Tag Archives: Canadian Cities

Property owners dinged twice

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The City of Winnipeg plans to launch an internal review after auditors discovered a local developer was able to collect

$250,000 by effectively double-charging property owners for land-drainage work.
In a damning report, city auditors uncovered a total of eight cases where developers used an obscure mechanism called an

“inside-development local improvement” to collect money from property owners without providing anything in return.
The auditor’s report, published by the city late Friday, looked into Winnipeg’s local improvement process, which allows

citizens or developers to initiate construction projects that otherwise wouldn’t be included in the city’s infrastructure

plans. Local improvements typically involve small projects, such as sidewalk paving or decorative street lamps.
Under a local improvement, the city or a contractor conducts the work up front and adds the cost to property tax bills. City

auditors examined 148 such improvements between 2005 and 2009, including 84 initiated by developers.
In eight of these cases, developers — none identified by name — received city approval to begin local improvements for

land-drainage work on parcels of land owned entirely by the developer. In these cases, the eventual buyers of the properties

had no idea they would begin paying additional property taxes and got nothing in return, the auditors contend.
“Under the arrangement in question, the sole benefit of the tax goes to the developer because all of the local improvement

taxes are remitted back to the developer,” audit manager Bryan Mansky writes.
“We believe it is quite reasonable to assume that the final property owner may pay for the cost of the infrastructure

elements twice: once in the lot price and then again through the local-improvement taxes imposed.”
He and his fellow auditors “were unable to ascertain the reason for this type of arrangement,” which does not appear to exist

in other Canadian cities.
Even in Winnipeg, “inside development local improvements” are rare. The city approved no such arrangements between 1975 and

2002, when a developer succeeded in imposing extra taxes to pay for land-drainage sewers at a downtown infill project, the

auditors write.
The same developer requested this clause be added to development agreements seven times between 2002 and 2006. That year, a

city property official finally challenged a request for a local improvement levy on land-drainage sewers for a new

subdivision.
Land drainage is considered basic infrastructure, not an improvement, the official argued. But the developer successfully

argued a precedent had been set.
The developer also said the arrangement would make the resulting properties more affordable for young families. Auditors

found this wasn’t the case, since the properties were eventually assessed at $340,000, well beyond the range of many

first-time homebuyers. There was also no evidence the tax was used to reduce the price of the lots.
In this one instance, the developer gained an additional $250,000 after each homebuyer was slapped with an additional $2,036

worth of property taxes. This cost should have been included in the lot price, the auditors suggest.
“Since the installation of the basic infrastructure elements was already specifically required by the development agreement,

there is no additional benefit provided to the new property owners,” the report states.
City auditor Brian Whiteside declined to name the developer. The only way purchasers of his properties would know they were

about to pay for basic infrastructure twice was if their lawyer phoned Winnipeg’s senior local improvement clerk, the

auditors write.
Council was also left in the dark. The auditors found eight cases where the “inside-development” clause was added to

development agreements without council approval.
City council property chairman Jeff Browaty (North Kildonan) said the city will probe all of these cases and pledged to head

the review.
“If at some point council didn’t know about it, that’s a problem,” he said, but he also said individual city councillors

“sometimes do their own thing” with developments.
Browaty declined to name those councillors.
The property chairman also said he knows of Winnipeg subdivisions where all of the basic infrastructure has been put in as

local improvements. New standards must be created to improve transparency, he said.
“If at some point in time a purchaser is purchasing a property and there’s something they’re not being told openly and

honestly and the assessment hasn’t come through, that’s also a problem,” Browaty said. “We’re going to make things a little

more consistent across the board.”
The auditors’ report came before city council’s executive policy committee in July 2010, but Mayor Sam Katz’s inner circle

chose to lay it over until November. EPC approved the report on March 16. It comes before council as a whole on March 23.

http://www.winnipegfreepress.com/local/property-owners-dinged-twice-118349194.html

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August Canadian Housing Market Performance

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August home price value jumped 0.2 per cent from July statistics— a clear indication that home prices is moderating across Canada, based from the recent Teranet-National Bank composite home price index.

According to the authors, for the second consecutive month, home value did not rise from the month before in all six markets. The trend of Canadian home prices has been different in every region, there was a noted decline in Calgary and Vancouver while on opposite direction in Toronto, Montreal, Halifax and Ottawa.

See the price gain in these 6 major Canadian cities based from the data gathered from public land registries:

clip image002 thumb August Canadian Housing Market Performance

Results had shown that home value was up 10 per cent in August compare to the previous year. Although majority were gained in the first half of the year.

