A York Region initiative to impose a vacant housing tax on properties to support affordable housing initiatives has received support from the Aurora Council.
The Regional Council recently gave the green light to a feasibility study for a so-called “vacant housing tax” intended to “improve the availability of rental units” in York Region while funding affordable housing projects.
Such a tax on vacant properties could be set between 1 and 2 percent and, depending on the region, could generate between $ 15 million and $ 90 million each year which would, in turn, be reinvested in affordable housing initiatives.
“The need for more affordable housing options in York Region is well established,” said a report to Regional Council. “Complete communities include rental and owned housing options that meet the needs of residents of all ages, stages and abilities. A variety of affordable housing options support economic development, contribute greatly to individual and community health and well-being and, as communicated to Council in January 2021, is needed to support the Official Plan’s growth projections. regional.
“The annual affordable housing monitoring exercise measures the affordability of new housing against affordability thresholds calculated based on provincial definitions. The 2020 analysis was presented to Council in June 2021 and identified that only 8% of new housing was affordable, well below the affordable housing targets of the Regional Official Plan of 25% in the region and 35% in the regions. centers and hallways.
The supply of housing has “not kept pace with the needs of residents”, it is more difficult than ever for residents to find affordable housing, concluded the Region.
Municipalities like York Region were given the green light to explore vacant housing tax models in 2017, one of 16 measures that were part of the Province of Ontario’s Fair Housing Plan. For municipalities to adopt these measures, a public consultation must take place and a business case must be written.
Toronto and Ottawa are expected to implement a tax next year, and others are in the early stages of determining whether or not that is feasible.
Among the factors considered are the determination and definition of what constitutes a “vacant” home, the circumstances that would require exemptions, and how homeowners might challenge the findings.
“Currently, there is no readily available data to confirm York Region’s aftermarket vacancy rate,” the region said. “Staff used the 2018 and 2020 water consumption levels as a method to estimate potential vacancy rates. Using a 2016 Statistics Canada report that provides an estimate of real estate units occupied by usual residents, an analysis was conducted to isolate vacant units from newly constructed and unoccupied ones to determine the rate of d estimated vacancy in York Region. A vacancy rate of 3% has been calculated… It is recognized that additional work on the part of a consultant will be required to refine the estimated vacancy rates in the secondary market.
“The tax is a political tool aimed at changing the behavior of owners; it should curb speculative activity to help free up more housing units in the secondary market. If successful, the vacant home tax would likely be a declining revenue stream, as homeowners would either occupy or rent their homes to avoid the tax. ”
While it remains to be seen whether such a model will be successful in York Region, Aurora Council members said it was an idea worth exploring.
“I was really happy to see that there was going to be a study on a vacant housing tax and that all the money that was made would go to affordable housing initiatives,” Councilor Wendy Gaertner said last week. , highlighting the revenues that could be generated by the initiative. “I really hope this study recommends that we have this.”
Support was also offered by Mayor Tom Mrakas, who is Aurora’s only voice at the regional table.
“While the [report] talks about $ 15-90 million in gross income, I agree that’s a big number, and the fact that it was important that we stipulated that the money was reinvested in research the way we can providing affordable housing was a big part [in moving forward], “he said.” At the end of the day, we shouldn’t even be making any money because there shouldn’t be any vacant properties. The idea is that we will eventually end up in a situation where that money would decrease to every time and we would get to a point where we weren’t really getting any income from it because there aren’t any vacant properties.
“In the meantime, let’s use the money and invest it in affordable housing.