Let’s duck the housing development tax

Hey there, time traveller!
This article was published 15/11/2013 (4353 days ago), so information in it may no longer be current.

Dear Editor:

I would like to respond to Deepak Joshi’s Nov. 12 editorial, City can justify development fee on homes. It is very unusual for a chief administrative officer to wade into a policy debate by writing an opinion piece on a new tax on homebuyers, especially before it has even been debated by council. But let’s be frank, this is not the first time that the administration appears to have extended its role of late.

Development charges are a tax, plain and simple. The proposed new tax comes down to the old adage: if it looks like a duck and quacks like a duck, it’s a duck. This new tax will cost new-home buyers an additional $10,000 to $12,000. This along with the recent PST increase that will add $2,200 to the cost of a new home in Winnipeg.

The cost of home ownership in the city will be less affordable for homebuyers deciding whether to build within — compared to outside — the city.

It has also been confirmed to council that this new tax will drive up the cost of existing homes in Winnipeg, thus making the whole market less affordable for Winnipeg homebuyers. This is probably why Mayor Sam Katz’s own infrastructure funding council specifically recommended against development cost charges as a method of funding infrastructure.

Another argument by the mayor and supporters of the new-home buyer tax is that municipalities in the surrounding region already have development taxes. What they don’t tell you is that new-home buyers in Winnipeg already pay for additional infrastructure requirements like transportation, land drainage and higher development standards that people in the surrounding municipalities aren’t required to pay. In terms of road infrastructure, provincial highways function as arterial roads in the rural municipalities. In Winnipeg, homebuyers pay for 50 per cent of arterial roads plus 100 per cent of intersections on their purchase price. In the RMs, homebuyers basically pay nothing. Rural municipalities do require some intersection upgrades but not to the same standard as in Winnipeg.

Development standards in general are typically lower in rural municipalities than in Winnipeg. In rural municipalities, drainage is via an open ditch, not in buried pipes with the ditch providing the storage. Pavement standards are also often lower as well, with asphalt curb and gutter compared to concrete.

The proposed tax cannot be compared to rural development cost charges when one considers the current costs that homeowners already have to face in Winnipeg.

The new-home buyer tax is bad public policy and needs to be rejected before you hear a giant sucking sound of people and investment dollars leaving the city for surrounding municipalities. Another tax will put our city at a competitive disadvantage with our neighbours and lead to sprawl as development takes the shape of a large doughnut around the city.

Scott Fielding is the city councillor for St. James-Brookland-Weston.