Social Housing and Guelph

Synopsis

Social housing is controlled by the county, yet the lion's share of the county's units are in the city. In addition, most of the money that gets spent on it comes from the federal and provincial governments. And those two levels of government have a long history of using that money as a "political football" that comes and goes in response to the back-and-forth battles between left and right. Put into the context of the entire economy and the private development sector, however, the average financial commitment has tended to be woefully inadequate. Indeed, it is hard to believe that any government would be willing to put the amount required to actually deal with the enormous housing problems that we currently face. To this end, it is pretty clear that any municipal government that really wants to address the housing backlog in Guelph is going to have to undertake actions that will be profoundly unpopular with a large part of the electorate. 

What is "Social Housing"?

It's important to realize that there are two components to the idea of "social housing". First, there is the actual building being constructed, which generally has some sort of subsidy towards its creation. An equally important element is a monthly subsidy by the government to the landlords of individual tenants, which is called "rent-geared-to-income".

Rent-geared-to-income is a provincial program governed by the Housing Services Act of 2011 (this link provides updates to 2018.) It is really, really, really hard to understand this act and obviously requires a social worker to navigate through the dense legal language to understand who is and is not able to get this help. (Just to give you one example, the people who are helped out under this program aren't identified as "people", "families", "households", "clients", or, "recipients" but rather as "benefit units".) But as a general rule, people who qualify for rent-geared-to-income find that the cost of their housing is restricted to about 30% of their income. You cannot get rent-geared-to-income in just any apartment, however, as this would encourage private landlords to gouge the province. Instead, the money is tied to specific units that are generally built with money provided by the federal government or the province through specific funding programs. These housing units come in a wide variety of forms---depending on who lives there, and, how they are owned and administered.

One way to think about the different types of housing is to consider how they are owned and managed. In the city of Guelph there are 52 different complexes that provide a total of 2,473 units of social housing. You can break these down into five categories of ownership:  

• non-profit corporations (952) (these can include both Non-Government Agencies (NGOs) and the city of Guelph)
• housing co-ops (253)
• county-owned (882)
• Affordable Housing (27) (defined as being 20% below the average market rent)
• "Rent Supplement Housing" (183) (housing that is privately owned but which has units that the County assigns to people where rent-geared-to-income money is paid directly to the landlord)  

Non-Profits

A non-profit corporation is an incorporated, limited liability company. "Limited liability" means that under the law the individuals involved do not have any personal financial responsibility for the company (unlike a partnership.) A "non-profit" corporation has no obligation to shareholders to make a profit (this is the "fiduciary duty" that I mentioned towards the end of one of my articles about solid waste issues.) Instead, the  duty of the organization is towards the ends that the incorporation articles set out in their charter---in this case, providing low cost housing for people in need. A non-profit need not be a "charitable" company, as that specifically refers to the ability of a group to issue legal tax receipts to donours, which is tightly regulated. (Even though as a matter of fact, some housing non-profits are charities.) Some of Guelph's non-profit housing corporations do have a relationship with larger charities---such as the Abbeyfield Houses Society of Guelph, which is part of a national charity that began in Great Britain.

As a general rule, however, non-profits tend to act as "subcontractors" for the federal and provincial governments who take on the task of applying for money from government programs that fund social housing. They also apply for grants from "hands off" government-supported charitable agencies---like the Trillium Foundation---to build and administer these social programs.

In addition to the Non Government Agencies (NGOs---like Abbeyfield), we also have the Guelph Nonprofit Housing Corporation. According to it's website it has 512 rent units", of which 80% are rent-geared-to-income and the rest are "market priced" (that's something like 410 units.) It has a contract with the county that means that all of the Guelph properties are managed by the same staff that deal with county-owned ones.

Co-ops

In contrast, a housing co-op consists of people who band together to create and manage a housing complex that they "own" co-operatively. It's important to realize that is a system that is different from standard "freehold". There are two ways that a co-op can be organized: "equity" and "non-equity". An equity co-op allows each individual owner the right to sell their property (the individual apartment or townhouse unit they live in) to another person in order to recoup the money that they personally put into it. These sorts of co-ops are very common in other countries, but exceedingly rare in Ontario. (A condo is different in that it is organized and built by a private developer for a profit. A co-op is organized by the owners at-cost.)

Instead, what we generally have are non-equity co-ops that were built under a federal program that operated in the 1970s and 1980s. Under that system, governments supplied start up capital that citizens used to build the housing complex under the understanding that a certain percentage of the units would be set aside for low-income individuals under a rent-geared-to-income scheme. In exchange for this help, the co-op members forgo building any equity in the complex---all capital accrued instead is deemed as belonging to the co-op as a whole. Theoretically, once the money loaned by the government is paid back, rents might be lowered. But in actual fact by the time this happens most of the money raised by rents end up being ploughed back into maintenance. Rents tend to be lower in general, however, because their is no owner taking a profit.

The program to create co-ops were primarily introduced on the assumption that they would prevent a city from shunting all lower-income people into one area. This had been attempted in many social housing programs in the 1950s and 1960s, and it was believed that they failed because a certain fraction of the poor tend to make "bad life choices" (think crime) which tended to drag under other people who were struggling to "get ahead" but who were poor through no fault of their own. Co-ops were designed to have a mix of people from all classes, which would prevent this problem. For a variety of reasons (beyond the scope of this article) the program that supported them was cancelled in the 1980s and they are no longer being built as part of social housing.

