Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

“Say “no” to TransLink and Metro’s Hong Kong model for funding transit”

with 9 comments

The title is taken from an opinion piece on the Straight’s web page forwarded to me by reader Mike Harridon. It is written by Elizabeth Murphy who “has a background in development and urban land economics and has worked in the private sector, for the City of Vancouver, and for the Province of B.C.” She also seems to be able to conjure up a great deal out of very little evidence. It is a long article, and I won’t quote much from it, but you need to read the whole thing to get an idea of what she is concerned about. I am not saying she is wrong – with this government who knows what they think they can get away with. I just think she is probably over reacting. And anyway who can we say “No” to? Neither Translink nor the Provincial Government listens to citizens concerns.

She takes one diagram out of Transport 2040: A Transportation Strategy for Metro Vancouver, Now and in the Future and from that concludes “The province has effectively given TransLink authority over land-use policy plans at the regional and municipal levels.” It seems to be to be over reaching. I take the diagram to mean that the province sets the overall transportation and transit strategy for the province, and then Translink translates that into a 30 year transit plan for the region and has a dialogue about it with Metro.

Translink_chart2_090819But, as she says what the arrows are supposed to mean  “are never explained”.

If I had not already recently disposed of Harvey Enchin’s similar fantasies, I might have disregarded the rest. But I read carefully and also looked at the references, and I still cannot come to the same conclusion. But perhaps that is because I spent a few years in the GVTA (the SoCoBritCA predecessor that also used the Translink identity) wondering what we had to do to get legitimate transit concerns about major developments considered either at the regional or the municipal level. Becuase the old GVTA Act said they had to consult and they didn’t, and wouldn’t. And since the GVTA was then run by a Board composed mostly of Mayors and some other councillors no-one in the management really had any desire to tackle the issue. So it simply got ignored.

She is absolutely right to be concerned about “the Undemocratic Nature of TransLink and Its Transportation Plan”. And I agree that “the Proposal to use the Hong Kong Model of Funding Transit through Real Estate Development is Problematic”. Actually the main problem I see is that in the current market there is little chance of Translink making much money and a great risk it will end up, like the City of Vancouver, in trouble with a development like the olympic Village.

For instance, to raise only $15 million toward funding one SkyTrain station in Richmond at Capstan Way, 16 towers were proposed. That project has since fallen through because of the economy and the financial crisis.

Translink was not part of that development of course, and the developer had promised to pay that sum to get a station near his development, then  backed out of the deal when it looked like he would have trouble selling the units. That is quite different to Translink buying land to build a line, which it then pays for out the development on the bits it doesn’t need for stations. Which is what I understand is the Hong Kong model.

But then she goes on to state “Metro Vancouver’s 2040 Regional Growth Strategy Proposal Implements TransLink’s Hong Kong Model of Development-Funded Transit”. No, I do not think it does. It says, quite properly, that future density needs to be served by better transit and concentrated at transit nodes or along transit corridors. That is just good planning policy. But Metro has absolutely no way of making the municipalities actually do anything. We saw that with the previous LRSP. Each municipality had to get the GVRD’s endorsement that its OCP was compatible with the Regional Growth Strategy, but once that was done, what they decided to do on Monday night when they looked at development applications was up to each individual municipality. And in BC there is no appeal of a municipal planning decision – not to the region or the province. The Regional Growth Strategy said nothing about Office Parks, for instance, but did say employment should be concentrated in the regional town centres where they could be served by mass transit. Except most of them weren’t  and very few developers wanted to put up expensive towers near the transit lines. They wanted to put up cheap low rise buildings with huge parking lots near the freeway entrances. And that is what most municipalities allowed as they needed the property tax revenue.

I happen to think that Frequent Transit Development Corridors as proposed in the Regional Growth Strategy are a very good idea – but that doesn’t mean that even if Metro endorses them that we will necessarily see them happening. Only if enough developers buy in to the concept and municipalities decide to let them.

She also has a series of recommendations, most of which I can support except for this one

TransLink should be limited to authority for transportation only

Which I think is actually the case at present. Allowing them to develop the sites they own to produce transit oriented development seems to me to be a much better idea than the current practice which produces places like Sexsmith park and ride or Phibbs Exchange which seem to me to lack basic urbanity, but could be quite good places if developed properly. They might even make money, but right now I would regard that as a possible bonus not a secure source of funding for transit growth. But also I think that we need a different kind of regional authority or government. One that actually has real powers over transport and land use – as well as other regional services like sewers, parks, waste disposal and all the rest. That would combine Translink and Metro as one directly elected body, accountable to the people of this region and with powers to both borrow and to raise taxes and levy charges. Metro as it currently stands has no power over planning: it tries to achieve consensus which means we go no faster than the slowest – and we cannot afford that any longer. We need to change, and change radically, to a sustainable region which means more transit, denser development and no (expletive deleted) freeways! The chances of that happening here now are slim to none, and we will suffer for that. But eventually we will have to embrace this notion or we are doomed. Business as usual is no longer an option. And I think that is really what  Elizabeth Murphy wants to return to.

