“Addicted to Development” is a phrase that may describe our current municipal condition. Between 2001 and 2010 our budget will have grown by at least twice as much as our taxes have increased. Our island municipality is spending about 8% more every year than it did the year before – but our property tax goes up by about 3.5 or 4% as regularly as clockwork. When most of us look at our tax bill we immediately notice the Translink or School portion but few of us stop to think about how our local bureaucracy can grow as it has without our taxes exploding along with it.
There are two major factors that come into play. The first is “reserves”. These are monies saved over a number of years and kept in savings until we need them for a specific project. Over the last few years our tax bill has been kept artificially low because we have been drawing down our reserves without replenishing them. While this appeases us somewhat because the roads are finally getting repaired we don’t realize that our road repair fund is getting seriously depleted. The second major factor is the growth in our tax base. Simply put, every time a developer converts a one million dollar lot into five lots worth four hundred thousand dollars each, our tax base increases by one million dollars, which in turn generates $3,000 per year towards municipal spending. Every time a house is built on a lot the coffers swell again. And these aren’t one time deals. Every one of these additions to our community generates that municipal income year after year, hopefully forever.
When you think about it that way development is a great idea. There are only a few problems. First of all, there is a problem associated with creating a whole bunch of building lots year after year to increase your tax base. Eventually you saturate the market and the gravy train stops. You reach a point where developers get approval to create lots but hold off on doing it until there is a market for them. A community that has gotten used to using a growing tax base to mitigate tax increases suddenly has a problem. Usually the same sort of case is made for house construction but there-in lays the second problem. The new houses usually have people in them and that throws a wrench into everything. The new community members start demanding more infrastructure and services and, before you know it they cost as much as they’re contributing. From a cost/benefit perspective empty lots are much more appealing.
Let’s take the turf field as an example. $375,000 worth of reserves was depleted to build it. Now we not only have to replenish those reserves for future playing fields, we also have to set aside $12,500 each year for the eventual replacement of the artificial turf. That’s all of the general municipal taxes paid every year by 8 average homes just to cover that one reserve item.
The trick is to subdivide property in such a way as to increase the tax base but not actually allow any people to live on it. In the real world it’s called commercial and industrial zoning. But on Bowen we could settle for retail and light industrial mixed- use areas. And this really is where the rubber meets the road for Bowen. The days of remaining rural and not providing any services are past. The days of allowing rapid residential development are about to prove insufficient. The days of depleting reserve funds are about to end. We now have to make a decision. Do we want to become the island suburb of West Vancouver, a place where light industry is beneath us, a place where we would prefer to pay higher taxes and maintain our position as an elite quasi-rural residential community? Or do we want to become a complete community where we allow multifamily housing that will attract those of more modest incomes, where we zone property for warehousing and workshops and micro-manufacturing that will build our tax base and keep residential taxes down?
The answer to these questions is not straightforward. Each direction has positive and negative elements. Following the path of residential only development may increase our property taxes, deprive us of amenities, slow population growth and make Bowen a seasonal community of summer homes for the wealthy. But it may also increase the value of our property, protect the natural environment and keep our year-round community tightly knit.
Conversely the other path may help us to achieve a more diverse community where our adult children can afford to live. It may keep our taxes in line and provide us with local services so that we don’t have to take the ferry to go shopping or to go to a recreation centre. It may also create employment opportunities that reduce the number of us who have to commute.
Of course we hope that we will have the wisdom to make decisions that enable us to achieve the positive aspects of both paths. But the growth in our local government expenditures without a corresponding growth in our capacity to cover the costs may be making those decisions for us. It is not a new story. We’re getting in over our heads and we may soon find that we are addicted to the quick fix that ever more development offers, even if that development isn’t taking us to where we thought that we wanted to go.
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