Council wants more study on vacant home tax
Councillor says empty addresses in her ward are a growing problem amid affordability crunch
City council will wait until June to consider a new tax on vacant homes that takes aim at speculators sitting on properties amid an affordability crisis.
That’s when staff are expected to report on the nuts and bolts of a tax that penalizes residential property owners for leaving homes empty for extended periods.
“I can tell you vacant homes is a problem here in the lower city and it’s growing,” Coun. Nrinder Nann told her colleagues Thursday.
They backed the Ward 3 councillor’s call for more details on the proposal, including how the city might tally up vacant properties — a task staff described as challenging.
Nann made her pitch as one of a “spectrum of solutions” amid a housing affordability crunch that’s pushing renters out of the city while more than 5,000 applicants await subsidized units and hundreds seek beds in shelters every night.
A report by finance staff presented Thursday noted Vancouver established an Empty Homes Tax in 2017 to help weed out property speculators.
Vancouver considers a vacant home to be one that’s not occupied for more than six months a year. It cost $7.4 million to implement and costs $2.9 million a year to administer.
Toronto is poised to launch such a tax in 2022 that would include several exemptions, including for renovations, court orders, changes in property title or cases of deceased owners.
Under Ontario’s Municipal Act, a vacant home tax can only be applied to the residential property class, which includes condos, but not rental building units or vacant land.
In Thursday’s report, Hamilton staff followed the methodology of a KPMG consulting study for Toronto that assumed one per cent of housing stock is vacant.
That would work out to 1,765 empty homes, which would yield $6.7 million based on an average assessed value of $381,000 for 2021 and a tax rate of one per cent.
But just how many homes in Hamilton are indeed vacant and what it could take to suss all of them out isn’t clear.
The city’s vacant building registry, which charges fees to owners, offers a clue. Out of roughly 350 properties, 234 are residential. Taxed at one per cent, that would work out to just under $900,000 in revenue.
Brian McMullen, director of financial planning, administration and policy, said staff hoped to learn more from Toronto about its proposed tax program’s administration costs.
“We’d want the tax to cover our operating cost of the program,” he said during Thursday’s budget session.
Councillors were reluctant to ask Ontario’s finance minister to give Hamilton special designation it needs under the Municipal Act to pursue a vacant home tax without a clear picture of the landscape.
“My concern is this isn’t costre coverable,” Coun. Chad Collins said, noting only a “handful” of vacant homes in his eastend/Stoney Creek ward.
Likewise, Coun. Lloyd Ferguson said he saw “no reason” for such a tax in Ancaster, where developers have bought vacant homes to demolish.
But Coun. Maureen Wilson said the city should examine every possible tool to tackle the unfolding affordability crisis. “I think it’s absolutely worthy of further examination.”
Mayor Fred Eisenberger argued the proposal resembled a “solution looking for a problem, rather than the other way around.”
Short-term rentals like Airbnb keeping apartments offline are a “much more significant problem,” he said.
A staff report on a licensing policy for short-term rentals is expected later this year, noted Jason Thorne, general manager of planning and economic development.