(Having said that, there is no reason at all why individuals cannot use their own private capital to build equity co-ops---and I know of at least one current Guelph project "in the works". But these would not be independent from the current market forces---so they would not necessarily be any more affordable than any other type of housing. As such, they have nothing at all to do with social housing.)

County Owned

Wellington county also owns outright a large number of properties that it provides to people of limited income. The lion's share are in Guelph---because that's where most of the need exists. But having said that, it also owns properties in other parts of the county:  Fergus, Elora, Erin, Rockwood, Eramosa, Mapleton, Minto, Arthur, and, Mount Forest. Since this blog tries to deal exclusively with Guelph matters, I won't be dealing with any of these properties. Suffice it to say that there is a need for social housing just about everywhere.

Affordable Housing

As part of the on-going attempts by Council to help the housing crisis, the city of Guelph has been attempting to negotiate with developers to bring in new affordable units whenever a new proposal comes before them. (I talked about this in a previous post.) Some of this has been done through the use of subsidies---either directly or through deferred taxes. The result has been a stock of so-called "affordable housing" units, which is defined as being "20% below the market average".

According to the numbers I found in my first article on housing, here are the average rent costs for various sized apartments, followed by their "affordable cost" (ie: 80%), then the yearly income that a household would have to make to make this equal to at most 30% of their gross income. The way to understand the math is that if you are paying 30% of your monthly income in rent, you can get your monthly income by multiplying your monthly rent by 3.33. And that translates to your yearly income by multiplying by 12. But you can simplify the calculation by multiplying the 3.33 by 12, which gives you 40. So to find out the yearly income of people who are only paying 30% of it in rent, you just multiply the numbers by 40. Unless a rent really is 30% or less than your income, it is hard to say that it is really "affordable". The last number is this hypothetical income where what the city calls "affordable rent" is only 30%.

• bachelor apartment: $750 (average), $600 ("affordable"), and income of $24000.
• one bedroom: $980 and $784, and income of $31,360
• two bedroom: $1,124 and $899, and income of $35,960
• three bedroom: $1200 and $960, and income of $38,400
• average cost of an apartment: $1,066 and $853, and income of $34,120

And again, as I mentioned in my other articles on this subject, the problem is that household income is too low for this definition of "affordable" to be of any service to the poor. That is, if you break down Guelph household income into six groups, you see the following:

• less than $20,000/year, 5,770 or 10.5%
• $20,000 to $40,000, 8,320 or 15%
• $40,000 to $60,000, 8,920 or 16%
• $60,000 to $80,000, 7,635 or 14%
• $80,000 to $100,000, 6,690 or 12%
• $100,000 and over, 17,530 or 32%

The numbers aren't precise, but at the very least 10.5% plus some other figure---let's assume 4.5%---of the households in Guelph (ie: 15%) make less than $24,000/year in gross income. This means that what Guelph defines as affordable really isn't "affordable". For this reason, it's hard to believe that "this affordable housing" category really has an significant impact on housing issues---especially since there are only 27 units in the city.

Rent Supplement Housing

These are privately-owned apartments that the county has entered into an arrangement with to provide rent-geared-to-income. The supplement is paid directly to the landlord. Obviously in a hot rental market like Guelph most landlords would rather rent to the general public. But there are some buildings that for one reason or another the landlord is happy to rent out this way and the county considers "value for the money".  I suspect that there could be issues to pursue here---but this article is already ballooning in size, so I'll leave it at that.

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Federal and Provincial Social Housing Initiatives:  History 101

I had mentioned early on that the federal and provincial governments had been involved in building social housing. I also mentioned that housing co-ops were primarily built under a program that was cancelled in the 1980s. There have been a great many different programs and it would take a lot of time to explain the timeline. Luckily, the Ontario Non-Profit Housing Association (ONPHA) has created this nifty graphic that shows the various programs that the federal and provincial governments have set up, starved for funds, and, eliminated over the years between 1945 and 2011. I'd suggest that anyone who is interested in this subject take the time to linger over it, and make the effort to think about what was going on in the larger Canadian society. Consider, for example, that Jean Chretien was prime minister at the time (1993) that the federal government decided to stop funding any social housing---I assume as part of the general attempt to balance the budget. You can also see that Mike Harris was premier of Ontario when the provincial social housing program was also cancelled (1995.) (I suspect that this was when I remember seeing beggars show up in downtown Guelph for the first time. Politics has consequences in people's lives.)  (Sorry, but this is the best resolution of the graphic that I could get.) 

The Context

I don't have the time to write a complete history or synopsis of federal and provincial social housing policy---and I'm pretty sure that most of you wouldn't read it if I did. But I think it's important to realize a few points.

