Last year at City Budget time, before the pandemic was even named, we asked City Staff to look at whether we should follow the lead of Vancouver and introduce a Vacant Home Tax (VHT). Staff's report on VHT will be discussed at Executive Committee today and debated in Council next week before we break for the holidays.
Any mega-city will have a certain amount of speculation as property values will always be higher than neighbouring markets. Cities like Toronto or Vancouver, often in global top 10 lists of great cities, attract real estate speculation both at home and globally.https://www.thestar.com/news/city-hall/toronto-eyes-vacant-home-tax-though-some-say-it-will-do-little-to-boost-affordable/article_ab7d45c0-0947-5bce-8c0c-c3bca1f7ecb0.html#:~:text=Toronto%20is%20proposing%20a%20tax,as%20%2466%20million%20in%20revenue.&text=At%20a%20rate%20of%20one,year%2C%20according%20to%20the%20mayor.
Foreign investors in the Toronto residential real estate game pay the same property taxes and land transfer taxes as you do. But they can cost you as well — it's great to sell your home for an inflated price, but if foreign speculation drives up prices, where is your next home going to be? If investors leave that property sitting vacant, they are not only shortening supply on the buy/sell market, they are also taking away rental opportunities.
Here’s the thing about applying a steep vacant home tax: it incentivizes owners to activate their empty properties by renting them out or selling them and moving on. In Don Valley North, a number of high-end properties sit empty year after year, leaving the neighbourhood feeling less animated and less safe.https://www.cbc.ca/news/canada/toronto/bridle-path-shooting-life-threatening-injuries-man-police-1.5236065
Nowadays, when careers can take families all over the globe, even high-end properties don’t need to sit empty. The housing situation in Toronto is so tight that there are families in every income bracket looking for homes to rent or own.
There is a word of caution to consider. We shouldn't get used to the revenue generated by the VHT — in fact, the most successful VHT would be one whose revenue shrinks year over year as more empty homes become occupied. In other words, this is not a tax grab designed to balance Toronto’s budget.
In their report, City Staff indicate there's reason to believe the problem has slowed somewhat during the pandemic, as speculators unload their properties in anticipation of a real estate crash.https://www.toronto.ca/legdocs/mmis/2020/ex/bgrd/backgroundfile-158978.pdf
But in Don Valley North, residents report that homes are still empty and they fear the house next door will stay empty long into our post-pandemic economic recovery. That empty house could also become part of another problem as a short-term rental party house.
At City Hall, we have the option of receiving this report on VHT but not taking action until 2022. I hope you will agree with me that we should proceed with a Vacant Home Tax program right now. It will lead to proper investigation and follow-up and the tax can pay for that follow-up. Who knows what else they will unearth — this same investigation team could be the answer to our challenges with Airbnb.
Long-term care advocacy
On a different note, I read a news article with my cornflakes the other day that frustrated me to no end. You will recall that early in this pandemic, I promised you that I would advocate loudly for improvements to long-term care (LTC) in Ontario. I said I wouldn’t forget about it after the crisis had passed.
Here we are, months later, in a second wave of outbreaks and deaths in over 100 LTC homes. Recently, the federal government opened discussions with provincial premiers about increasing funding directly to long-term care. Prime Minister Trudeau indicated these dollars would go towards improving quality of life for LTC residents and ensure employees make a living wage. He made it clear that his goals include a national standard of care in LTC and funding would be contingent on committing to meet those new standards.
However, as reported in the Toronto Star, the premiers of Saskatchewan, Quebec and our own Doug Ford are balking at the idea of having national standards. I say: be afraid, be very afraid. I thought — and I'm sure many of you did, too — that these premiers wanted to improve their systems.
I will be letting our local Member of Parliament, Han Dong, know that I expect his government to attach strings to any funds they are sending to Ontario to improve long-term care homes. You might want to do the same. If the federal government wants to bring their dollars into this field to solve the most glaring failings, they have a right to ensure their investment hit the target. This is the level of accountability the residents of long-term care, their families and employees deserve.
Team announcement Years ago, I went to Deputy Mayor Joe Pantalone to ask if he would promise not to hold it against me if I stole a key member of his staff. “I really need him more than you right now,” I plead.
The very wise Joe P. responded, “These wonderful young people are not indentured servants. We see them grow and then we have to watch as they follow opportunity.” It’s time for me to watch as one of my team follows a wonderful opportunity to work with one of my favourite women in government, Minister Carolyn Bennett.
Ani Dergalstanian has been editing my weekly column and dressing up this E-Blast along with many other duties, for the past two years. If you have enjoyed these communications, you have Ani’s dedication and professionalism to thank. Myself, Tom and the whole DVN team will miss her terribly but we are also proud to watch as Ani takes Ottawa by storm.
