A program calling for a property tax freeze for new apartment rental projects in the downtown area moved closer to reality today.
Mayor Sam Katz and his executive policy committee voted to endorse the initiative, which now moves on to council for final approval.
"This program is a great start," to address the shortage of rental accommodations downtown says Coun. Mike Pagtakhan, one of four EPC members who voted to support the program.
The program would give developers a property tax freeze for 12-20 years for the construction of new rental housing units in selected areas of the downtown.
The tax freeze would apply only to the increased property and education taxes that would result from the higher value of the new development. The owner will still be required to continue paying the same amount of property taxes as if no development had occurred on the property.
The proposal is a joint city-province initiative, where the freeze would apply to both municipal and education portions of the property tax.
Taxes for the first 12 years will be frozen for construction in downtown – but not within the new SHED (sports, hospitality and entertainment district) zone surrounding the MTS Centre. The tax freeze would be extended for another four years if the project is built in a strategic area with high visibility and supports adjacent development; two more years, if the project is build on a surface parking lot; and another two years if the project includes a parkade.
Mayor Sam Katz said he believes the proposal fulfills the campaign promise he made in the 2010 campaign to eliminate the glut of parking lots throughout the downtown.
However, the program proposed by the administration isn’t the same as the one proposed by Katz four years ago; Katz promised a blanket five-year freeze on taxes for any kind of development on a surface parking lot and the freeze would only apply to parkades if the structures included retail or commercial development on the main floor.
Katz said the current program is meant to entice property owners to develop surface parking lots with the promise of a long-term tax freeze, adding it will accomplish the same goal as what he had proposed in 2010.
"My commitment was to basically get rid of as many surface parking lots as possible… to get development on the surface parking lots," Katz told reporter following the EPC meeting, adding the success of the program will be judged when it expires in two years time.
"We want people living downtown," Katz said. "Hopefully, the majority of council will say this is positive, let’s try it and see what happens."
But the length of the tax freeze concerned Coun. Jeff Browaty, who voted against it at EPC.
Also in opposition this morning was Coun. Justin Swandel, who was critical that condo projects are not eligible for the tax freeze even though most of them will be rental properties.