First of all, ask yourself "What fraction of society is this housing program supposed to be helping?" Canada has several different housing problems going on all at the same time. These include housing on First Nations' reserves. It also includes providing housing for people who are in crisis because of mental illness, drug addiction, physical disability, or, spousal abuse. As well, there are huge geographic areas---like the Greater Toronto Area (eg:  Guelph)---where the commercial real estate market has decoupled from the incomes of most people and no longer provides affordable housing for many middle and lower-income people. All these needs are something that different levels of government need to deal with, but require a huge amount of money. Equally important, each constituency has dramatically different levels of influence over public policy. In a democracy there always is a tendency for politicians to deal with the problems of people who carry lots of votes over those who objectively may have more real need---simply because of electoral concerns. So, when a proposal comes forward for social housing, it's important to ask "social housing, for who?" As I pointed out above, the fraction of housing called "affordable housing"---as defined as being 20% less than the average market rent---appears to only be aimed at lower middle-class people instead of the genuinely poor.

Secondly, it's really important that any program that a government puts forward be placed in a context. When a government minister announces that so much money has been set aside to provide housing for so many households, it is tremendously important to always find out what percentage of the budget the money provides and what percentage of units this will provide to the entire housing market. For example, according to the 2016 federal census, there were 55,900 places to live in Guelph. Of those 5,470 were social housing of one sort or another---or 9.8%. As I showed above, the actual need---as defined as rents for 30% of gross income or less---is really something like 15% of the population, or, 8,390 households. This suggests that if the only way that Guelph can provide affordable housing for the poor is through social housing, it has a backlog of almost 3,000 units.

I don't have a figure for how much it costs to create an average unit of social housing---and I would be dubious about any such number if it was presented to me simply because there are so many different types of housing that fall under that umbrella, and, the cost would fluctuate wildly from community to community based on the cost of land. But to get a feel for the amount of money involved, let's look at something that the city staff have developed a figure to describe. As I mentioned in my last article, city staff have suggested that a subsidy of $60,000/unit is necessary to get private developers to create new "affordable" housing. What this means is that if the County, Province, Federal Government, etc, were to use this subsidy mechanism it would cost something like 174.9 million dollars in Guelph alone to deal with the shortfall in social housing. And let's not forget that this isn't the real cost for creating social housing. Instead, it's the price of creating apartments that are 20% less than the market average for a limited amount of time. And at this price they are unaffordable by that bottom 15% of the market that are most in need of housing. Social housing units that really do help the desperately poor would cost a lot more per unit. Just to put this figure of $174.9 million into context, the entire operating budget for Guelph in 2018 is $233 million.   

I think that the magnitude of the housing problem really needs to be understood. The federal government recently created a "National Housing Strategy" that commits to spending $40 billion over ten years. This sounds like an astronomical amount of money, but the casual reader needs to remember a couple things. First, this only comes down to $4 billion per year. Secondly, this is for the entire country. Think of it this way, Guelph only has a population of 131,900 people. Canada has 36.29 million. This means that Guelph has only .3635% of the population of the entire country. That means that proportionally the federal government has committed to providing $14.54 million to Guelph. This is nowhere near enough money to effectively deal with the crisis we are currently facing. And don't forget that Guelph's population is growing rapidly and it's stock of existing, low-cost housing is shrinking because of gentrification. 

We also have to admit to ourselves that social programs---like creating and maintaining social housing---is always going to be treated like a political football. That means that programs will be "spun" to look bigger than they actually are, and, cancelled for totally capricious reasons. To cite a couple specific examples, consider the fact that the federal Liberal party announced that their funding was "$40 billion over ten years" and that $500 million dollars was set aside in the provincial Climate Action Plan to maintain and upgrade social housing in Ontario. Trudeau's government has no way of knowing what will happen to their government after the next election---let alone in ten years. And our dear, beloved new Premier just ripped up the cap-and-trade agreement that was funding the Climate Action Plan---which means no money for social housing buildings to replace worn-out heating systems.  

I've discussed social housing in some detail because I've had local politicians tell me that the real solution to the housing crisis is to get the federal and provincial governments to build more social housing. But when I began to understand the scale of the problem, it seemed to me to be total moonshine to think that the electorate will let politicians of any stripe make that size of social investment. It might actually be true that this would be the best way to do things (see the example of Vienna I raised in my last article), but it just doesn't seem politically feasible in Canada. Moreover, social housing has historically seemed to be easy to cut when voters are more concerned about taxes than they are about homelessness. Once you accept this unpleasant truth, the interested citizen is left with the question "well, what exactly are we supposed to do?"

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I'm not about to suggest that the federal government shouldn't be building new social housing. But we need to see social housing as a last resort instead of the be all and end all. Government simply lacks the financial resources that would be needed for the task at hand. The only answer that I can think of to solve the mess we are in is to bring in private developers. Whether individual readers agree with capitalism or not, the fact of the matter is that Canada is a social democracy. And that, fundamentally, is based on the idea that we allow private business people to run huge swaths of the economy. But it isn't a libertarian utopia---we believe that democratically-elected governments should step in and nudge businesses in directions that serve the public good. That's why we have inspectors to ensure that butchers don't sell people contaminated meat. It's also why we have public planners who force developers to build housing that doesn't immediately degenerate into slums. But somewhere in the planning process the idea that zoning should ensure that there is an adequate supply of housing for everyone has been forgotten.

