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A City Divided by Political Philosophies: Residential Development in a Bi-Provincial City in Canada
American Journal of Economics and Sociology, The, Jan, 2001 by Gura Bhargava
GURA BHARGAVA [*]
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ABSTRACT. This paper examines the impact of two distinct political ideologies on the development of residential dwellings, particularly single-family residences, in Lloydminster, a bi-provincial city in Canada. Lloydminster is a city of about 22,000 which straddles the provinces of Alberta and Saskatchewan. The two provinces are recognized for the dissimilarities in their political orientations. These dissimilarities are reflected in different taxation policies, different Medicare and health insurance policies and different auto insurance policies, which have given rise to a quantitative and qualitative split in the market for single-family residences in Lloydminster. This duality of the housing market is manifested in Saskatchewan's "affordability" and Alberta's "desirability." Alberta's tax policies have attracted "place entrepreneurs" to build upscale residences on its side for homeowners in high income brackets, who benefit from its tax policies. Saskatchewan's health care and auto insurance advantages ha ve attracted those with such priorities and with moderate incomes. It is contended here that while distinct policies may have contributed to an uneven bi-provincial housing market, the disparity between the markets has been sustained and reinforced by all players who construct the housing reality through myths and perceptions as well as interpretations of policies and their underlying ideologies.
I
Introduction
SINCE THE SECOND WORLD WAR, Canada has witnessed a steady rise in urban settlements, places defined as cities. Cities vary in size, history, topography, centrality, major occupations, economic texture, cultural diversity, and other attributes. Despite these differences, a city may also be viewed as a physical and social construction shaped by prevailing political philosophies and ideologies. This social construction may be reflected in a city's built environments of which residential arrangements constitute a vital part. Residential development, particularly the growth of single-family residences in a city, is often seen as indicating its good health and prosperity. Smaller cities with less population density tend to have a greater proportion of single-family dwellings--more detached than semi-detached--than alternative varieties (Bourne and Bunting 1993) and reportedly higher home ownership rates than are evident in larger urban areas (Ley and Bourne 1993). Research on Canadian cities and various aspects of their residential development abounds. However, larger cities have generally been the beneficiary of such endeavours (Harris 1986; Hertzog and Lewis 1986; Che-Alford 1990; Balakrishnan and Selvanthan 1990; Ray and Moore 1991, among others) with some exceptions (Qadeer and Chinnery 1981; Dahms 1986; Everitt and Gill 1993).
An exploration into the relationship between political ideology and the development of space has generally escaped the attention it deserves. The present study addresses this relatively unexplored area by focusing on an almost one-hundred-year-old settlement which was divided into two separate municipalities by a boundary established to divide the provinces of Alberta and Saskatchewan when they were created in 1905. Lloydminster, this bi-provincial city of approximately 22,000 [1], has its Saskatchewan section located on the eastern side and its Alberta complement situated on the western side.
Unlike municipalities of even five times its size, Lloydminster presents a unique set of possibilities to its residents: it offers them the option of choosing one province over the other as a place of residence, while still allowing them residence under one municipal jurisdiction. This paper contends that the housing market on each side of the border reflects the philosophy, the ideology, and the economic status of the corresponding province more than it does a commonly shared municipal identity. The disparity between the age, size, structure, and value of the single-family houses on both sides of the border relates to the political and economic history of each province and specifically to the differences between their tax policies, auto insurance policies, and home improvement policies. Perceptions and myths surrounding these policies and their interpretation by "speculator-developers" (Harvey 1975a) and other "place entrepreneurs" (Logan and Molotch 1987) are equally important. These interpretations, which revolve around the "use value" and "exchange value" of the houses (Harvey 1975b; Logan and Molotch 1987) have shaped the housing market; previous research has demonstrated the impact of public policies on decisions regarding residential location (Rossi and Shlay 1982; Turner and St ruyk 1989). The discussion of public policies in such research has referred to zoning regulations, homeowners' income tax deductions, government subsidized loans, and amortization rates. The present research focuses instead on provincial policies that are not directly related to home ownership, but which nevertheless have had a profound effect on the development and ownership of homes in Lloydminster. It also addresses another issue. One such policy which may have promoted an uneven development of single family residences in Lloydminster is the policy of different personal income tax rates in both provinces. Seemingly, Alberta's policy of a lower personal income tax rate has contributed to the popularity of this location among homeowners, builders, and developers in Lloydminster. Evidently, the balance of the rate of production of single family residences in Lloydminster tilted towards Alberta in the mid-1970s when Alberta's statutory personal income tax rate was phenomenally lower than that of Saskatchewan. However, once this pattern began, it has continued despite diminishing differences between the statutory personal income tax rates of both provinces. An answer to this paradox is sought in the embeddedness of economic behavior (Granovetter 1985) and in the role of dominant ideology in shaping decisions to choose an area for purchasing a house and making an investment.
