Tax penalty sought for lot-splitting blockers
Property owners who refuse to allow the city to increase density on their lots could face higher taxes under a new plan pitched by Coun. Michael Oshry.
In at least three areas of the city, residents have organized to sign restrictive covenants, a legal tool that forever prevents their lots from being split to allow for higher density.
But Oshry said that puts a higher burden on other residents, who either have to accommodate the density in their neighbourhoods or fund a city that’s sprawling unsustainably outward.
“Somebody sterilizes their property by having a restrictive covenant on it,” he said.
“We should be able to charge them a higher tax rate . ... It’s a question of fairness.”
Oshry submitted a formal inquiry at a recent council meeting, asking city staff to analyze how to create a residential property tax subclass for this under the Municipal Government Act.
The report is coming back this fall, after the election, to allow staff to determine if it would also be possible to use this approach for commercial properties.
By then, new provincial regulations should make it clear if changes to the act would allow Edmonton to penalize companies like Sobeys, that now hold caveats preventing grocery stores from opening on some former Safeway sites.
“We pass zoning rules. If you want to get out of the rules by getting a restrictive covenant ... city councillors should look for ways to circumvent the legal (contract),” said Oshry.
Hundreds of residents in Westbrook Estates, Greater Hardisty and Rio Terrace have already signed these legal agreements to prevent higher densities on their lots.
In the Rio Terrace area, which Oshry represents, 100 homeowners signed covenants for their properties but the covenant has not yet been registered with the land titles office.
Organizer Yves Forte said they paused “when we learned the city was considering increasing taxes.”
They want residents to confirm they still want to go ahead with this question in play. Forte thinks it will be an election issue — the October vote might bring more sympathetic voices to the table.
Oshry isn’t running for re-election.
Miranda Jimmy, one of five candidates running to replace Oshry, said she’d like the city to do better public engagement and discuss the benefits of higher density and mixed-income communities before looking at punitive measures.
They’re holding infill tours but that’s “speaking to the choir,” she said.
Higher tax might be a response, but Jimmy said she’d like numbers on what these density restrictions actually cost the city.
Nafisa Bowen, also a Ward 5 candidate, said boosting taxes is a polarizing approach she flat-out disagrees with.
She’d like the city to make lot subdivision contingent on neighbourhood-specific factors, such as whether the parking, traffic and underground infrastructure can handle increased density.
Then, if the city approves a subdivision and neighbours disagree, they can appeal. The current rules allow subdivision for any lot at least 15 metres (50 feet) wide.
Sitting council members have mixed opinions.
Ward 8 Coun. Ben Henderson is lukewarm on the idea, looking forward to more detail. “Would it discourage people from putting covenants on in the future? Maybe yes.”
But Ward 10 Coun. Michael Walters said the estate lots with covenants in his area already pay “enormous amounts of tax.”
Instead of new taxes, he wants an education campaign about how neighbourhoods are losing population, which hurts local schools and businesses. Don’t support an antidensity campaign, he said. “You’re hurting your neighbourhood in the long-term.”
Provincial officials confirmed nothing in the Municipal Government Act prevents Edmonton from having different tax rates for residential lots that opt for restrictive covenants.