Ford’s Bill 23 will mean higher property taxes for existing Brampton homeowners

If you are a residential property owner in Peel Region, then you will be paying more property tax in the coming years if the Provincial Government’s Bill 23, New Homes Built Faster Act is passed by the Ontario legislature. Bill 23 is the Ontario Government’s response to home affordability. It is intended to make it easier and more profitable for developers to build new housing. The logic is that increased supply will reduce the pressure that is driving up home prices. This makes sense on the surface. But there are huge implications and unintended consequences of the approach this legislation is using to achieve the government’s aim.

Bill 23 will drive development of all home types, but will especially encourage single-unit detached homes. The latest, Nationwide and Zoopla house price index, reports that detached and semi-detached housing are the most in-demand property types. Developers will respond to this demand by building more single-family detached or semi-detached units, unless they are encouraged or mandated to do otherwise. The problem is, this type of housing is unsustainable, economically, socially and environmentally.

In 2018, the Organization for Economic Cooperation and Development, OECD, published, “Rethinking Urban Sprawl, Moving Towards Sustainable Cities”. The report analysed data from more than 1,100 urban areas in 29 countries over a 24 year period. It offers a startling perspective on the environmental, social and economic consequences of urban sprawl type development.

According to Ioannis Tikoudis, one of the report’s co-authors, “The cost [to municipalities] of providing schools, roads and utilities could be more than three times higher in areas where the density is low”, Single-family homes are also the most costly for a developer to build as they consume more land per unit and are an inefficient use of labour and construction machinery. Arecent CMHC report states, “it is much easier to move heavy equipment and materials around in an apartment building than it is among houses in a low-rise sub-division“.

Climate change is already having a significant impact on the economics of municipalities across the country. Recent events like the floods in Abbotsford and Port aux Basque, the fires in Lytton and the tornadoes in Barrie are costing municipalities $Billions in infrastructure damages and disaster relief. Low density communities contribute massively to carbon emissions that cause further climate risk. They cannot support adequate public transit, making them car-dependent. In Brampton, transportation already accounts for just under 60% of the city’s carbon emissions. More low-density development will make the situation worse.

According to an analysis by Urban 3, a consulting company that helps cities understand the economic impact of development, higher density, typically lower income, neighbourhoods in a city actually subsidize lower density often more affluent areas. The property tax revenue generated from these urban-sprawl housing developments is insufficient to pay for the on-going maintenance expenses of roads, sewers, recreation centres and other public infrastructure. As cities add more sprawl around their higher-density cores, their financial situation worsens with aging infrastructure in desperate need of repair and not enough revenue to maintain it. Already nearly half of Ontario’s municipal infrastructure is in need of repair. The cost is estimated at $52B. More low-density development will only add to that financial burden which will have to be addressed sooner than later.

Many cities in North America are already going broke while others are on the financial brink. All it takes is a pandemic disruption to normal revenues, to put a city like Toronto into a economic hole from which it may not emerge. Toronto, like all cities in Ontario is legally obligated to balance its books each year. But, Toronto, this year, is facing a budget short-fall estimated at $815M. Unless it can get a bailout from another government layer, Mayor Tory has only two options to make up the difference; either raise property taxes or drastically cut services.

Cities like Mississauga and Brampton have been relying on development charges to help keep them financially solvent, even in the face of COVID. Development charges are a fee the developer must pay in return for permits on new development projects. Historically, these fees go into municipal coffers and are used to build roads, trails, utilities and transit to connect the project to city infrastructure. It’s used to amass property for parks and to build recreation centres and other amenities. It’s also used as an economic war-chest so the city can pay for on-going maintenance, and survive an economic downturn or a pandemic.

Bill 23 threatens an end to this type of city fiscal planning. Under the legislation, development charges will be reduced or eliminated, particularly where the project includes social housing. And the municipality will be required to spend at least 60% of the collected revenues within the year it was collected. No more ability to amass funds for a large infrastructure project, pay for future maintenance or save for a rainy day.

And. when the city starts running out of developable land, which Brampton will do in the next decade, most development charges will dry up just as the cost of infrastructure maintenance rises. This is why mature cities like Toronto are running into financial problems pandemic or not. And even newer cities like Mississauga have recently had to resort to debt-financing to pay their bills. Debt-servicing costs must be borne by the existing tax base.

Bill 23 also prevents expert consultation from the Conservation Authorities on the impact of developments regarding loss of ecosystem services including water quality and habitat. As Conservation Authorities lose their expertise in these areas, municipalities like Brampton that want to uphold green building standards and meet emissions reduction targets will have to hire their own staff at significant increased cost.

All these costs will eventually be borne by Brampton property owners regardless of the Mayor’s promise to hold the line. There are better options for achieving affordable housing in Ontario. Please tell your MPP, Bill 23 needs a major rethink.

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