Canada: Smart Growth - A Model for Toronto

Address To The Canadian Urban Institute - April 13 2000

In the 70s and 80s, Toronto was known in North America as its most "liveable city" – clean streets, a crime free, walkable downtown, great architecture, great transit, and liveable neighbourhoods. But a combination of tough economic times, the lost development cycle in the mid 90s, huge public deficits, restructuring, and sitting on our laurels, have caused many of us to feel that we have lost our way.

There are a number of prominent individuals who have sounded the alarm bells -- that we are drifting and falling behind. Most recently Alan Gottlieb has said that "Toronto is coasting and drifting -- drifting dangerously off course". The Fung report says very bluntly that revitalization of the City core is necessary and that the Downtown core should not be permitted to "decline further because of the economic implications to the Region, the Province, and the Country."

Joe Berridge in his treatise on "reinvesting in Toronto" pointed very clearly to what the competition is doing and the strategic infrastructure reinvestment programmes that are being carried out in U.S. cities. The main U.S. cities no longer conform to our comfortable view of a dysfunctional U.S. city. There has been a major paradigm shift of thinking about what makes a good liveable city, and the American cities are way ahead of us in appearance and in function.

So, I want to add my voice to the clarion calls sounded by others because we are at serious risk.

We need to reclaim our title; we need to renew the vision that we once had; and we need to get back on track. Because at stake is more than just the title. At stake is the economic future of our region, and our ranking amongst the other city regions in North America and in the world, with huge potential consequences to us in the 21^st Century.

When we look south, we look down our noses at the American cities, but many American cities have surpassed us. Many U.S. cities are going through a renaissance -- Miami, Boston, San Francisco, Baltimore, Chicago and New York.

As Berridge put it:

It is instructive to look south of the border, to see what the American city states have done and are doing to position themselves in the 21^st Century as liveable communities and economic power houses.

It is an irony that in the past we have always been looked up to by U.S. cities as the foremost example of how to do it, and how to do it right. Planning and planned communities were our credo – in contrast to the urban sprawl and downtown decay in most U.S. cities in the past.

Well, sometime in the last five years, the roles have reversed. U.S. cities have leapfrogged us. They call it "Smart Growth", and it has taken over like wild fire. Every major city, every state and every Federal Government agency now espouse it.

"Smart Growth" means stopping urban sprawl, redeveloping and reinvigorating inner city cores, repositioning themselves for the 21^st Century, transit, no more freeways, more green space and communities of liveable neighbourhoods. It also means using smart, creative funding solutions to achieve the type of communities and urban cores that they want to see. U.S. cities have redefined their strategies and are implementing Smart Growth– from Guiliani’s New York, to Dennis Archer’s Detroit, Richard Daley’s Chicago, San Francisco, Boston, San Diego, and a whole host of others.

One of the defining moments came when Atlanta "hit the wall" -- when Atlanta’s urban area hit 110 miles (not kilometres) end to end -- with grid lock on their freeway system, 7 lanes across in each directions, around Atlanta lasting 3 – 4 hours each morning and evening peak.

Throughout the first two-thirds of the ’90s, Metropolitan Atlanta was focused on one goal – preparing for the 1996 Olympics. This was to be Atlanta’s shining moment on the international stage, and every level of government was focused on making sure that the city was ready. The area awoke the morning after the Olympics with a very bad hangover. Metro Atlanta growth had spun out of control, going from 65 miles across in 1990 to 110 miles by 1997; congestion was spreading rapidly throughout the burgeoning suburbs, and 13 counties in the region were on a collision course with federal air pollution laws. Five hundred acres of land were being taken up by development each week, and the Chattahoochee River had reached its limits, both in supply and as a receptacle for run off. By 1998, Atlanta’s Olympic role had been eclipsed in the national consciousness by its new status as the "poster child for suburban sprawl", according to the Wall Street Journal.

It was at this point, however, that a combination of far-sighted leadership by the Metro Atlanta Chamber of Commerce, the Mayor and the receptive ear of Georgia’s new Governor, Roy Barnes, came up with a plan to turn things around. The Chamber of Commerce, recognizing that traffic congestion would harm economic development, organized the Metro Atlanta Transportation Initiative (MATI) in June 1988 to examine regional transportation needs. The MATI board represented a broad range of regional interests, including state and local government, transportation and environmental protection agencies, education and business sectors. This led to a plan, which was adopted by the State Governor, who sponsored and passed legislation to create a Georgia Regional Transportation Authority (GRTA) with the unprecedented power to approve road projects, build and operate mass transit, and turn thumbs up or down on major developments.

