Council debates taxing vacant homes in Hamilton, but some say the problem isn't big enough

Hamilton will keep exploring the idea of taxing vacant homes in the city, but some council members are questioning if the problem is really that bad,and whether it wouldend up costing the city money.

While Vancouver and Toronto have beenthe "first to dip their toes in the water" on this tax, Coun. Chad Collins (Ward 5) said the citiesalso have vastly different markets than Hamilton, with differing amountsof tourists, secondary properties, and investment properties.

"It's a bit of an apples to oranges comparison," he said.

The decision to continue looking into a possible taxpassed on a vote of nine to three, with councillorsLloyd Ferguson (Ward 12), Judi Patridge (Ward 15), and Collins opposed.

'Unchecked' markets

A vacant home tax would apply to residential properties only. According to Brian McMullen, general manager of finance and corporate services, there are currently 234 of these on the city's vacant lands registry.

Vancouver has already implemented a tax to tackle owners buying properties as investments, and Toronto approved its plan in December 2020. Ottawa is alsolooking into the idea.

Coun. Nrinder Nann (Ward 3) said the tax has helped get affordable rental units on the market in Vancouver. Nann said she was ready to "make the leap" to see if Ontario's Minister of Finance would give Hamilton permission to proceed with a tax.

But seeing disagreement from council, that part was left out of her motion.

She said Hamilton must make "very strategic decisions about what we can do to prevent us as a mid-sized city in Canada having the same outcomes that Toronto and Vancouver experience when their market went unchecked for decades."

A benefit of the tax, McMullen said, would be that the properties that are truly vacant would be cleaned up and available.

When it comes to revenue, he said Vancouver has generated over $36 million each year from 2017 to 2019 througha one per cent tax rate.Toronto hopes to generate between $55 and $66 million.

Cost concerns

Using that rate, a city report says Hamilton could reach revenues of $6.7 million but only if one per cent of the city's residential properties are vacant. The234 vacant properties that the city knows about right now would only generate about $900,000 in revenue, he said.

Collins said he's concerned that it might cost more to run the program than the revenue it would create.

"I'm not certain that the number of units that we've 'guess-timated' in the report truly reflects what is vacant in the community," he said.

McMullen said it cost Vancouver $7 million to implement the tax, andToronto is estimating $10 to 15 million. Operating costs in Vancouver are $2.9 million a year, he said.

"I don't know why we're going down this road," Ferguson said. "In my particular ward, I have no reason to do this."

But Nann said she gets emails "constantly" about vacant properties in her ward, and that the issue is growing.

Councillor Maureen Wilson (Ward 1) said finding vacant homes would be like "peeling back the onion." Once you start developing criteria, she said, they appear.

Mayor Fred Eisenberger said there seemedto be a "solution looking for a problem rather than the other way around."He said the registry was, in part, already an incentive for properties to not be vacant.

Vacant lands registry

Jason Thorne, general manager of planning and economic development, said owners pay $300 to be on the vacant lands registry,plusan annual cost of $750, and a fee if there are extra buildings on the property.

Quarterly inspections of other vacant properties are $300, he said.

He said the number of vacant properties on the list fluctuates, and that there's a "slight upward trend." Staff have typically identified most of them, he said, but sometimes the public tells them about properties that should be added.

The list includes a mix of buildings, he said, with some being vacant for a number of years. He said owners might not have immediate plans, or the plans might beyears down the line. In some cases, Thorne said, the owners might sit on vacant properties while they put together a larger parcel.

He believed the 234 properties included those acquired by Metrolinx during LRTplanning.

Staff report back in June

If the city implemented a tax, McMullen said, one option would be to have property owners declare whether their properties are vacant or not.

"It's not an easy, quick process," he said, noting that some people would make appeals.

There would also be exemptions, such as death of the owner or major renovations.

The province's Ontario Fair Housing Plan in 2017 listed the tax as an action for Toronto and "other interested municipalities" to address residential units potentially being left vacant by speculators.

Staff will investigate more into how much money is being collected through the list, how the city finds out what properties are vacant, and whether a tax would help identify other vacant homes that might be out there.

They'll report back in June.