As I have pointed out in various articles, there are a variety of ways in which our zoning seems designed to make housing not affordable. We pass zoning bylaws that mandate far too much required parking---which mean that it is illegal to build walkable "down towns" with apartments over the top of stores. It also means that the driveways for houses cannot be widened to provide parking for basement apartments---and that owners who lack the extra parking can't even rent to people without cars. For years the OMB ruled that any type of increased density was illegal in any area where people lived in individual houses---so as to "protect the neighbourhood character".  We have rules against building towers any higher than an arbitrary limit "to preserve the sight line". We mandate what seems to be a very large amount of parkland (one hectare---the size of a football field) per 1,000 residents (about 300 apartments.) We have regulations to prevent sprawl in order to prevent encroachment on farmland and water recharge areas.  The last of these regulations is important and should be preserved, but the others should be relaxed in order to let developers increase the housing stock at least to the point where everyone has a place to live that they can afford.

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There is an important real estate concept that I came across while reading a Parliamentary Research Paper on the history of social housing in Canada: "filtering".  This is the idea that when a building gets to a certain age the rents it charges tend to decline. I'd never come across this term before, and further research told me that housing policy rarely considers it's impact on affordability. But once I understood the concept, I immediately understood its importance. When I was a student and afterwards when I was working at crappy janitorial jobs I lived in nothing else than old, cheap apartment buildings or run-down shared houses. Guelph used to be filled with them. But when I think about where I lived then, every single one of those buildings has been renovated and "gentrified". Indeed, my current home is an old, middle-class home that had gone through a "filtering" process over 100 years. First it was duplexed in the 1950s, then it ended up a run-down boarding house for students before I bought it. Over twenty years I fixed it up and is now worth a great deal of money. This is "gentrification" and that's a concept that everyone understands. What they don't is that filtering and gentrification are the opposite ends of a housing continuum. When there is an adequate, optimal, or, surplus supply, housing for the poor is created by filtering. When there is an inadequate supply of housing, what little does exist gets removed by gentrification. Filtering has ceased in Guelph and gentrification has dramatically cut the supply of housing for the poor. The solution to this change is not to chastise people for fixing up old houses and apartment buildings, but to instead increase the supply of new houses to the point where there isn't so much competition that filtering gets totally eliminated.

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According to an article by Christopher Chung in The Tyee, Vancouver politicians are beginning to seriously consider tackling that city's housing crisis by changing the zoning policies across the entire city---including the hitherto sacrosanct areas that consist exclusively of single family houses. As he reports

Independent mayoral candidate Shauna Sylvester is also for zoning reform. Yesterday, she tweeted points from her housing platform: “Instead of just stacking people along big, busy streets and arterials or building condo towers at busy centres, I want to create opportunities for human-scaled homes in real neighbourhoods.”

Doesn't the line "stacking people along big, busy streets and arterials or building condo towers at busy centres" sound familiar? If it does, it's because that is exactly what is being done in Guelph. The downtown and the Gordon Street bus line seems to be the only place in the city where developers are allowed to really pull out all the stops and build a lot of intensive housing.

According to Chung this idea isn't just something being put forward by fringe candidates, either:

Outgoing Mayor Gregor Robertson wants staff to go farther and look into the possibility of allowing “triplexes, quadplexes and other multi-unit forms to significantly bring down the purchase cost per unit of housing in low-density neighbourhoods.”

Indeed, I listened to a Vox "The Weeds" podcast on this subject this summer and it seems that the core problem with housing just about everywhere is not that there isn't enough housing being built in the poor parts of town, but rather that most of the land belongs to the more well-off and they don't want any new housing built in their neighbourhoods. (Unfortunately, I don't seem to be able to add a link to the episode due to a compatibility problem between Linux and the Apple universe. If you want to see if you can get it to work, the episode is titled "We're Not Going to Pay Rent" and was originally aired on August 17th, 2018.) And when you look at the rules that Guelph has governing zoning, it is very hard not to believe that ultimately this is what underlies a lot of it---the people who already own houses simply do not want to be even slightly discomforted in order to provide housing for other people. Indeed, at a recent municipal breakfast meeting I had this attitude starkly presented to me. A fellow baby-boomer told me that he wants the value of his house to go up and up forever because that's money in his bank. When I suggested that we need to think about other people, he said "I own my own home, and so do my children. I don't care about my grandchildren, and I certainly don't care about anyone else's. I did OK and they can find their own way." 

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I will let that statement speak for itself. Thus ends my series on housing in Guelph. My next article will be on a very different subject. 

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And now a word from a poorly paid, yet hard-working writer---.

For many years I was quite bitter about the quality of journalism I was reading. For example, I would get angry when a reporter just repeated a figure from a politician instead of attempting to describe it as a percentage so the reader could put it into a context. I'd say to myself "why couldn't that guy to a little bit of research to figure out whether or not this is a substantial issue or just more empty spin?" Writing this blog has given me some insight into this. Research takes a LOT more time than simply showing up, asking a few questions, and, editing the response into a story. 

I have also learned to respect those reporters. By hammering out those little stories they were recording the history of the community. Now that they are gone we aren't creating a record of the city for future generations. Some future version of myself will not be able to go to the public library and wade through volume after volume of copies of the old "Guelph Mercury" to learn in detail what was happening in the city back in the early 21st century. That really is a tragedy. We do have a group of people trying to fill the gap---guys like Adam Donaldson and myself. But we need community support if we are going to make this business model work. Nothing that requires this level of effort can be sustained unless people get paid to do it. (And certainly, unless some more money comes down the pipeline, everything we do is just one computer crash away from disappearing forever.) 

