no new transit terminals called for this year or next in Metro Transit’s planning documents, so I’ll assume that the transit terminal proposal is an unsolicited offer, maybe by one of the malls. (I’m told directly that it’s not a rebuild of the Mumford Terminal, however.)
As with legal advice, there are good reasons to give council an exemption to open meeting requirement when it is negotiation prices on a contract: by giving away its negotiating position ahead of a deal being made, the city is put at a disadvantage. But there are no issues of competition here: a specific offer was made, and the city can take it or leave it, or offer a lower price. It wouldn’t have hurt anyone by having that discussion in public, and moreover, the public has a right to weigh in on a potential new terminal before council agrees to it—Is it in the right place? and Is it the best use of transit capital funds? are public issues that should involve the public.
Whatever the transit terminal deal is, it will be announced tomorrow.
Developers care about the fees because they make the entire deal more expensive, and therefore less likely to happen. Less people can afford a new home which is a very direct impact on our economy. Home building is a huge job creator in NS. There is a significant spin off from this type of activity – heck, it creates and sustains the jobs of the very staff people who are throttling it back with the fee recommendations. Yes, they are prescribing a reduction in their own jobs, and driving new development to neighbouring Municipalities.
A subdivision with, say 100 homes, is at least a $30,000,000 project. One I am working on, with a proposed build out of over 2000 homes is huge – of such a scale that the developers wisely chose to keep it out of HRM and allow the taxes generated from it to go to a wiser, faster moving, welcoming Municipality that actually wants new development.
How many real, ongoing $600 million (plus) projects do you hear about that have zero government assistance in NS? We need to start thinking of this type of development in these larger scale, big picture terms, instead of getting all excited about having some foreign company open a call centre with subsidized wages, with very little real economic input to our economy.