Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 212

The City of Burnaby recently passed an amendment to its inclusionary rental requirements. It has now been removed from the southeast portion of the city, which, according to Burnaby Now , has one of the lowest median incomes in the city.

Here's an excerpt from the staff recommendation report that was approved in early October:

The analysis explored the impacts of increasing the density of developments in the Edmonds Town Centre area to try and improve revenues. However, the results showed that at current values, additional density is not able to offset the costs of providing the non-market housing , and that the equity needed to pursue large developments became prohibitive. As such, it is recommended that inclusionary rental requirements apply city-wide, with a delayed effective date for the Southeast Burnaby CMHC rental zone (the “SE Burnaby CMHC Zone”), until such time that inclusionary rental requirements become financially viable.

What's noteworthy about this amendment is that it acknowledges the real costs associated with non-market housing and shows how important high market rents are to subsidizing them. There's no such thing as no-cost affordable housing . In the end, somebody always has to pay.

This, it turns out, is an important question, because there's a strong correlation between trust in government and overall prosperity (the above chart is via NZZ ). The extreme examples of distrust are somewhat intuitive. If, for example, you don't believe that your government will uphold property rights, why would you ever want to risk investing in property?

But it can be even more subtle and insidious :

Trust is central to both stability and development. If citizens have trust in their system, they will be more likely to push for growth-promoting reforms. Moreover, they will be more confident that politicians will actually implement such reforms, and that sacrifices made today will pay off in the future. If this trust is lost, democracies become unstable, and autocratic tendencies are more likely to prevail. However, trust is also important for the transition from an autocracy geared solely toward the extraction of resources and wealth into a progressive democracy. A politically dominant class that governs autocratically will make concessions voluntarily and refrain from repression only if it trusts that it too will benefit from the institutional changes over the long term, and that it will not later be deprived of all opportunities.

All of this forms part of the work of economists Daron Acemoglu, Simon Johnson and James A. Robinson, who were awarded the Nobel Prize in Economics earlier this year. Their research explains why wealth is so unevenly distributed across the world. It's a problem of institutions. But it's also highly relevant to countries that are already rich.

Distrust is on the rise in countries like the UK (57%), France, (51%), Germany (49%), and Italy (47%). The outliers among OECD countries are places like Luxembourg and Switzerland. Only 25% of Swiss people express distrust in the government. That's a good thing for overall prosperity and it shows in their GDP. So how can we be more like the Swiss?

Radical transparency when it comes to decision making and more of a direct democracy (versus a representative democracy) are two places to start, according to the research. People, it seems, trust their government more when they themselves make more of the decisions.

Here's the full NZZ article . It's an illuminating read.

Today I went for a bike ride on the Niagara Peninsula.

We started at Project Bench , went to the Jordan Village (where the street was having its grand re-opening ), stopped in at RPM Bakehouse for an obligatory apple sticky bun (the line was out the door and we got the last one), and then did a big loop that took us along the Welland Canal and through Port Dalhousie.

Here's the map:

It was a great ride, and it might be one of my last long rides for the season. It's just about time to pull out the snowboard. But for now, I'm going to put tiger balm on my knees and go to bed early. See you tomorrow.