I get new supporters as I publish new articles. (Thanks to Stephanie, Ralph, and, Nina for being so awesome!)  But I need to keep reminding folks to support the Back-Grounder. As little as a dollar a month helps---if lots of people do it. You can use the Patreon button at the upper right side to set up a regular subscription and there is also a "tip jar" for one-time contributions.  Even if you can't afford to help financially, it really helps if you spread the word through your favourite social media. My last article went viral, and that works wonders for subscriptions. 

The High Cost of Free Parking in Guelph

Executive Summary:

One of the forces that is most influential in creating low-density, carbon-intensive, and, extremely expensive cities to live in are parking regulations. Unfortunately, their pernicious influences are pretty much invisible to most voters. This article shows how regulations hidden within Guelph's planning regulations add tens of thousands of dollars to the cost of condominiums, raise rents significantly, prevent the creation of walkable urban neighbourhoods, and, ruin public transit. 

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 The High Cost of Free Parking in Guelph

"The right to have access to every building in the city by private motorcar, in an age when everyone possess such a vehicle, is actually the right to destroy the city",  Lewis Mumford 

Lewis Mumford
Primitivojumento,
 Wiki Commons

During my Quixotic attempt to run for Guelph Council, I found that the one issue guaranteed to generate the most phone calls was parking. People get absolutely enraged when they receive a parking ticket. And no more vicious and brutal animosity seems to be created than a battle between two neighbours over a parking spot. Since I've never actually owned a automobile (although I had two motorcycles and a moped), I've always found this emotional commitment hard to understand.

After working through parts of Donald Shoup's encyclopedic The High Cost of Free Parking, I think that I am starting to "get" parking.  The key issue is the assumption that anyone who has made the investment of buying a car believes that they automatically gain the right to free parking for as long as they own it.

It's easy to see how this idea came to be. At first, cars were just something that rich people had. And this meant that there was plenty of space at the side of the road for them to park. And since rich folks tend to live on large properties, there is generally a place for them to store their cars. The problem with parking only started when cars became very popular.

When middle-class people started to own autos, a new business was created in large cities---commercial parking garages. These places stored your car when you weren't using it. They came about because existing apartment buildings---being built in the pre-automotive era---didn't have parking spaces provided for tenants. In fact, if you watch old movies you will often hear dialogue or plot devices that hinge around the fact that a person has rented a space in another building to store

Donald Shoup by his permission

their car. When these middle-class folks went downtown, they found that most businesses didn't have parking either. This meant that they either parked at the curb---if they could find a space---or paid a fee to park in a private, for-profit, parking lot. Since there was no guarantee that they will find a space at the curb, or a lot near where they were going, they often decided to just take a cab or public transit. People didn't hop in their cars to go downtown, because parking was often too much of a hassle, so cars were not only less commonly owned, they were used less often.

Enter the planning departments of all North American cities. They decided that if lots of people were going to drive cars, then there had to be places for people to park them. This wouldn't have been much of a problem if drivers had been forced to pay the actual cost of parking. This would have meant that a few more privately-developed, paid parking garages and open-air lots would have been built.

Unfortunately, what happened instead was that planning departments all across North America decided to force every single new building to provide free parking for the people who rented apartments, bought condos, went to the library, worked at an office tower, ate at their restaurants, or, shopped at stores. For a variety of reasons, this has proved a disaster for cities.

All this parking dramatically increased the cost of building a new structure. When someone decides to build an apartment building, for example, they have to build not only the apartments, but also the parking that goes with it. If the apartment complex is built in an area with cheap land, then the parking can go outside the building on a basic lot. But it also means that the developer has to purchase a much bigger lot. There are other costs too, such as snow removal in the winter. All of these costs are passed on to the person who rents an apartment. This means that the parking isn't "free"---it's just a hidden cost that everyone has to pay, whether they drive or not.

Now consider a situation where planning doesn't force developers to provide "free" parking. As I mentioned before, this situation used to exist in apartment buildings that were built before the rise of the automobile. In this situation, a person who decides to live in this apartment complex and also decides to purchase an auto will be forced to find a garage or lot to park his vehicle and pay a monthly fee to do so. This also means that anyone who lives in that apartment building and who doesn't choose to own a car no longer has to subsidize the guy who does.

There is another, very important element to this issue. If a developer doesn't have to provide parking for his customers, he can dramatically shrink the size of the lot that he has to purchase. This means that it will be easier to do "in fill" development. It also means that the density of the community will rise. This will mean that the city can save money on servicing the properties. It will also increase the viability of public transit, which will lower the need to own a car in the first place. With more density, there will be more places that a renter can walk to to shop, work, or, socialize. And with more viable transit, there will be more frequent buses, which will make that option more convenient too.

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It is hard to define the cost of a generic parking spot. This is because a large part of the cost comes down to the cost of the land---which not only varies widely from city to city, but also from

neighbourhood to neighbourhood. Also, in parking structures the cost per unit is going to change based on the size of garage---simply because of the economies of scale. But Donald Shoup has come up with an approximation that will helpfully give us an "order of magnitude" to understand this issue. (All that follows comes from Chapter 6 of The High Cost of Free Parking, "The Cost of Required Parking Spaces".)