Buyers rushed into the market amid fears of higher interest rates, tighter mortgage rules and a new harmonized sales tax in B.C. and Ontario—one good explanation why home prices inflated quickly at the beginning of the year. However, the market went on the opposite by spring which was supposed to be the busiest period.

According to a Royal Lepage poll, housing prices drop as well as the sales in the third quarter and increases in housing slowed to a more normal 5 per cent rate year-over-year. The Canadian Real State Association said in its monthly report that home prices in September were little changed from last year at $331,089.

Despite the weak market condition, prices continue hover record highs, which may place the country in a housing bubble. Canadian homes may be overhauled and that home prices drop could more sharply than expected. If this takes place it would exacerbate growing debt burdens that households are facing, said Bank of Canada Governor, Mark Carney.

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REALpac, tax watchers to ensure balance and fairness

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The “2010 Property Tax Rate Analysis” was released by the The Real Property Association of Canada (REALpac) illustrating the 8th annual survey of property taxes in the entire country. This was prepared by the Altus Group showing the property tax assessment of both residential and commercial across the country. The result of survey conveys the rise and fall of city taxes to monitor weather there is an imbalanced business going.

“REALpac continues to call on all municipalities to ensure that commercial and residential property tax levels are balanced and fair,” said Michael Brooks, Chief Executive Officer of REALpac.

The result shows that Vancouver still holds the place for the worst commercial to residential property tax ration in Canada for the fifth consecutive year now, with 4.42 to 1. However, Montreal had a 15 per cent raise in their commercial and residential property tax ratio for over two years. While Toronto and Vancouver drop to 8 and 9 per cent respectively over the same time frame.

Outside of the top three, Winnipeg, Edmonton, Calgary, and Halifax yielded ratio increases of 6.8%, 0.4%, 1.7%, and 1.4% respectively from 2009-2010. Ottawa posted a ratio decrease of 3.4% over the same period.

REALpac members value tax fairness. REALpac has incessantly advocated that continued reduction of the excessive property tax burden on commercial and industrial tenants and landlords will make Canadian cities more competitive and promote jobs and investment. Greater encouragement of commercial business and investment in the property assessment base will generate more stable and sustainable revenue for all cities.

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City talks taxes on new interactive website

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The mystery behind where Calgarians property tax dollars are going can now easily be solved with a new website launched by the city.

The Tax Talk website, launched on the eve of Calgary’s 2010 budget discussions, is intended to “help Calgarians understand where their tax dollars go,” according to a statement released by the city.

“It is an excellent tool for Calgarians to put their property tax in perspective,” said Gord Lowe, chairman of the city’s finance committee.

With a proposed increase of at least 4.8 per cent on property tax coming with council’s budget decisions, the Tax Talk site comes at the right time to answer basic questions Calgarians may have, Lowe said: “With the ability to measure their property tax against 14 other Canadian cities, Calgarians gain an important look at how they sit in relation to the rest of the country.”

The site enables Calgarians to enter the amount of property tax they pay and then breaks down that amount, dollar by dollar, into how much each citizen contributes to specific city services.

http://www.metronews.ca/calgary/local/article/370275–city-talks-taxes-on-new-interactive-website

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Canada’s 1M+ Club: Which Canadian Metros Have An Urban Sprawl Problem?