I really doubt hat there is any substance to the idea that the province thinks it can control development through Translink. And anyway it doesn’t need to. It is already influencing future development patterns by picking its preferred transit lines (Canada Line gets chosen over Evergreen is a purely provincial decision) and by expanding the freeway. That and the SFPR have pretty much set the pattern of development across the region for the next forty years – and it is not going to be transit oriented.

Written by Stephen Rees

August 20, 2009 at 7:56 pm

9 Responses

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  1. According to news from last year and this year the Government of Ontario appears to show a lot more interest in financing new transit lines (including LRT) than the B.C Liberals and the Feds are quite generous towards Ontario as well.

    I was living in Toronto in the 70s when lots of new construction was taking place along the rapid transit corridors, starting at Bloor and Yonge and inching its way towards North York along the Yonge line but also Westwards along the Bloor line. I obviously don’t know all the precise details but it appeared to be at the time a joint effort between the city, the Toronto Transit and developers. Most of the developments around the uptown stations were apartment buildings and small stores, nowhere as dense and big as those in Hong-Kong or Japan but they were an asset to the city and the streetscape. The Davisville area of Toronto was one of the most pleasant of these new developments.

    Red frog

    August 20, 2009 at 9:25 pm

  2. It seems to me that a better way to fund rapid transit lines would be to allow tax increment financing, or TIFs. With TIFs, the government authority would identify a geographical area that it thinks will benefit from the development, and then as property values rise a designated portion of the property tax revenue would be used to back and pay off bonds for the project. This avoids the somewhat questionable practice of the government becoming a private developer but also helps pay for the project with the benefits it generates.

    Jeff Dean

    August 21, 2009 at 10:38 am

  3. Developers do not like TIFs. When threatened with them in Toronto to pay for the Sheppard subway they simply said they had plenty of places to go to where such taxes were not levied, and they would do developments there instead. The TTC backed down.

    Stephen Rees

    August 21, 2009 at 10:42 am

  4. There is a lot here to comment on, but I suppose the central question is how do we fund public transit? I fail to see how this is any kind of a problem. It is simply political will and at the moment our politicians favour the car over public transit. There is no limit to the extent we will go to subsides the privately owned automobile. But, when it comes to public transit we have to scratch and beg for funding.

    The other central point here is, is the provincial government trying to control or influence development in metro? Yes of course they are. Other governments of different stripes have also done this for their own political goals and they have used the local transit authority to do this. You have provided two very poignant examples yourself, freeway expansion and canada line. The evidence for this may not be found in that lovely diagram referenced by Murphy, but I believe what I have said here to be true.

    I fully agree that what we need is a different kind of regional government, but as long as the provincial and federal government control the purse strings the region will always be subject to their will.

    I enjoy your blog very much, thanks for dedicating your time to your thoughtful posts.

    {moderator’s note: lightly edited for English]

    ryan mijker

    August 25, 2009 at 3:15 pm

  5. Wow, where to begin?

    First of all I love Hong Kong’s MTRC. It is a very well respected company, provides great service to the citizens of Hong Kong (I lived in HK for a year, so I can personally attest to that), and actually makes a profit.

    It is a great model of how to run a Transit company. One that I think Translink should be following.
    In fact there is hope that they are trying. Take a look at the following article from March of 2008:

    http://www.canada.com/vancouversun/story.html?id=e30465a4-f77a-400a-88b9-dd0722f1b559&k=44798

    I actually asked Translink about following the MTRC model in their June online forum and got a response from Phil Christie, who is Translink’s Vice-President of Real Estate.

    Take a look here:
    http://www.translink.ca/forum/default.aspx?g=posts&t=6

    The logical extension of Elizabeth Murphy’s anti MTRC “fear” is one the following two cases:

    A) Translink builds Skytrain or light rail systems, but local anti-density Nimbys block most re-zoning and transit oriented development. An example of this might be a Skytrain or Lightrail to UBC without any major redevelopment.

    OR

    B) Translink builds a skytrain or Light Rail system, and re-zoning for density follows afterwards. An example of this would be the Vancouver section of the Canada line. The government pays, Translink pays, but Developers cash in.

    Either Translink is stuck with a money losing line, or Translink misses out on a chance to offset the cost of construction of the line.

    Case A is clearly crazy, but reading between the lines it seems to be what Ms Murphy wants.

    And look. Vancouver is growing, the people need to live somewhere. Transit oriented development needs to happen.

    Case B is less outrageous, but if the re-development is going to happen anyway, for gods sake why not let Translink get in on the ground floor?

    The argument that the money should come from government is all well and good. But that money is coming from somewhere. It isn’t falling out of the sky. It is coming from you and me. Also, Translink takes on debt to pay for part of these projects? Shouldn’t Translink be trying to make some of that money back in other ways than through transit fares?

    Look, I know that Translink can’t be a “pure” corporation like the MTRC is. In the end it is providing a public service. But, it could at least act a bit like a Crown Corporation, trying to make money where it can. Especially the obvious stuff like development around station.

