City considers expanding seismic tax breaks on heritage buildings

The 10-year tax holiday Victoria provides for the seismic upgrade of downtown heritage buildings will soon be applied to heritage buildings city-wide.

Councillors have told staff to investigate the city’s authority to expand the program even further — exploring opportunities for tax breaks for seismic upgrades of rental buildings as part of a rental retention strategy.

Under the existing policy, private-property owners of commercial, industrial and institutional heritage-designated buildings within downtown can apply for property tax exemptions for up to 10 years to offset the cost of seismic upgrading.

A recent seismic vulnerabilities assessment found that about 30 per cent of the city’s building stock has a greater than five per cent probability of complete damage from an earthquake over the next 50 years, city staff have told councillors.

Coun. Charlayne Thornton-Joe said reading the report was “scary.”

“Because it’s an awakening and a constant reminder that we’re in a seismic area and it’s not if we have an earthquake it’s when we have an earthquake,” she said.

“Unreinforced masonry buildings of all heights are highly susceptible to earthquake damage throughout all areas of the city. Pre-1972 low-rise concrete/steel buildings and three- to four-storey wood apartment buildings are at high risk of complete damage, especially in areas of the city where there are soft soils,” the staff report said.

The study highlighted Fairfield, Gonzales and James Bay “as particular trouble spots where many older wood frame buildings and concrete buildings are located on soft soils.”

“Finally, low-rise pre-1960 single family dwellings with structural deficiencies are at high risk no matter what type of soil they are on,” the staff report said.

City staff said the existing incentive program has seen the seismic upgrade of 43 of the 205 heritage buildings downtown in the past 17 years.

Offering the tax break does not result in a drop in tax revenues as it immediately shifts the tax burden to other like properties. The retrofitted buildings generate more tax revenue in the long term because once the 10-year tax holiday ends, they pay substantially more taxes because of higher assessments, said city staff.

Preparing the city for a major earthquake will be a long process “and sometimes it will be a painful one,” said Coun. Geoff Young.

“The fact is renewing buildings does have costs, financial and human,” Young said.