Urban Renaissance Institute

Lawrence Solomon
National Post
August 14, 2003

Homeowners worry about their homes’ property value, and how their neighbours affect it. The boors nearby (the word “neighbour” was formed by combining “nigh” and “boor”) do material harm: By failing to mow their lawns or paint their peeling shutters, they make the neighbourhood unsightly, lowering property values for all.

But the yuppies and social climbers nearby can be even worse. By turning tidy lawns into intensively landscaped gardens or super-sizing cottages into monster homes, they inflate property values, leading the local assessor to increase the value of all nearby properties. Taxes rise for those who did nothing to encourage it and who wanted nothing more than their world to stand still.

Homeowners also worry about how neighbouring businesses affect their property values. Civic-minded neighbours cheer on local merchants serving the community with bakeries, hardware stores and green-groceries that give the neighbourhood its distinctive qualities; they sneer at the Wal-Marts that undermine local businesses by luring their customers away. Meanwhile, the same homeowners lobby their politicians to prevent the shoppers patronizing the local establishments from parking along local side streets, and they’ll fight to the death to prevent any development that will increase the number of residents – additional customers, to the merchants – in the neighbourhood. They’ll also fight a merchant who wants an addition to his store, or a restaurant that applies for permission to operate a sidewalk café. When beleaguered merchants, unable to make a living, relocate or close up shop, the homeowners will decry the abstract forces that have harmed their neighbourhood – the Wal-Marts, the politicians, the planners, the greed of neighbours who prefer a better price at a big box store to the cheerful, personal service at the neighbourhood establishment. The homeowners’ own role – often the decisive role in harming the neighbourhood – never so much as enters their consciousness.

In large part, homeowners oppose new developments due to the pressure they put on neighbourhood parking – access to parking directly influences a property’s value as well as a homeowner’s comfort. Yet homeowners balk at paying market rates for street parking, let alone for their front yard parking pads on city property – they even resent the token payments cities charge residents for neighbourhood parking permits. A public resource should not be rationed by price, homeowners say, simultaneously acting to bar the general public from having access to this public resource. Because street parking is underpriced, it’s overused. If street parking were priced fairly, it would not be scarce – there would be enough to go around for residents, their guests, their tradesmen, and shoppers who patronize neighbourhood shops.

Instead of lobbying government to use existing parking spots more intelligently, homeowners have done the opposite – they have lobbied governments to add to the parking supply. As a result, builders of residential towers and office complexes alike have been forced to install far more parking spots than their residents would ever need. To defray the cost, the building operators then made the glut of parking space commercially available to the general public, depressing the value of parking lots and thus the cost of parking, and artificially encouraging the use of automobiles by those shopping or working in the vicinity.

The fervour of homeowners in insisting that parking always be available extends to their own neighbours’ use of their own property. Typically, new houses must provide their own parking, even if located near a subway station. Woe to the homeowner who plans to tear down an existing garage and replace it with a garden or something else unfriendly to cars.

All the while that neighbourhood residents fight for more parking, they fight against more cars in their neighbourhood – cars are a health and safety hazard, the smelly fumes are obnoxious, and the neighbourhood, they claim, already suffers from too much asphalt and too little greenery. To make life unpleasant for intruders, residents agitate their local government to put in speed bumps, to narrow roads at intersections, to add four-way stop signs and other obstructions. Visitors to our home in downtown Toronto often take two or three runs at turning on to our street – at certain hours the traffic signs seem to bar entry from all directions – before making an illegal turn in exasperation. For a similar reason, visitors to my organization’s office building, in another downtown neighbourhood, often need five to 10 minutes to travel the last block. For such reasons, half the cars apparently cruising neighbourhood roads are in reality aimlessly circling their destination, needlessly slowing down and speeding up at speed bumps, and needlessly spewing gasoline fumes into the neighbourhood. Regulations designed to limit fumes instead cause excess pollution.

Perhaps we shouldn’t blame neighbours entirely. For one thing, governments that try to charge a fair price for parking are too quick to back off if opposed. For another, governments set neighbour against neighbour through property tax mechanisms such as current value assessment, which makes the local taxes payable dependent upon a house’s market value. This system of taxation necessarily punishes those who landscape their homes, and keep them in good repair, as if being house-proud was to be discouraged. At the same time, the tax system rewards slovenly habits, urban decay and neighbourhood apathy by lowering taxes of ill-kept districts.