    And personally, I am NOT worried about the “undemocratic nature of Translink”. Were people worried about the “undemocratic nature” of the board of Canadian National or Petro Canada when they were Crown Corporations? The people accountable for Translink are the politicians who appoint the board.

    Frankly sometimes you need a technocrat!

    You can’t have elections for everything. If you did have elected Translink officials who would show up to vote? Low information voters, randomly choosing names? Or more likely, Anti-transit crazies from Surrey? Think about it. We would probably end up with the Transit equivalent of the Kansas board of Education. I’ll take the technocrats we have now thank you.

    Long post.. I hope someone reads it.

    Alex

    Alex

    August 26, 2009 at 2:39 pm

  6. Yes Alex someone reads your post – they have to be moderated so at least I see it

    Stephen Rees

    August 26, 2009 at 2:50 pm

  7. Paris’ transit company, the RATP, could be a model for TransLink. It has, relatively recently, redeveloped old bus depots etc and used the area around and above them for housing, stores, offices etc. The RATP, also work as a consultant, helping foreign towns build their Metro system.
    Japanese private railway companies, like Hankyu and Hanshin in the Osaka area (they are now a joint company ) have been at the forefront of this type of multi-use development, starting in the 1910s for Hankyu. MTC is another example ..but unlike them, RATP is a French government creature.
    The Gare de Montparnasse and Gare de Lyon are 2 examples of the type of big size development that can be done over and around tracks with the participation of a government controlled transport company, in these 2 cases the SNCF (French National railways) with some participation from the RATP.

    Red frog

    August 26, 2009 at 11:29 pm

  8. I am not against the involvement of the Private Sector. I’ve done a bit of research on the Hong Kong model for my Masters dissertation. It was (and still is) considered an innovative public-private-partnership (P3) model and I believe it has never really been replicated in any other jurisdiction.

    While Translink is making efforts to go towards a similar model, I think some problems will arise in a lowly populated city like Vancouver. When Hong Kong transferred the land to MTRC to implement this model (at no cost to tax payers), the city was going through Real Estate revolution of sorts. Even without the Metro, the cost of Real Estate would have increased significantly year by year. The MTRC benefited from this model by selling Real Estate surrounding the proposed Metro line, thereby subsidizing the cost the design, build and operation of the subway.

    http://gbcode.hktdc.com/gb/www.hktrader.net/200611/success/success-MTRC200611.htm

    However, Vancouver is among the most expensive cities in Canada. While times of economic gain may bring modest gains in real estate prices, the Vancouver Real Estate market has already plateaued. Any gain in real estate as a result of the development of high-order transit would be modest. It certainly would not subsidize the capital cost of the entire project. In times of economic difficulty, the Translink Real Estate division may actually suffer loses, if the real estate investment does not pan out.

    When Toronto’s TTC planned two additional subway expansions to the suburban cities of Richmond Hill and Vaughan, as well as the proposed LRT system, the city rejected this model because they felt the city did not have the density nor the favourable housing market. Of course, a city like Toronto (or even Montreal) is far denser and more populated than Vancouver.

    While I don’t think a Hong Kong model would work in Canada, I do favour transit oriented development. When it comes to high-order transit, transit oriented development should grow organically, so-long as the proper zoning is provided by the city.

    In York Region, a suburban region north of Toronto, which incorporates a number of independently governed municipalities, a Bus-Rapid Transit system was implemented. An entire BRT system was implemented through a P3 at a cost of $200 million. While the cost of the project was financed by all three levels of Government, the private consortium bore the risk of cost-over runs and construction delays.

    Keeping in mind that we are dealing with suburban communities, each municipality in York Region involved in the project zoned specific areas that are transit-oriented. The BRT network, called VIVA, is now rolling out its second phase of rapid ways:

    http://www.vivanext.com/rapidways

    Here are some additional images of the proposed transit-oriented districts surrounding VIVA stations.

    http://www.vivanext.com/gallery_rapid_construction

    One of the proposed transit-oriented zones includes an area called Downtown Markham, here is a video of the proposed development. Keep in mind, the land where this is expected to be developed was farm land only 5 years ago.

    http://www.downtownmarkham.ca/view/video_fly_by.php

    Gallary: http://www.downtownmarkham.ca/view/index.php

    Ken

    September 3, 2009 at 6:01 am

  9. I do not object to private sector involvement on principle. I simply reject the assumption that they are always in the public’s best interest. In BC P3s are mandatory. There is no requirement to show that they offer a better deal than a public sector project. As a result, the P3s we get are at best dubious, at worst a way for private sector companies to profit at taxpayers’ expense. Moreover, in Britain where public sector comparators have been required, many P3s have collapsed causing significant disruption and expense. It is now established that the privatization of British Rail has tripled the amount of public subsidy for railways. In BC it is also the case that privatization of formerly public operations has both increased costs and reduced the wages and benefits of the employees, as well as reducing the quality of services. The government’s policies in general – as demonstrated by the last budget – are to increase the burden on individuals – especially those with low incomes – in order to increase private sector profits. The claim that this leads to “economic growth” and thus a general increase in wellbeing is demonstrably false.

    Stephen Rees

    September 3, 2009 at 7:46 am


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