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Urban sprawl in Canada is becoming a serious problem.  Cities across Canada continue to expand their urban footprint and property taxes are rising above and beyond inflation – there seems to be a direct correlation between these two and there seems to be no end to this trend.
Statistics Canada recently released its post-2006 census population estimates for major Canadian CMAs (Census Metropolitan Areas).  The estimates include revisions for the census undercounts, i.e. the estimated number of estimated individuals that didn’t partake in the 2006 Census.  Canada now has six cities with a population of over 1 million inhabitants: Toronto, Montreal, Vancouver, Ottawa-Gatineau, Calgary, and Edmonton.  Each one of these major Canadian metros is growing at different pace and most are continuing to experience urban sprawl and tax rate hikes beyond inflation.
Urban sprawl has become a significant issue in most major Canadian cities and is likely a major cause for our city tax hikes.  When a city sprawls, the city’s got to pay for infrastructure to service these remote areas including sewers, roads, transit, garbage collection etc.  So which cities are doing a better job of controlling sprawl?
The image above is a visual representation of the urban footprint of our Canadian 1M+ club and is produced from Google Maps’ satellite view (using a consistent aerial elevation).  The images are not totally accurate, but are a decent representation of the urban footprint of our major metros.  Based on these images, it is apparent that some cities are doing a better job of controlling urban sprawl than others.
Calgary and Edmonton are the most rapidly growing Canadian metros (from a growth % perspective).  Calgary however seems to have a major urban sprawl issue – with 1.18M inhabitants, its urban map has clearly sprawled out further than its similar population-sized counterparts Ottawa-Gatineau and Edmonton.  Ottawa-Gatineau’s greenbelt, which was originally implemented to control urban sprawl, has clearly contained the inner core of the city resulting in a dense inner city but has not prevented the emergence of distant suburbs such as Kanata, Orleans, and South Nepean (Barrhaven) from forming.
Vancouver appears to be doing the best job in controlling sprawl.  High rise condos have led to a highly populated centre core that has greatly contained this 2.27M metro.  Toronto clearly has the worst urban sprawl problem – with 5.53M in the GTA (Greater Toronto Area), the city’s boundaries continue to push further out in all directions.  Recently, the Ontario Government implemented a new greenbelt around the GTA to protect environmental areas and curb the sprawl.  This is probably a step in the right direction as GTA commuting times are growing exponentially resulting in a growing environmental problem.  Further, the GTA faces an ever-expanding wish list of expensive infrastructure projects that will cost the Ontario tax payer big $ over the coming decades.
Montreal’s population growth has slowed dramatically over the last two decades likely in part due to the separation movement in Quebec which drove out major headquarters to Toronto and other metros.  Once Canada’s most populous metro, population growth has resumed in Montreal and the city continues to face a major sprawl issue, The severity of Montreal’s sprawl has likely been curtailed over the last few decades by the confines of the island – the majority of Montreal’s population lives on an island which acts as a physical barrier to sprawl (similar to a greenbelt).
So which 1M+ Canadian metros have done the best at controlling urban sprawl?  Here are my rankings:
1. Vancouver
2. Edmonton
3. Ottawa-Gatineau
4. Montreal
5. Calgary
6. Toronto
How can cities fight urban sprawl?
There are a number of ways to do it but here are some popular methods: denser inner city cores with more high rise residential buildings, higher development charges for suburban development, cheaper development charges for inner city development and proximity to public transit, strict enforcement of land zoning to prevent zoning amendments, cheaper property taxes in the inner city, and the implementation of greenbelts and environmentally protected areas surrounding our metro areas.
http://network.nationalpost.com/np/blogs/executive/archive/2009/10/11/canada-s-1m-club-who-s-got-an-urban-sprawl-problem.aspx

Urban sprawl in Canada is becoming a serious problem.  Cities across Canada continue to expand their urban footprint and property taxes are rising above and beyond inflation – there seems to be a direct correlation between these two and there seems to be no end to this trend.

Statistics Canada recently released its post-2006 census population estimates for major Canadian CMAs (Census Metropolitan Areas).  The estimates include revisions for the census undercounts, i.e. the estimated number of estimated individuals that didn’t partake in the 2006 Census.  Canada now has six cities with a population of over 1 million inhabitants: Toronto, Montreal, Vancouver, Ottawa-Gatineau, Calgary, and Edmonton.  Each one of these major Canadian metros is growing at different pace and most are continuing to experience urban sprawl and tax rate hikes beyond inflation.

Urban sprawl has become a significant issue in most major Canadian cities and is likely a major cause for our city tax hikes.  When a city sprawls, the city’s got to pay for infrastructure to service these remote areas including sewers, roads, transit, garbage collection etc.  So which cities are doing a better job of controlling sprawl?

The image above is a visual representation of the urban footprint of our Canadian 1M+ club and is produced from Google Maps’ satellite view (using a consistent aerial elevation).  The images are not totally accurate, but are a decent representation of the urban footprint of our major metros.  Based on these images, it is apparent that some cities are doing a better job of controlling urban sprawl than others.

Calgary and Edmonton are the most rapidly growing Canadian metros (from a growth % perspective).  Calgary however seems to have a major urban sprawl issue – with 1.18M inhabitants, its urban map has clearly sprawled out further than its similar population-sized counterparts Ottawa-Gatineau and Edmonton.  Ottawa-Gatineau’s greenbelt, which was originally implemented to control urban sprawl, has clearly contained the inner core of the city resulting in a dense inner city but has not prevented the emergence of distant suburbs such as Kanata, Orleans, and South Nepean (Barrhaven) from forming.

