March 2, 1998
Fixing Winnipeg's Urban Sprawl
The debate over extending Winnipeg's water supply to Headingley has revived discussion of that perennial bugaboo -- "urban sprawl".
For many sprawl is a problem because a widely dispersed city requires more expenditure on sewer and water lines, roads and protection services. These higher infrastructure costs all translate into higher property taxes.
People can escape paying their share by moving to lower-tax communities just outside the perimeter: they simply work and consume services in Winnipeg without paying for them. As the city's population falls, capital and operating costs are spread over fewer people. Taxes must then go up, but this stimulates even more flight to the exurbs. And so on.
Winnipeg's land area increased by 373% between 1971 and 1991, yet its population only doubled. The response to the lower density? Zoning and controlled development policies that banned projects deemed "inappropriate" by faceless planners. If it didn't fit with "Plan Winnipeg", they didn't want it. These simplistic central-planning approaches only made the problem worse.
The most ambitious attempt to prop up the city centre amalgamated 13 municipalities into one big "Unicity" in 1972. In theory, this plan intended to pool resources and spread the tax burden over a wider area. In practice, however, we ended up with a complicated city structure and onerous administrative and service costs. It only accelerated the pattern of dispersal by increasing city taxes further.
In the meantime, the real causes of sprawl remain unaddressed. Some can not be altered, but the man-made ones can.
First in the "can't be changed" category is technology. Highly compact downtowns, which functioned as concentrated retail and commercial centres, made sense when travelling long distances was a major undertaking. The easy mobility afforded by the car reduced this advantage. Now the Internet has destroyed the very concept of distance by enabling people to work, shop or bank virtually anywhere.
Nor can Winnipeg's topography ever be changed. The urban planner's misfortune here is our lack of natural barriers to sprawl, such as the oceans and mountains that contain Vancouver. Winnipeg sits in an open prairie, so it will always spread unless we deal with the man-made factors.
Last year Filip Palda, a Montreal economist, wrote an enlightening article in Next City magazine that linked urban sprawl to the strange way we finance city services. He explained how property taxes eliminate the competitive cost advantages of city centres: "When a compact area with many people uses a service with high fixed costs -- roads, water distribution, police, most city services in fact -- the cost of providing the service to each one is small".
But property taxes are levied without regard to the actual cost of providing services to an individual lot. Consequently, the inner city, where costs are low due to higher population density, pay absurdly high taxes. The suburbs, where costs are high due to lower population density, pay absurdly low taxes. The result, Palda writes, is a city that sprawls instead of rises.
Winnipeg spreads because its high operating costs are thrown into one pot and then apportioned unfairly through a property tax system that ignores the lower costs of servicing high-density neighbourhoods. The city centre subsidizes the suburbs.
Palda's solution is to break the city up into smaller neighbourhoods and have each area charge user fees based on local costs. If this happened, areas with denser populations would quickly gain a powerful cost advantage over more dispersed ones. The property tax would go. Non-residents outside the perimeter would have to pay for the services they consume in the city.
Forget the "Berlin Wall" approach. Get rid of property tax and adopt a neighborhood-based model of local services financed by user fees.
And end the cause of sprawl.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."