Shoup analyzed fifteen parking structures that were added to the University of California, Los Angelos (UCLA) between 1961 and 2002. He reasoned that he could ignore the land cost element of the price by calculating the number of cars that could be parked just on the footprint of the land that the building sat on, and subtracting that from the total number that could be parked in the finished structure. That net result would divided into the cost of the building (less the land acquisition price) would be the real cost of each parking spot. He then factored in inflation to come up with a price per car based on standard 2002 dollars. Since parking structures are pretty much the same in Ontario as in California, this will give us a number that is probably the same here.

In Shoup's analysis, above ground parking at UCLA came to $14,500/added space, in 2002 US dollars. Using inflation and currency converters from the Internet, this converts to $19,400 in 2016 US dollars, and $25,400 current Canadian dollars per parking spot.

One complexity that needs to be understood is that above ground parking is a lot cheaper than below ground parking. But in very dense areas developers often put below ground parking into their condominium and apartment developments, so it is very important to separate these two costs. Shoup parses out this number by looking at five different below ground parking structures and came to the following number of $25,800 US in 1998. This converts to $38,100 US in 2016 and $49,900 current Canadian dollars, per unit of underground parking.

Of course these numbers are probably a bit off one way or another. But I suspect that they do give a rough idea of how much the cost of parking adds to every building.

Now, let's look at the Guelph planning regulations vis-a-vis new apartment and condominium construction. According to the General Provisions of the Guelph Zoning Bylaws, Section 4.13, the minimum required parking spaces per unit are 1.5 for the first 20 units, and after that, it is 1.25 per unit. Since I cannot see any separate listing for condominiums, I will assume that the same rules apply. This would suggest that a condo tower or apartment with seventy-five units would require 99 parking spaces (that is 20 times 1.5, or, 30, plus 55 times 1.25, or, 68.75 or 69. 30 plus 69 equals 99.) Since space is at a premium in downtown Guelph, if they go there, these towers would have to build parking garages. At this point, by plugging in Shoup's numbers I can calculate that if they are above ground the parking spaces would cost $2,514,600 and would add $33,500 to the price of each condo or apartment. If the developer has to do below ground parking, the total cost would be $4,940,000 or $65,900 per unit.

Seeing those numbers explains to me at least part of the reason why condos cost so much!  It also probably has something to say about rents.

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These regulations raise the costs not only for housing, but also for businesses. And office building (like the Co-Operator's) requires one space for 33 square meters of "Gross Floor Area" (GFA), 16.5 square meters in a retail establishment, 7.5 square metres in a restaurant or tavern (think the Albion), and, 9 square metres in a take-out restaurant (think MacDonalds.)  It also says that Hotels have to provide a space per room plus one per 10 square metres of space open to the public (I assume things like restaurants and bars.) It also says that if a developer wants to build an apartment over top of a business (like most old downtowns), each unit must provide an off-street parking space per unit---in addition to the spaces it must provide for the business (see  4.15.2.4.)

I won't try to come up with estimates of how much these spaces cost, because that would involve an analysis of land costs in Guelph, which varies from neighbourhood to neighbourhood. The zoning regulations do set out in great detail---depending on area---the minimum size of a parking space (from 3 metres by 6 metres, to, 2.5 by 5.5.) They also prescribe "set backs" plus rules governing access to each spot, which add space requirements. Also, above a certain size of lot, a certain number of handicap spaces need to be offered.

To put this into a context, the old downtown Budd's building is currently listed as on offer for leasing as office space, with 16,606 square feet.  This converts to 149 square metres, which would require 5 parking spaces (the zoning regulations say that partial numbers are always rounded up to the next whole parking spot.) If Budd's were being newly build as a retail space, it would be required to provide 10 parking spaces. What this means is that if you want to build a new store like Budd's, you would have to provide a parking space that would be at least 180 metres square. But that number doesn't include required set-backs and access lanes, which might add as much as one third more to the size of the lot, making the ultimate size about 240 metres square.

In it's present configuration, the Budd's building has a basement. If a developer was going to build a new structure like it, he would be purchasing much cheaper land outside of the downtown core, which means that he probably wouldn't be building basement space into it, as this is only done when land costs go above a certain amount. So I'd suggest that probably this new store would probably only be two stories at most, which means that a 149 square metre store would probably end up having a footprint of 75 square metres at the very least. It would be fair to say, therefore, that the parking regulations would result in the developer having to assemble a lot that is at least 255 square metres, or, 2744.8 square feet. This is also how parking regulations dramatically lower the density of cities.

As a result of these parking regulations, it is effectively against the law for anyone to build a store like the old Budds, Ackers, and, other downtown businesses. The only way they were able to survive as long as they did was because they had been "grandfathered" as legal, non-conforming. If anyone wonders why we have big, sprawling cities that are too low density to have a proper public transit system, the answer is simply that it is against the law to build them any other way. The laws that force businesses to do this all come down to parking.

The old Budds store. It would be totally illegal to build something like this today.
Photo by Bill Hulet

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If we are ever going to build the sort of higher-density, sustainable cities we are going to have to stop forcing all developers from having to devote enormous amounts of resources to providing off-street parking. The fundamental problem is a misallocation of resources. People who do not own a car, and have no interest in ever owning one have to pay as much as $74,000 extra on their condo unit simply because our zoning assumes that everyone will own a car. The fact that most people who buy condos in the downtown do so specifically because they don't want to have to drive everywhere is completely lost on these regulations.

