The ongoing dispute over Winnipeg's decision to charge developers fees on new developments has revealed another source of tension in the conflict, says the president of the Manitoba Home Builders' Association (MHBA) — between the City of Winnipeg's planners and its finance department.
"The fees bylaw was taken out of the hands of planning and given to finance in order to generate revenue for the city," says MHBA president Mike Moore.
In October 2016, Winnipeg City Council passed a bylaw that allows it to charge developers fees in some areas of the city starting on May 1, 2017.
The city says it intends to use the revenue from the fees to pay for growth-related infrastructure.
Moore says Winnipeg has a poor record of developing long-term plans and sticking to them.
Other Canadian cities typically use growth fees to stimulate higher-density development and discourage sprawl, rather than to generate revenue.
"Planning needs to become more important in Winnipeg," he says. "The city needs to develop a plan for growth and for transportation. Developers want a plan-based, cost-sharing approach to the fees, shared by the city, the developer and the owner."
The MHBA and the Urban Development Institute filed a challenge to the bylaw in January 2017.
Moore says the developers expect a judgement some time in the fall of 2017.
In the meantime, fees the city collects will go into a reserve account. If the city loses the case, it will give the money back to the developers.
Planning and finance aren't in conflict in most cities, says a Calgary planner.
"But there is often tension between them," says Harry Harker, president of 1st Principles Planning Inc. "I've seen the same symptoms of discord in B.C. and Alberta."
In Canada, municipalities are creatures of their respective provinces.
"And provincial governments don't always hear the concerns of the cities over the voices of developers, who, naturally, don't want to pay development charges," Harker says.
In some provinces there are too many restrictions on what a city can charge for.
"Too often there's a 1950s perspective on municipal legislation," he says.
"Provincial legislation should allow for cities to charge development fees. As shown by the controversy in Winnipeg, the Manitoba legislation seems to be ambiguous."
Harker says contractors can get caught in the cross-fire between developers and government.
"Disagreements over impact fees means projects get slowed down and time is money," he says. "Things are tight right now in Alberta and contractors are looking for work."
The solution to a conflict between municipalities and developers like the one in Winnipeg is to change a province's municipal act.
"On average, a municipal act is changed every 20 years or so," he says. "That seems like a long time, but nobody wants the legislation to be changed on a whim. Alberta is in the process of making changes to its legislation right now."
A Vancouver planner says the key to better relations between a municipality's planning and finance departments is to align their respective corporate cultures.
"Where city hall culture is good, where administration and planning are aligned, they have a common definition of success of fostering the growth of a great city," says Brent Toderian, principal of Toderian UrbanWorks.
"Finance and planning need to team up and figure out how to make a city grow smartly."
Toderian says more cities are realizing there are costs to growth, depending on the type, nature and location of that growth.
"Some growth pays for itself, such as infill, and some doesn't, such as suburban sprawl," he says.
Winnipeg appears to be behind other cities in respect to development fees.
"Most cities in Canada have development charges that pay for at least part of the city's growth and that are not earmarked for general revenues," he says.
Internal City Hall conflicts notwithstanding, the source of the disagreement between developers and the city is a disconnect around the process, says a Winnipeg planner.
"There was no proper consultation process in the lead up to the bylaw," says Michelle Richard, principal and partner with Richard Wintrup and Associates Limited. "The developers wanted a stake in the game, but there has been no clear and common understanding about who's paying for what."
There was not a lot of time spent by the city on trying to understand the local market and what the impact of growth fees would be, how they would affect the market and who would bear what burdens, she says.
"A lot of uncertainty has been created all around," Richard says.