The Georgia State Government also began re-examination of Georgia’s planning act and realized that land use practices were at the heart of regional growth problems – with transportation congestion but one of many symptoms. The Growth Strategies Reassessment Task Force that was appointed recommended that a state vision for growth management should be developed (unheard of in the U.S.!); That state funding and permitting should be used as an incentive to encourage compliance with state planning and growth management requirements.

A key component of the renewal strategy has been the involvement of Atlanta’s business and community leaders in helping to manage and direct future growth through a number of agencies, such as the Atlanta Development Authority and the Central Atlanta Progress Partnership. It has been recognized that a healthy partnership between government and the private sector is vital to the successful implementation of a sustainable development strategy.

Today, Atlanta, with State help, is building mass transit, having redirected all monies from roads to transit systems, and is focusing on the redevelopment of older inner city industrial areas into new residential and mixed-use areas at higher densities to counter sprawl and to bring back population into the city of Atlanta proper, which throughout this period had been losing population despite the unprecedented population boom in the suburbs.

A second and pivotal defining moment came when the Federal Administration decided to step in to assist U.S. cities reposition themselves for the 21^st Century. Under the title "Liveable Communities for the 21^st Century", the Clinton/Gore Administration crystallized the issues that faced American cities going into the 21^st Century and what the Federal Government, in conjunction with state and local governments, needed to do about it. The initiative was announced by Vice President Al Gore in a speech at the Brookings Institution in September 1998, and is credited with coining the phrase "Smart Growth", which has since become the banner around which all the major cities and all 50 states have rallied to reshape their cities.

The speech by Gore began by asking the rhetorical question of why it was that America’s cities and America had lost its way in creating and shaping its urban fabric. "This Nation’s cities and villages used to be a model of civil life," said Gore. "We were the experts at creating the gathering places, the very architecture that set the stage for democracy". As American’s cities grew in the late 19^th Century "their life took the vibrant shape of America" and "as the 19^th Century drew to an end, America looked around at its new wealth and diversity, and the city beautiful movement was inaugurated: proud civic buildings, libraries and post offices, town halls and colleges, parks and recreation areas, ornate commercial buildings, and statuary, all proclaimed to the world that [we] had plenty to be proud off". But somewhere after the second half of the 20^th Century, he noted, that vibrancy and greatness became tarnished, with urban cores emptied out, ill-thought out sprawl, and crime and disorder haunting many central cities.

What followed in his speech was a blueprint for reversing the trend through federal, state and local government policies, involving local citizens and local community groups, and coalescing into one American movement. "Americans are resourceful people", he said. "while the blight of poor development and its social consequences have many names, the solutions, pioneered by local citizens, are starting to coalesce into an American movement. Some called it "sustainability"; some called it "Smart Growth". This movement across the country is showing us how we can build more liveable communities, where we can walk and bike and shop and play together".

More importantly, he talked about the importance of strong, dynamic American city states being central to a strong America in the 21^st Century:

He then laid out a series of carefully targeted incentives to encourage smarter growth. He acknowledged that Federal policies that may have been well intentioned, had in fact encouraged and subsidized runaway sprawl, particularly through the federal highways programme. In its place the federal government now proposed massive support for mass transit and light rail systems – "not to restrict growth in any way, but to reward growth that strengthens families- friendly communities". The American government launched a number of key initiatives, including:

• a $9.5B ("better America bonds") municipal bond fund for the purchase of green space;
• a $200B transportation and mass transit initiative under a programme called TEA, the Transportation Equity Act for the 21^st Century;
• a $100M pilot project for "Location Efficient Mortgages" (employees that buy houses near their employers and near transit get a $3,000 credit; Edmonton is now experimenting with this);
• a $50M per region "Smart Growth Strategies" matching grant for regional initiatives and local partnerships to pursue smarter growth strategies;
• new empowerment zones to encourage reinvestment in older areas; and
• a brownfields redevelopment strategy for the redevelopment of waterfronts, old industrial areas and urban revitalization generally.

