Can LRT spell tax relief?
Everyone agrees LRT would be the largest and most complex infrastructure project in Hamilton’s history. But local politicians disagree over nearly every other detail of what the $1-billion, provincially funded light rail transit line would mean to the city.
That conflict comes to a head Wednesday – with $30 million-and-counting already spent – when council votes on whether to move LRT ahead. A vote in favour would allow project procurement to start this summer. A “no” vote threatens death-by-delay for LRT with a provincial election looming in 2018.
Ahead of the vote, The Spectator launches a three-part look into what the light rail project should mean to Hamilton residents.
ON THE SURFACE,
Lloyd Ferguson seems an unlikely LRT champion.
The Ancaster councillor defends the rights of drivers to motor unimpeded through the lower city, scolds downtown colleagues for “choking” arterial streets with bike lanes and opposes equal transit tax rates in the old city and suburbs.
Yet Ferguson is an evangelist for building an 11-kilometre light rail transit line on the lower city’s busiest westbound artery from McMaster University to the Queenston traffic circle.
He is also unique as the only LRT booster among suburban councillors poised to vote Wednesday on
whether to move the $1-billion project ahead.
“I talk to my residents about it. I say, ‘What will LRT do for you personally?’ Maybe nothing. Maybe you’ll never even ride the thing,” Ferguson said. “But if you don’t like the taxes you’re paying or the way they’ve gone up over 30 years, then you should like this project… It’s the reason the suburbs should support LRT.”
With a big vote and contentious poll results looming, LRT supporters are increasingly trying to explain how light rail transit would benefit suburban and Mountain residents who don’t live anywhere near the proposed line.
Here’s a pre-meeting primer on two of the big arguments — development-related tax relief and provincial infrastructure replacement.
LRT tax break?
THE CLAIM: Development along the lower city line will translate into tax relief for suburban homeowners from Stoney Creek to Binbrook to Ancaster.
THE EXPLANATION: Done right, light rail transit is a magnet for high-density redevelopment. That ideally means more people living, working and paying taxes along the line — in turn, easing the tax burden on existing residents across the city.
Here’s a real-life example of the ideal scenario. Coletara Developments is planning a 20-plus-storey highrise atop a new All Saints Church at the corner of King Street West and Queen Street South.
The land was formerly exempt from property taxes as a standalone church but is worth hundreds of thousands of dollars annually in new taxes if the project is successful. The developer, Paul Kemper, has said “we wouldn’t be building” without LRT.
The other carrot for non-lower-city residents is a (possible) tax shift. If property values along the LRT line rise faster than the city average, nearby
homeowners pay a higher proportion of taxes.
The recent real estate boom in Hamilton shows how it works. This year, Wards 1 through 3 face an average tax hike of 4.5 per cent as a result of spiking reassessment, compared to average hikes of 0.7 per cent and 1.5 per cent in urban Glanbrook and Ancaster. In 2012, that trend was essentially reversed.
THE OPPOSING VIEW: Critics argue Hamilton real estate is already hot and attracting fleeing GTA residents without digging up the lower city for LRT. New buildings along a single transit line would have a negligible impact, they say, on citywide tax assessment (early suggestions pegged it at around three per cent growth over 15 years) compared to the disruption of construction and traffic snarls.
Skeptics also suggest repeated provincial changes to the original route have diluted the development potential of the route. Two examples: a shortened east-west line excludes major commercial and transit hub Eastgate Square (and cuts Stoney Creek out of the line, its councillors note). Another stop once eyed for private development, Scott Park, is now slated for non-taxable school and rec centre construction.
The Spectator will look at LRT development possibilities in a Tuesday story.
THE HISTORY: When councillors first voted in 2013 to ask Ontario to fully fund capital costs for LRT from the university to Eastgate Square, the city and Canadian Urban Institute painted a “conservative” economic benefits picture that looked like this: 3,000-plus local construction jobs,
hundreds of new permanent jobs; Triple the number of developments along the Main-King corridor compared to no LRT; $30 million in anticipated building related fees for the city; $22 million in new taxes paid by condo dwellers and businesses and $29 million in increased assessed
value on properties on or near the
line.
QUOTE TO CHEW ON: “As a city, we already rely too heavily on residential assessment for growth. We’re not going to solve that problem by building new apartments on a transit line.” — Coun. Chad Collins
Free infrastructure?
THE CLAIM: The $1-billion LRT project will use provincial cash to replace 11 kilometres of infrastructure in Hamilton. If we did it ourselves, the same work would cost local taxpayers $200 million.
THE EXPLANATION: This is true, with some important caveats. Metrolinx has agreed to pay to replace all “likefor-like” city infrastructure along the 11-kilometre LRT line. That’s sidewalks, street asphalt, sewers, water pipes, light standards — even the repair or replacement of the Longwood bridge, which will host a spur to a new storage facility.
But the city must share the cost of any upgrades — for example, bigger water or sewer pipes. Such upsizing is necessary given the expectations for higher-density development on the route and could cost as much as $35 million. The city hopes to get around those shared costs by pitching consolidation, rather than upsizing, of some underground pipes.
Regardless, project fans point out we’re still getting plenty of mostly free new infrastructure — or we’re
sharing the cost with all Ontario residents, anyway. We’re certainly getting a sweeter deal than local taxpayers in Kitchener-Waterloo, who had to put up a third of capital cash for their 19kilometre, almost-finished LRT line.
The infrastructure argument is big in Hamilton because we fall behind on needed repairs and replacement of roads, bridges and buildings each year by $195 million. Meanwhile, the city has added about $13 to the average homeowner’s tax bill each year since 2011 specifically to help close that spending gap.
THE OPPOSING VIEW: Skeptics among councillors argue multi-year LRT construction will dig up plenty of infrastructure that doesn’t actually need to be replaced at all. The city admits many underground pipes along the route, for example, have been recently relined or replaced.
They also point out correctly very little of the LRT-affected infrastructure is included on the 10-year capital priority list. (This is likely good news for the city, however, because Metrolinx has confirmed it won’t pay full replacement costs for any project the city has already budgeted for.)
QUOTE TO CHEW ON: “It would be a betrayal of all Hamilton residents to not support the renewal this project brings, given our mammoth infrastructure deficit.” — Coun. Sam Merulla
Skeptics suggest provincial changes to the route diluted its development potential