“It used to be that jobs and economic opportunities drew migrants.  No longer.  Today’s populations are more mobile than ever.  Armed with information and freed by technology, today’s migrants choose their communities much more carefully than ever before.  Therefore, communities must be savvy in the retention and attraction of people.  In fact, if communities don’t inspire their citizens, they run the risk of becoming failed communities.”
- From “Beyond Economic Survival” by Centre for Innovative & Entrepreneurial Leadership.  Taken from the Rurban Fringe.

I’ve talked about the importance of making a community desirable.  Studies have found a strong link between residents’ attachment and economic growth.  The first step is to watch out for behaviour that kill organizations and municipalities.  Second, figure out a proper Urban Plan that aims to transform a community into one people would pay a premium to be a part of (read Mississauga’s Mayor McCallion’s regret).  Third, identify businesses that would be loss leaders for the community.

Then just sit back and enjoy stable property values, higher quality of life and strong economic growth. 

Full report here.

Please explain why, or why not.

This is a follow up to my loss leader post.  You should read it before voting. 

A very quick summary is this :-

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Walmart, Superstore and other retailers sell hardcover books for less than the cost.  Why?  It gets people to the store.  Specifically, it is better than selling toasters or socks at a discount because it gets the right customer in the store. Customers who buy hardcover books (which is arguably a luxury item) buy other items too. 

Does your municipality have a loss leader?  Something it offers in a discount to attract desirable businesses or residents?

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A city or a town is nothing less than a brand name.  Some brands matter while others do not. 

Why should Milton (or any town for that matter) care about its brand?  First, property values (of course). Second, strong brands create strong attachments and municipalities with stronger attachment experience better economic growth.  A recent study confirmed it.

Will Milton be a vibrant, growing brand in GTA or an irrelevant one?

It’s yet another thing I’d been saying for years.  Finally, a study confirms it:

Perhaps most useful for them is the fact that researchers found perceptions of economic prosperity are not the leading drivers of attachment feelings among residents. Instead, most of the 14,000 respondents rated social offerings (such as entertainment and other venues that promote interconnectivity among residents), openness (acceptance of diversity) and community aesthetics as the top qualities that influenced decisions on where to anchor their lives and careers.

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An update on the previous post (Re: Milton gets some stimulus money).  There was some confusion about the total amount of the money.  Turned out that the nearly $15 million cheque was from the federal government.  There’s an equivalent amount from the Provincial government.  That’s nearly $30 million. Yay!  Of course Milton needs to put up a third … but all-in-all it’s $45 million worth of work that will get done over the next few months on Milton Sports Centre expansion and the Arts & Entertainment Complex / Central Library. 

If you’re an Ontarian then you likely already heard about the plans to harmonize the Provincial Sales Tax with GST (resulting in another acronym: HST). This means new homes costing more than $400,000 will be subjected to at least some sales tax (those costing > $500K will be subjected to full 13% tax, instead of 5% like today). On top of that the government still plans to charge these poor souls Ontario Land Transfer Tax. At least they could’ve gotten rid of this, but they decided not to.

I think it means builders will keep the house costs below $400K by building smaller, simpler homes (before taxes and stuff). After all, a $400,000 house will cost you $400,000 but a $500,000 house will suddenly cost $565,000 (yes, you aren’t just taxed on incremental amount about $400,000. The tax is on the entire amount!) This translates to a tax increase of $40,000 due to HST.

So basically expect more postage stamp sized lots and smaller houses with tiny, tiny driveways. Likely narrowed roads as well. If a family needs four bedrooms and at least some backyard then they may just have to look at the resale market.

This may somehow become a good news for existing homes that cost > $500K. Over time market will get saturated with cheaper, smaller homes. A buyer looking for a larger house in GTA (aka, expensive area) with some amenities like hardwood, taller ceilings etc may have very few homes to choose from.

It may be good news for contractors as well. Selling your home and buying a new one suddenly became a lot more expensive (with an additional 8% tax on top of existing expensive taxes and selling costs added.) This means people may just spend money upgrading their existing homes instead of starting over, provided that they wanted to buy a house that costs more than the threshold.

For the record, I am not celebrating this change and don’t see it as a positive, especially in this time. However, I am trying to have a positive attitude by finding a silver lining :-).  Personally it seems unacceptable for the Ontario government to charge HST and land-transfer tax.