The Clinton Administration initiative in 1998 was important not just because of the funding programmes, but also because it focused attention on the main issues facing modern urban centres and their regions, and set out a series of solutions for intelligent development into the 21^st Century.

Some of these solutions had developed through trial and error and through the initiatives of individual cities such as Boston (with its Festival Market), Baltimore (its Inner Harbour redevelopment), San Diego (its spectacular redevelopment of its entire waterfront and central business district, including a Toronto style LRT), Detroit, Denver, San Francisco, and Miami (its old art deco "South Beach" area).

What is most significant, however, is that the Federal initiative and the Smart Growth concept has received a broad and sweeping consensus of all 50 state governors, the National Governors Association and most mayors of the major urban centres. It is remarkable that the Republic Chairman of the National Governors Association, Governor Leavitt of Utah and the ranking Democratic Vice-Chairman, Governor Glendening of Maryland, both appearing at the 3^rd Annual Smart Growth Conference in San Diego would both espouse the very same values and programmes in a non-partisan way.

Beginning in October 1998, under its Smart Growth and Neighbourhood Conservation Act, Maryland required each local government to make an enforceable growth plan and directed county governments to designate "priority funding areas" for development. Only these areas are eligible for state money, including highways, water and sewer, housing and economic development aid.

What is clearly obvious is that in the United States, the political leadership at all levels, has linked a high quality of life with sustainable economic growth of city regions, and with liveable communities, through a concept and a movement called "Smart Growth".

At its core, Smart Growth is a concept that links development and quality of life. It seeks development that will simultaneously improve the economy, build community, and protect and enhance the environment. It is not anti-growth, nor is it an enemy of suburban life styles. Smart Growth is the enemy of inefficient growth that increases pollution, worsens traffic congestion, degrades neighbourhoods and the sense of community, has higher infrastructure costs, increases taxes, and destroys or damages environmentally sensitive areas.

What is even more interesting is to see what some of the U.S. states and cities are currently doing to build on this Smart Growth concept.

• The major cities in the U.S. are reorganizing themselves as city states, or city regions -- powerful engines of economic activity and growth. They are revitalizing and redeveloping their cores, using Smart Growth and smart financing techniques, to stimulate, attract, regenerate, and pump the energy of their region to all its vital parts.
• Over 30 states have mandated urban growth boundaries to stop sprawl. Maryland, Georgia and Oregon have gone further and legislated that no money can be spent on any services, roads, sewers or other infrastructure that is outside the approved urban growth boundaries.
• The Federal and State governments have redirected massive amounts of highway funds from highway construction to transit.
• Federal government has acknowledged that its 1954 Highways Act has been the root cause of sprawl in America, and needs to be reversed.
• San Diego has a $24.6 billion comprehensive transportation plan, including rail, transit, buses and roads.
• Greater Atlanta has indicated that it will not build any additional freeways, transferring its full budget to transit.
• Cities are redirecting development and housing to their cores and older inner neighbourhoods. San Diego, Baltimore, Cleveland, even Pittsburgh, Miami (South Beach) are all good examples.
• Cities are doing strategic growth plans to position themselves for the 21^st Century, and they do it in a smart and cost efficient way. The Envision Utah Strategic Plan for Salt Lake City is a good example, because it also shows the involvement of the general public in the planned development process, and the cost analyses that are at the centre of the growth scenarios being considered.
• Higher densities are being proposed and achieved, and great architecture is springing up as a result.

• the entire CBD of San Diego, and especially Horton Plaza is a great example.
• mixed uses or a greater mix of uses are proposed in neighbourhoods, to create identifiable communities and increase density.
• the "New Urbanism" concept in housing, which started in San Francisco and California is one of the results of Smart Growth (and we now see it coming to Toronto on the old Woodbine Racetrack site, in the beaches, in Cornell, Markham).

