Thursday, January 14, 2010

Can Brownfield redevelopment take off?

The Wikipedia definition of Brownfield sites is "abandoned or underused industrial and commercial facilities available for re-use." In certain parts of the U.S., Brownfield sites are becoming more popular and accepted in this era of environmental sustainability. With Brownfield sites, there is massive potential for increasing density and optimizing land uses in an urban environment. By re-using land that is closer to the urban core, you can effectively increase urban density, allow people to live closer to their workplace (assuming they work downtown) and minimize urban sprawl (which is environmentally disastrous).

Places like St. Paul, Minnesota have been highly successful at showcasing the economic and environmental benefits of Brownfield redevelopment. St. Paul expects that redevelopment of the city's 1,000 acres of Brownfields will create as many as 13,000 new jobs and $25 million in annual property tax revenues. That is super progressive and innovative.

So St. Paul has been successful with implementing Brownfields, but many Canadian cities have not been. With Brownfield redevelopment for housing, the liability and regulatory barriers are significant obstacles because the greater number of end users are exposed to potential risk. More importantly however, the bigger obstacle is the stigma around Brownfields themselves. There is a lot of stigma around Brownfield sites according to the Canadian Mortgage and Housing Corporation (CMHC), this is because the media and developers deem Brownfield sites as contaminated and unsafe and thus highly risky.

This stigma has been perpetuated and has worried many developers from putting in redevelopment projects- those perceived risks have stifled innovation in industrial design and construction. It is really unfortunate because the media does not showcase cities that have been successful with Brownfields, St. Paul being the prime example.

In Canada, the CMHC has been talking about having public outreach programs designed to educate participants in the Brownfield redevelopment process on the real risks and benefits of the process. Alas, this has not taken off as vigorously as many sought. With a weakened economy, developers have not taken many risks with Brownfields, instead, many continue to construct massive sub-division projects which only perpetuate that problem of urban sprawl. This is happening in Peterborough and in areas close to the Greenbelt.

Brownfield redevelopment can restrain urban sprawl. It’s like an urban containment policy. Brownfield redevelopment is really expensive though. There has been a reluctance of lenders to provide financing for brownfield redevelopment projects. Unless the risk assessment process is sound, the lender may not want to provide a loan because the land might be worth nothing down the road.

A Brownfield project is a way of providing affordable housing within existing urban areas while reducing expansion (in essence, it does work towards social justice and environmental sustainability).

It can also encourage economic development through concentrating more mixed commercial and residential uses in the urban core, however, this has to be popular and attractive for developers! Developers need to understand how such redevelopment can protect and improve human health, promote stronger live-work relationships and above all, maximize economic profitability.

Sadly, one of the biggest loopholes of this process is “the inability to transfer liability when land is sold”. This has caused some large corporate landowners to mothball their properties

Key message: Brownfields can alleviate the environmental repercussions of urban sprawl. Education and the Federation of Canadian Municipalities can both help make this process a heck of a lot easier.

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