Of course, there are going to be people who really do want to own car and have a parking space in their building. But the way to deal with this problem is to let the people who want to drive cars PAY for the privilege instead of forcing everyone who doesn't to subsidize their lifestyle choice. Developers will learn how many units that they actually need in a building.  If they build too few, they will suffer. If they build too many, then they will get "stuck" with spaces that they will have to rent to outsiders. Some business people might see an opportunity and build parking garages outside of condominiums in cheaper parts of town for the people who will be happy to use transit for commuting and just drive on special occasions.

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The obvious response to the above suggestion is that people will drive cars without paying for a parking space and businesses will have customers with no place to park. The result will be total chaos. The essential answer to this problem is to allow the marketplace to set the price.

The best way to understand this point is to consider the lowly parking meter. The first thing to

Let this light your Way!
Lorax, Wiki Commons

realize is that parking meters are not about raising money. Instead, their job is to ensure that people who really want to park on the curb will be able to find a spot. Consider the number of parking spaces that would be free in downtown Guelph if parking were totally free. The fact is that the folks who work downtown would park their cars on the curb and the "lot" would be full all day long. The other option to consider is what the curb parking would look like if the meters charged $20/hour---there'd be no problem at all finding a place to park. The issue is to figure out what to charge to find the "sweet spot" where there are always going to be spots available, but you aren't chasing away everyone who really does want a place to park.

Traffic engineers have done studies and found out that there actually is an optimal amount of curb parking usage. According to Shoup, they suggest that one in seven spaces (15%) should be free at any given moment. This amount is probably going to be high enough during peak times of the day to ensure that if someone wants to park their car for extended periods of time---like an entire eight hour shift---they won't be willing to pay that much money. As a result, they will seek out lower cost alternatives, like either taking transit, car-pooling, or, finding a lot with lower charges.

There will be "hardy folks" who will attempt to bypass the free market by parking at the curb in surrounding residential streets. There are ways to discourage this behaviour too. Locals who live in the area could be issued passes that allow them and visitors to park at the curb. Anyone without a pass on their dashboard would be subject to fines. What if someone decides to rent out or sell their pass? No problem! The amount that they charge the person parking is itself part of the marketplace. The only thing that the city might want to do is to take steps to prevent counterfeit parking passes and to publish a "going rate" for passes to ensure that people charge enough to ensure that same 15% turnover that will ensure that there are still spaces when the locals need to put their car on the curb. (Presumably this will be significantly less than the downtown rate because of the inconvenience of having to walk downtown after parking.)

If you really want to get fancy, the meters could all be controlled electronically to allow the city to charge different rates at different times of day. Obviously there are going to be "busy" and "slow" times. The rates needed to keep 15% of the spaces open will be different at different times. There may be variation from one day of the week to another, and perhaps from one season to another.

Hi-tech parking meter!
Wiki Commons

"Smart" meters would be able to keep track of all that information and help parking departments keep up with change. They could also be linked to cell phone apps that would help motorists find the spaces that are open and pay for the time that they wish to park.  

The important issue is that people who drive cars would begin to start understanding the real cost of having to provide parking for their vehicle. The flip side is that anyone building apartments, condos, burger joints, or, dress shops would no longer have to create parking spaces that people may or may not want to use. At first, this probably wouldn't make much difference, as most businesses would be afraid of losing customers who couldn't find a place to park. But eventually some plucky pioneers would decide that the savings in cost would be worth the risk. They might even put some apartments over top of the store to augment the income from commercial renters. Some business people might decide that they want to live upstairs from their business.

The first places where this might happen would probably be at spots where there is a lot of public transit. Some place on the Gordon street transit corridor would be a good spot, perhaps. There would probably have to be some sort of direction from City Hall. Perhaps a consortium of business people could plan a new secondary "downtown" for the city where the goal is a walkable neighbourhood. It could be specifically aimed at that fraction of the population that really doesn't care to own a car. This might be a mixture of those young "hipsters" who aren't interested in cars and older "boomers" who are retired and don't want the hassle anymore.

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One thing that probably is going to make this transition happen even faster is the rise of both Uber and self-driving cars. The government of the USA is "fast tracking" the introduction of self-driving cars, this means that they are probably going to quickly become part of the landscape here in Canada. And this is going to mean a great deal to parking. When they become an accepted part of society, a lot of people are going to have apps on their phones that will allow them to call for a self-driving car that will pick them up and take them wherever they want to go. This means that they really have no reason at all to own or park their own car. This means that there will no longer be as many people who need a parking space where they live or work. It also means that when they go shopping instead of parking a car, they will just get let off and call for another one when they are finished. In the interim, the cars will be off driving other customers around instead of sitting in a parking space gathering dust.

This won't be much different from calling a cab, but they will be cheaper. This is because they will have all the same upfront expenses but without having to pay for a driver. Since running your own car costs something like $10,000 a year in Canada, increasing numbers of people are going to start asking "why do I have to pay all this money, plus grotesquely-subsidize parking fees in the price of everything I buy, when I can just take transit or push an app on my phone to get a car?"