• Brownfields redevelopment is occurring in most cities, particularly the brownfields sites in city cores and in older neighbourhoods. Atlanta’s Atlantic steel 140-acre redevelopment is cited by the EPA as a model example of urban redevelopment of a brownfield to appropriate environment standards.
• Much has been done through collaborative consensus building involving all the major stakeholders: the environmental/conservancy groups, developers, residents and ratepayers association, chambers of commerce and local businesses, and a new breed of mayors and state governors (who "get it").
• Much of the heavier lifting, in terms of redevelopment, and particularly redevelopment of new infrastructure, has been done through public private partnerships, and through redevelopment agencies (which involve the private sector as well as the public sector).
• Much of the financing is being done through smart financing techniques, which leverage scarce public funds. As examples:
• The U.S. has long had tax exempt municipal bonds. They are using these for targeted redevelopment areas. The "Better America Bonds" will go one step further, to give investors tax credits, and to save municipalities the interest cost on their municipal bonds.
• 43 states have passed legislation to permit "tax incremental financing (TIF’s)", which provide 20 – 26 year money through property tax concessions for the redevelopment of strategic properties in local municipalities. Strong CBD core redevelopment is occurring through the use of tax incentives.
• Substantial amounts of private sector money have been coaxed into downtown redevelopment projects for the use of public private partnerships, which include private sector incentives, the provision of tax room, fast track approvals, and strong public support.
• In downtown waterfront investments – with the exception of Boston and Detroit – public funds have been judiciously levered to encourage private sector funds to flow.
• Public pension fund monies have been roped into Smart Growth projects:
• the American Commodities Fund and Fannie Mae have put aside a $100m pilot project
• Public REIT’S have allocated $1B (so far) for Smart Growth projects.
• Bank of America has established a $500m "catalyst fund", being a mortgage and investment fund for Smart Growth projects. Nations bank and mercantile are following suit.
• California has directed its State Pension Fund to lend to projects that embody Smart Growth, and $100m has been earmarked already.
• California has instructed the State Infrastructure Bank to allocate $500M for new infrastructure requirements for Smart Growth projects.
• California has also instructed its State Investment Pool to purchase $2B of existing mortgages held by private institutions for affordable housing loans, in order to free up their $2B for additional affordable housing mortgages.
• Brownfields legislation to scope EPA and CERCLA liability for soil and ground water contamination and to facilitate redevelopment of old industrial sites has been passed by over 30 states, with resulting redevelopment in many cities now under way.

The final interesting point about the Smart Growth initiative in the United States is that it involves major private sector corporations, as well as the major environmental organizations and community activist groups and relies for its funding not just upon innovative public sector funding programmes, but also upon the new concept of public-private partnerships.

Corporations such as Bank of America, AIG, AMB, , and a whole series of pension funds have put major funds into Smart Growth initiatives. Chambers of Commerce in Atlanta, Boston, New York, Dallas, Denver, Detroit, Indianapolis, Miami, Minneapolis, San Francisco, St. Louis, to name but a few, are involved through municipal development authorities or downtown development partnerships. Environmental groups such as the Conservation Fund, Sierra Club, the Trust for Public Land, the Environmental Defence Fund, the Coalition for Clean Air, and the U.S. Environmental Protection Agency are all heavily involved in the Smart Growth movement.

Many of the states are hampered in the amount of funding that they can provide as a result of proposition 13-type restrictions stipulating no new taxes for public projects. Yet they have major revitalization initiatives under way, as in the case of California, through a series of private sector collaborations. Many of the downtown revitalization efforts are being carried out through downtown development authorities issuing their own (tax exempt) municipal bonds. These DDA’s in many cases are dominated by private sector appointees, and many of the downtown redevelopment projects are being done through public private partnerships formally established at the city level. Also through the smart use of instruments such as tax incremental financing and empowerment zones, cities such as Detroit, for example, have been were able to attract $4 billion in private investment, thus leveraging their relatively modest public financial contribution substantially.

The lessons for Toronto and the Toronto GTA from this recent American experience are substantial.

It is ironic, that at a time when America is stopping its urban sprawl, combating congestion on its freeways, and turning development back into its inner cities, we in Toronto seem to be going the other way. We have lost control of the growth management of our region. We are permitting more and more urban sprawl, with the concomitant traffic congestion that now occurs on the freeways in the 905 region. Congestion affects the movement of people and goods with tremendous impact on economic productivity.

We have to provide for an additional population of 2 million by 2021. Where and how are we going to do this? We have no clear game plan. We are going down the same path as Atlanta pre-1997, and we haven’t even won the Olympics yet!

For once we may have to take a page from the American book in order to reclaim our title and renew our vision. One thing is clear: if we don’t make the necessary adjustments, we will be left far behind the successful city states and city regions of the 21^st Century.

