Economic growth is important to our community!
The City of London and the London Economic Development Corporation (LEDC) actively work to bring private sector investment to London as they understand that it brings jobs and prosperity for Londoners.It is also important to recognize that new development (residential, commercial, institutional and industrial) is a response to economic growth in a healthy community. The two go hand-in-hand.
- Economic growth –promotes prosperity. Without economic growth, there will be no new residential or commercial development in a community. Communities that do not grow do not prosper and do not offer an attractive quality of life to residents.
- Economic growth is widely understood to have substantial benefits for communities. Economic growth is vigorously pursued by all levels of government as they recognize that growth creates new and better jobs, higher incomes, a stronger local economy and tax base, and a more vibrant community. It provides residents with greater prosperity, jobs and improved chances for a better quality of life.
- Housing is a critical element of economic growth. It provides employment and increased revenues to a community, and the availability and cost of housing is key to London’s capability to attract new investment.
- The construction industry is a key part of London’s economic infrastructure. Professional builders and contractors are critical to a healthy viable economy in a community and its social and economic fabric; providing an essential resource for building and maintaining our homes, businesses and infrastructure.
- New development creates jobs in the community. Last year, new residential development in London resulted in the creation of 8,800 jobs in the construction industry alone. In addition, spin-off jobs are created in a myriad of industries providing goods and services necessary for construction work. Further, there is a “multiplier effect” when the families of construction workers and other workers spend the incomes generated from this work, which also generates additional jobs in many other sectors of London.
- MLS® home sales generate jobs and support for many business sectors. According to the Altus Group, the estimated expenditure generated by the average housing transaction in Ontario in 2011 was $52,925 – general household purchases, furniture, appliances, moving costs, renovations and services (financial, legal, real estate, appraisal, survey, other) – purchases related to the costs of moving from one home to another. In 2013, 7,905 homes were sold through the London & St. Thomas Association of REALTORS® MLS®, pumping $418,372,125 into our local economy in one year alone.
- New construction generates substantial revenues for a municipality. Each new single-detached home constructed in London adds revenues of $23,716. in development charges which pay for the new services required for growth. New commercial and industrial construction also pay Development Charges and finance new infrastructure. The municipality invests these funds in capital works – creating more jobs through infrastructure spending. Other charges on new construction, (building permit fees, planning application fees etc.), generate additional revenues for our municipality and increase the general tax base.
- New economic development helps finance improved community services. Each new building in London will contribute future annual property tax revenues to enhance municipal services for all residents. Example, approx. 1,000 homes built, will generate $3.6 million. per year of future revenues (average property taxes of $3,600 per new single-detached home). Other dwelling types (semi-detached, row homes, and apartments), and new commercial and industrial development will also generate additional revenues.
- New housing development enhances opportunities for homeownership. New residential development helps ensure that the market for housing remains competitive and that home seekers have a range of housing from which to choose. A competitive market is important for housing affordability.
- New economic development and growth provides significant BENEFITS to London. These benefits contribute to a better quality of life for all residents. Too often, growth is viewed from a negative perspective. For London to grow and prosper, and citizens to enjoy prosperity and a better quality of life, it is essential to recognize the enormous benefits that economic growth and new development provide:
- New jobs that allow youth to stay in the City;
- Support for transit and the new BRT system;
- Affordable housing in energy efficient buildings;
- Funds for increased social services;
- New parks and public open space;
- Revitalizes Downtown and Old East Village;
- Contributes to community facilities like the Budweiser Gardens, new community centres and the Covent Garden Market and Central Library.
New Development Responds to Economic Growth – Which Promotes Prosperity
In local communities, just like in countries and provinces, economic growth is the foundation of prosperity. One needs only to look at the average incomes, unemployment rates, and out-migration numbers for slow-growth regions and communities to recognize the critical relationship between growth and prosperity. In a nutshell, economic growth:
Economic growth is the foundation for prosperity in a modern economy. New development (residential, commercial and industrial) is a response to economic growth in a healthy community. The two go hand in hand. Without new economic growth in a community there will be little or no new significant growth in the residential or commercial sectors. Without growth, there is little need for new development – economic stagnation is the result. Development is part of the process of growth – a process which benefits everyone in the community by encouraging private investment and a stronger local economy.
Studies conducted by The Canadian Real Estate Association:
- The Economic Impacts of MLS® System Home Sales and Purchases in Canada and the Provinces:
- The Contribution of the Commercial Real Estate Sector to the Canadian Economy:
- The Economic Impact of Commercial Multi-Unit Residential Property Transactions in Toronto, Calgary and Vancouver:
Regarding a Municipal Land Transfer Tax: MLTT London Key Messages.15Aug14