A local tax system based on user pay, rather than market value, would allow people to upgrade their homes without affecting the taxes of their neighbours, and it would solve all parking problems. Frictions that undermine relations among neighbours would ease. But user pay systems would also diminish subsidies from one homeowner to another, leading to upset among neighbours who relish benefits at their neighbours’ expense.

The original meaning of neighbour – the boor nearby – was not derogatory. Boor was then a nice word – a dweller, often a simple, good-hearted fellow. Only with time did “the boor” come to have an unpleasant connotation. “The neighbour,” if not careful, may meet the same fate.

Related articles:
Plumb crazy
Rent control’s wreckage
Homeless by decree
Homeless in paradise
Parasites in the walls
Widening the gap

Lawrence Solomon, a former vice-chair of the City of Toronto’s planning board, is executive director of Urban Renaissance Institute. www.Urban.probeinternational.org, E-mail: LawrenceSolomon@nextcity.com.

Lawrence Solomon
National Post
August 7, 2003

How much did your toilet bowl cost you in water yesterday? Or your kids’ bathroom sink? Or your kitchen dishwashing machine? The consumption of water appliances – and how much each contributes to the monthly water and heating bill – is now tracked by individual wireless meters and displayed online for tenants in a growing number of apartment buildings, condos, coops and other multi-family complexes south of the border.

“We’ve installed 88,000 wireless water meters in 11,000 units to date, and we have a backlog of 7,500 units to go” says Brian Brittsan, president of California-based Wellspring International, a company whose business is growing by 2,000 to 3,000 units per month.

Wellspring’s 11,000 units represent just a drop in the bucket of a burgeoning North American market worth an estimated US$17-billion. Between two million and three million apartment renters in the United States already pay separately for their water, according to Chicago-based National Submetering and Utility Allocation Association, an organization representing property owners, meter manufacturers and installers of meters that track consumption in individual units.

Five years ago, billing tenants for their individual water consumption was all-but-unknown. Today, multi-family buildings have gone plumb crazy, with upward of 400,000 additional units sporting water meters each year. New buildings are now being designed for metering and old ones are being retrofitted. With metering, conservation climbs, too – metered buildings consume 18% to 36% less water than those that don’t charge tenants for their actual use. And landlords benefit by removing water – commonly their largest variable expense – from their books, often with no capital outlay: Many metering companies install the meters at their own expense, then keep the savings over the first 18 months or so in payment.

As impressive as this industry’s rise has been, its advance has been limited because the plumbing in one type of building stock – existing high-rises – typically took routes that didn’t allow individual units to be metered. Wellspring overcomes this obstacle by placing wireless meters at every point of use within a unit and summing the consumption at each water appliance to determine the unit’s total water usage. As a bonus, the appliance-specific data allows residents to catch hidden leaks as well as slow running toilets and dripping taps, giving them unprecedented control over their water bill.

The water metering industry has been strongest where water is scarce and water prices are highest, such as the water-short Sun Belt. Florida, to remove regulatory impediments to metering, has changed regulations that forced metered building owners to comply with rules desugned to apply to “public water suppliers.” The federal government and other state governments are also sensibly adapting to metering innovations and revising rules that prevent a free water market from developing. But Canada has so far failed to catch the wave, even though companies such as Wellspring rank Toronto as #2 in North America’s multi-family market, after New York. For one thing, Canada’s low water prices – only undeveloped countries still charge less – discourage investments in conservation. For another, the immense Toronto rental market suffers from rent control, which complicates life for building owners interested in improving their property.

Change, however, will come soon enough. In the wake of the deaths at Walkerton, the public has learned that Canada’s dilapidated water systems endanger the public health, leading to pressure for improvements to the water infrastructure. Some improvements have already begun; most are in the pipeline. All of the catchup spending by our water and sewage utilities is raising water rates – Canada’s price hikes are outpacing those in most countries – and speeding the day that water metering takes hold in Canada.

Although higher water rates will hit most Canadian consumers hard, the great majority of residents in multi-family dwellings will largely be spared once their units become individually metered: They will then pay only for their own consumption and not that of wasteful neighbours. The wasteful neighbours, meanwhile, will learn to adapt, too. As one early casualty of the U.S. metering revolution groused after his property management company started charging him for water: “Now I won’t be able to run the shower to help me sleep.”

Right.

Related articles:
Rent control’s wreckage
Homeless by decree
Homeless in paradise
Parasites in the walls
Widening the gap
Lawrence Solomon is executive director of Urban Renaissance Institute, a Toronto-based think-tank. www.urban.probeinternational.org. E-mail: LawrenceSolomon@nextcity.com.