We have a terrible lack of infrastructure funding, at a time when much of our infrastructure needs renewal, and where some of our existing infrastructure stands under-utilized because of urban sprawl. Investment in infrastructure is important to keep our quality of life, and more importantly if we are to reach our full economic potential, or keep what we presently have.

We need a vision. We need to ramp up on Smart Growth principles, and we need to challenge some ideas and concepts, and challenge ourselves on how we see our City in the year 2050 and 2100.

We need a new City of Toronto official plan that captures most of the Smart Growth principles and forms them into a vision. But we will also need to have a series of planning documents for the rest of the GTA which will address the growth management and other aspects of the overall plan. In this regard, a restructured Greater Toronto Services Board, with clear responsibilities, and with teeth to make things stick, is essential.

We need to remember what Vice President Gore said: that a liveable Smart Growth community will be an economically powerful community, well positioned for the 21^st Century challenges.

We will need to cajole and coax our Federal and Provincial Governments into involvement in this renewal with money, creative financing, and creative tax schemes and incentives to stimulate and to help finance the infrastructure that will be required, and we will need to establish public private partnerships and alliances and coalitions between the major public elements and the private business sector who own the major industries and businesses in the GTA.

A pivotal role should be played by the Toronto Board of Trade and the Chambers of Commerce of the 905 region municipalities, as well as the major community activist organizations. We need an active and informed citizenry and business community.

We also need to realize, as the U.S. cities have now realized, that we are sitting on valuable, unused assets in the old under-utilized industrial areas that have been sitting vacant and covered with dust for the last 10 – 15 years. We have tried to hold on to them, as the Americans also tried to do, for new industrial uses -- for years on end, and to no avail. We need to realize the great potential that lies in unlocking these valuable lands – just as Baltimore did with their inner harbour, Boston with its Festival Market, and San Diego with its port lands -- for vibrant mixed-use projects, people places, for night life, residential, retail, restaurant, entertainment, office/live work places and uses.

And finally, we will need to do something about our commercial property tax structure in Toronto. Toronto has the highest real estate taxes of any downtown in North America, including New York and Chicago. The successful downtown redevelopments in the U.S. have all occurred in cities with commercial property tax rates less than half those in downtown Toronto. Property taxes should be used as an incentive to encourage investment and redevelopment, rather than a disincentive to drive investment away. And in this regard, Toronto has to compare its commercial tax rates with those of the other major U.S. cities -- not just Mississauga or Vaughan or Oshawa -- because major investment is being made on a North American geopolitical level.

The Olympic bid should be looked at as part of the long term strategy for repositioning Toronto in the North American environment for the 21^st Century, but should not be looked upon as the implementation tool. A Smart Growth strategy will be needed whether we win the bid or not, -- indeed the bid has the potential to delay some of the necessary steps that will need to be taken regardless of it. In this regard, Joan Busquets, the former Planning Commissioner of Barcelona who spearheaded Barcelona’s Olympic bid, had it right when he said that Toronto will need to plan its future on a double track.

The Fung report is a good start in implementing some of the Smart Growth principles. It endorses the principle of the critical need to revitalize the core of our City state. The politicians who haven’t read it, or have been too busy to read it, or don’t particularly care just don’t get it!! This is the complacency and the old style thinking and smugness that has got us to where we are, and could get us into serious trouble.

The report needs to be supported and pushed strongly. Fung got it right when he said that there is an urgent need to ensure that Toronto endures as a city and a region with a healthy core. And he got it right when he said that you need easy and convenient access to the core. Billions of dollars are lost by commerce each year through traffic congestion, and more billions are lost when businesses move out of the core because of this.

We have all the critical ingredients for a highly successful North American city region and a world class city: we have a wonderful natural setting on the shores of Lake Ontario with a phenomenal recreational hinterland to the north. We have a population that is highly educated, sophisticated and culturally diverse. We have a long heritage of a safe and a clean city, with a cultural, film and entertainment industry that is recognized as 3^rd on the continent. We have the advantage of good past planning practices, which in large part kept us out of the abysses into which many of the American cities fell.

We need only to draw on all of our resources and the ingenuity and clever minds of our citizens to regroup, rethink and reclaim our title as the Number 1 liveable city of the 21^st Century.