A Google self-driving car---the final nail in the coffin for subsidized parking?
Steve Jurvetson from the Wiki Commons

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This issue of where parking is going is tremendously important for Guelph's future. Right now the city is developing a parking master plan for the future of the downtown. As the city website says:

Through the Places to Grow Act the Province of Ontario requires increased population density for communities including downtown Guelph. As well, over the next 16 years the number of people who work and live downtown will double from 8,000 to about 16,000 people and jobs and as a result there is a need to plan to have sufficient parking for people living, working and visiting downtown.

Public parking infrastructure downtown has not increased since 1983 when Guelph had a population of 70,000 and as a result, on-street parking and parking lots in the downtown core are at capacity. To accommodate downtown population and employment growth targets, an additional 1,300 to 1,700 parking spaces are needed by 2031. These new parking spaces will be created by replacing downtown parking lots with a series of parkades, starting with 350 new stalls (anticipated to be the Wilson Street parking lot) and followed by 250 new stalls (anticipated to be the Neeve Street parking lot).

I am assuming that these 1300 new parking spaces will be in above ground structures, which means that according to Stroup's numbers ($25,400 per space), the cost of building them will be about over $33 million dollars. Now, Stroup has worked through a mechanism for estimating how much money drivers need to pony up to pay for each space. I will try to work through his reasoning as follows.

The first cost is that of paying for building the structure. Stroup assumes that this can be done over 40 years. Let's assume that the city can get the money at 3% for 40 years. I Googled an amortization calculator and plugged in the numbers. At 3% over 40 years, the total capital cost is $56,705,000 (capital plus interest.) This translates into a monthly cost of $118,000. Divide that into 1300 spaces, and each parking space will have to create an average of $91 of revenue a month---just to pay the capital costs. Stroup's analysis of UCLA's parking budget says that it spends a further $33/month on maintenance, administration, and so on. These are 2002 US dollars, which convert to $58 in 2016 Canadian dollars. Add them together and it should cost about $149/month.

OK, not every space is going to be taken up by a monthly pass. Some of them will be rented to shoppers. If a space has to generate $150 of revenue a month, that only means it has to generate $5 a day. That should be relatively easy, shouldn't it?

Well, yes and no. Consider the fact that the lot is not going to be full up most days. Let's be really optimistic and assume that on peak days it will only have 10% excess capacity on any day. That means that only 1170 spaces will be in use. Divide $118,000 by 1,170 and you get $101 a month. But, you don't have to add $58 in maintenance to this number, but instead a larger number---because maintenance is a fixed cost, just like capital. This means that the cost per filled parking space has just gone up to $64 per space. That means that at 90% occupancy, the cost per customer comes to $165 per month.

OK, not every space is going to be taken up by a monthly pass. Some of them will be rented to shoppers. If a space has to generate $150 of revenue a month, that only means it has to generate $5 a day. That should be relatively easy, shouldn't it?

Well, yes and no. Don't forget that parking is something that fluctuates dramatically from day to day. Lots are often empty on specific days of the week, such as Sundays. They also empty out on holidays---such as Christmas. Let's assume that the lot downtown will not be used at all on four Sundays plus one holiday a month. That means that we can only count on 25 days a month when we can generate revenue from casual drivers as opposed to people with monthly passes. That means that the space has to generate $6 a day. Not a huge increase.

If you look at what a monthly pass for parking downtown currently costs, you can see that the biggest charge is only $92 and the cheapest is $40.  Hourly parking in the lots is $2 for a ten hour period, Monday to Friday, with a flat fee of $2 on Saturdays and $5 for special events. Sundays are free.

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The problem with all of Guelph's downtown parking plan is that it assumes that the future is going to be just like the past. And the one thing that I feel confident saying about the future is that just isn't going to be the same as what people are used to. Climate change means that we are going to have to transition to a carbon free economy in a very short part of time. I suspect that there are going to still be personal transportation devices (probably electric)---but there probably going to be a lot fewer of them. And a lot of them are probably going to be more like self-driving, taxis than personally-owned automobiles. Mainly, I suspect that there is going to be a lot more public transit in use. The fact that GO transit is expanding, a high-speed train for the Windsor to Quebec City corridor has been promised, and, Kitchener-Waterloo will soon have light rail all suggest to me that the number of people using cars will be declining in the near future.

Even more to the point, the transition to this new reality is not going to happen everywhere at the same time. I dare say that this new way of living is going to happen in downtown Guelph before just about anywhere else in the city or the province. People move to Guelph to be on the cutting edge of environmental issues, and the people who do that usually want to move downtown if they can.  What this means to me is that if we "get it wrong", the city will be wasting many millions of dollars on parking garages that will spend a large part of their life empty. This would again---as with so many things parking related---a profound misallocation of resources.

I would suggest, in contrast, that---in at least the downtown core---the city should rip up the off-street parking regulations and let the free market decide. Apartments, condos, and, commercial buildings will be a lot cheaper if developers don't have to provide parking spaces for people---whether they want them or not. If it turns out that I am wrong and there remains a tremendous need for downtown parking, let some business person step in and build a private parking garage where he can charge the real cost. Just stop trying to force me to pay for someone else's right to destroy the planet with with their gas-guzzling, climate changing, death wagon.  ;-)