In the corridors of city hall, the fight has begun over how and where London grows.

Twice this month, city staff have called for changes only to provoke lobbying from developers that persuaded staff and controllers to set aside the proposals.

The city can't afford to grow as it has, staff wrote in a report that suggests shifting some costs from taxpayers to developers.

Developers now share many costs with the city, paying 46 per cent for roads and 90 per cent for sewers. But staff suggest they pay in full for work up to $1 million and environmental assessments that are prerequisites to construction.

The reaction to the proposals was swift. Developers phoned members of council and the chamber of commerce.

Staff recommendations were twice set aside by the city's board of control.

"I would describe the response as intense," city engineer Pete Steblin said. "They were calling many people expressing concerns."

The intense reaction was to calls for a change in the way development is funded.

"The pace of . . . growth has outstripped the city's ability to establish infrastructure . . . and far outstrips the city's needs," the report concluded.

Growth has been rapid for a variety of reasons, with low interest rates front and centre.

City rules play a role, too, allowing developers to build in many directions at once.

Urban sprawl, as it's described in the staff report, is enabled by a funding tool unique to London, the Urban Works Reserve Fund. The fund lets developers go to many places along the city's fringe, where roads and sewers must be built that can service future growth.

Such growth is costly to service, and although developers pay for part of that work, taxpayers pick up the rest, the shares set in periodic reviews.

Developers have lobbied to keep their shares low, Steblin said, pointing to the current arrangement that has taxpayers pay 54 per cent of the cost of new or expanded roads.

That's made new roads cheaper for developers, but it's also made development less affordable for the city.

The city pays its share for infrastructure from a capital budget that has a $30-million cap on borrowing.

With the city already committed to projects such as the expansion of the police station, little is left for roads, far less than what would be needed to keep pace with the plans of developers.

If developers don't want to accept slower growth, they should pick up a greater share of the costs, Steblin said.

For developer Tony Marsman, who made his mark building condos through his company Rembrandt Homes, it's city hall that has a choice to make.

"Do we want to choke off new development or can we be creative and work toward a solution?"

Marsman and other developers want the city to enter into agreements that would have developers pay for all works up-front, with the city paying back its share at some agreed upon time in the future.

That model was used to expand Fanshawe Park Road West.

But city staff have reservations. It took a lot of time to negotiate Fanshawe agreements that involved as many as seven developers.

City staff also worry too many agreements would mean future capital budgets that serve the needs of developers rather than taxpayers.

A RECIPE FOR URBAN SPRAWL

In most Canadian cities, politicians plan where and when growth will occur, choosing a limited number of areas and letting those fully develop before turning to another area. The result is less costly and more effective development, say London city staff. But London has chosen a different way to grow that staff say has led to urban sprawl. Here's how it happened:

- On Jan. 1, 1993, London annexed about 26,000 hectares from surrounding Middlesex County, providing bountiful and relatively cheap land.

- In the years after annexation, the city allowed many of the new lands to be zoned for development long before construction would occur. This enabled developers to buy land while it was still inexpensive.

- When demand for housing picked up later in the decade, developers tapped a source of funding unique to London, the Urban Works Reserve Fund. Developers borrowed money from the fund to repay bank loans and later replenished it when building permits are issued. The fund enabled rapid growth in many areas, not only creating sprawl, but a problem in the fund itself, staff say. The lag between loans and paybacks created a growing waiting list of developers. If nothing changes, the wait will grow to five years, a prospect that some fear could choke off bank loans for development.