Vancouver appears to be doing the best job in controlling sprawl.  High rise condos have led to a highly populated centre core that has greatly contained this 2.27M metro.  Toronto clearly has the worst urban sprawl problem – with 5.53M in the GTA (Greater Toronto Area), the city’s boundaries continue to push further out in all directions.  Recently, the Ontario Government implemented a new greenbelt around the GTA to protect environmental areas and curb the sprawl.  This is probably a step in the right direction as GTA commuting times are growing exponentially resulting in a growing environmental problem.  Further, the GTA faces an ever-expanding wish list of expensive infrastructure projects that will cost the Ontario tax payer big $ over the coming decades.

Montreal’s population growth has slowed dramatically over the last two decades likely in part due to the separation movement in Quebec which drove out major headquarters to Toronto and other metros.  Once Canada’s most populous metro, population growth has resumed in Montreal and the city continues to face a major sprawl issue, The severity of Montreal’s sprawl has likely been curtailed over the last few decades by the confines of the island – the majority of Montreal’s population lives on an island which acts as a physical barrier to sprawl (similar to a greenbelt).

So which 1M+ Canadian metros have done the best at controlling urban sprawl?  Here are my rankings:

1. Vancouver

2. Edmonton

3. Ottawa-Gatineau

4. Montreal

5. Calgary

6. Toronto

How can cities fight urban sprawl?

There are a number of ways to do it but here are some popular methods: denser inner city cores with more high rise residential buildings, higher development charges for suburban development, cheaper development charges for inner city development and proximity to public transit, strict enforcement of land zoning to prevent zoning amendments, cheaper property taxes in the inner city, and the implementation of greenbelts and environmentally protected areas surrounding our metro areas.

http://network.nationalpost.com/np/blogs/executive/archive/2009/10/11/canada-s-1m-club-who-s-got-an-urban-sprawl-problem.aspx

Property Tax Assessments to be Mailed Soon

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Dare to compare

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Is mayor’s claim of lowest taxes true?

Mayor Sam Katz claims Winnipeg has the lowest municipal property taxes in Canada.

He argued that in a Winnipeg Sun column Friday, saying that when you compare municipal property taxes and utility costs such as sewer and water rates among Canadian cities, Winnipeg has the lowest taxes in the country.

Is that true?

Well, yes and no.

Katz was quoting from the City of Edmonton’s annual property tax survey. It’s one of the more popular and credible cross-country comparisons of property taxes.

The data used by Edmonton’s planning department is sound. And they do a pretty good job of defining the statistics they use and explaining the caveats and inconsistencies that go along with them.

But the truth is, the data they use is extremely limited and doesn’t really provide a full comparison of property taxes between cities.

In some cases, they even measure costs that have nothing to do with municipal taxes and utility charges.

Which means the numbers they produce, while interesting to track from year to year, really don’t give us a true picture of how Winnipeg’s property taxes compare with other cities.

For starters, the survey only measures one type of house.

The sample home in the survey is defined as the following: “A twenty-five to thirty-year-old, single-detached, three-bedroom bungalow with a main floor area of 1,200 square feet, a double car garage and finished full basement, on a 6,000 square-foot lot located in an average neighbourhood of the city.”

That sample house was picked because it represents the most common type of house in Edmonton. But it may not be the most common type of house in Winnipeg or any other city.

If you do live in a house that’s similar to that description, the survey is useful.

But if you live in a new 1,800 sq.-ft, two-story home or a 2,000 sq.-ft bungalow with four bedrooms, it’s not terribly relevant.

The other problem with the Edmonton survey Katz refers to is that it includes some costs that have nothing to do with what the city charges us in taxes and utilities.

The category Katz uses includes utility charges. But the survey lumps in costs such as telephone and electricity rates as utilities, which are irrelevant when it comes to property taxes and municipal utility charges.

For example, Manitoba has the lowest electricity rates in the country, which artificially improves our standing in the category Katz is using.

Also, there are other ways of comparing property taxes among cities beyond using a single sample home that the survey does not capture.

One way is to measure taxes as a percentage of what a house is worth.

For example, a $200,000 house in Toronto pays $1,222 in municipal property taxes. A $200,000 house in Winnipeg pays almost double that at $2,290 in municipal taxes.

Obviously a house for $200,000 in Toronto is going to be a shack and the one in Winnipeg will be a half-decent 1,200 sq.-ft home. But as a percentage of the value of the home, taxes are much higher in Winnipeg than in many other cities.

None of this should diminish the progress Katz and previous mayors have made in bringing property taxes down in Winnipeg compared with other cities.

Most other cities have been raising taxes and by freezing ours, there’s no doubt we’ve made some headway.

But do we have the lowest municipal property taxes in Canada?

That’s debatable.

http://www.winnipegsun.com/news/2009/03/15/8760266.html#/news/columnists/tom_brodbeck/2009/03/15/pf-8754736.html

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