LRT benefits will need revising to account for 5 year housing boom
2010 study projected LRT would spur development along the route worth many millions
The predictions for the economic benefit of light right transit were already a rosy $81 million in new tax revenue over 15 years when they were studied in 2010.
Now local economic development officials say that after a sustained five year real estate boom, those estimates would likely need to be revised — upwards..
Hamilton has pushed LRT as much as an economic development strategy as a transportation one, so the hopes are high for what the transit line will mean for the city.
The report notes that "It has long been understood that LRT lines increase the demand for land near the line and foster development" because of the connections between homes, workplaces, recreation and shopping.
In a 2010 report, the Canadian Urban Institute projected tens of millions in development and new tax income f the province built an LRT line through the lower city. On Tuesday, the province pledged $1 billion to build a line along King Street from McMaster University to the Queenston traffic circle. A spur line will run to the new James North GO station.
The report assumed that 108 developments will happen over 15 years along the LRT corridor, 76 more than would happen otherwise. Sixty per cent would be residential. That would bring $22.4 million in new taxes and $30.2 million in development charges and building permit fees. And there would be a bump-up in assessment from increased property values along the route of an estimated $29 million.
In reality, if you go to visit the sites, you realize the likelihood of them being developed.- Coun. Chad Collins
But Jason Thorne, the city's general manager of planning and economic development, says those numbers are probably conservative now.
"The real estate market has changed since that report was done, so I suspect those numbers have changed," he said. "I wouldn't want to try to guess what that might be, but I would guess that they would be higher."
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Every month, real estate reports show Hamilton's housing prices outpacing most of Canada. In the first quarter of 2015 alone, for example, the average price of a home in Hamilton increased by eight per cent.
The Canada Mortgage and Housing Corporation says the trend will continue, particularly in the central lower city. That includes Ward 3, which is in the LRT path. Colliers International recently cited Hamilton as a city primed for commercial real estate development.
Hope in Ward 3
So Matthew Green, councillor for Ward 3, also hopes the economic uplift should be greater than predicted.
"I don't think that anybody in 2010 could have predicted the real estate turnaround in central Hamilton that we're seeing right now," he said. "I can only imagine how we're going to find density along that corridor."
Not everyone agrees with the projected benefits. Coun. Chad Collins of Ward 5 says there will be uplift, but it won't be as extreme as what people predict.
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Much of the developable land identified in the Canadian Urban Institute report isn't feasible, he said. The report identifies city parks, for example, and plots too tiny to even hold buildings. Eliminate those, he said, and the numbers fall.
"In reality, if you go to visit the sites, you realize the likelihood of them being developed," he said.
Not a driver on its own
In 2014, a report by McMaster University PhD candidate Christopher Higgins warned that LRT, on its own, will not rebrand Hamilton or encourage development. Rather, it's only useful for targeting development that's already happening.
"Rapid transit should not be understood as a primary driver of new growth and revitalization, but a tool to guide growth that would have occurred anyhow," he wrote.
Higgins said Wednesday that it's feasible that the real estate market has improved projections. His new thesis, nearly completed, takes an updated look at projections.
Economic uplift will only happen, he said, if the city implements policies that encourage the growth. That includes complete streets, relaxing parking requirements and encouraging more height and density, he said.
City council voted Wednesday to establish an LRT office and subcommittee. The office will look into updated economic projections and encouraging development, Thorne said.