Edmonton city council approves tax subclass to crack down on derelict properties

Dilapidated houses on Alberta Avenue are being boarded up to prevent safety issues, Saturday, July 29, 2023. Global News

Beginning in 2024, the City of Edmonton will have the ability to charge higher tax rates on homeowners in mature neighbourhoods whose properties are considered derelict.

In a news release issued Wednesday afternoon, the city announced that city council has approved a new tax subclass to address residential properties that “show serious signs of neglect, are dilapidated, are falling into significant disrepair or are unlivable.”

“(This) is a new tool in the city’s toolbox for addressing the harmful impact that derelict and problem residential properties can have,” said Cate Watt, the city’s branch manager of assessment and taxation. “Managing derelict properties often comes with additional costs to the city and a higher tax rate will help to cover those costs while encouraging property owners to clean up derelict houses.

“We hope this will play a role in improving the vibrancy of mature neighbourhoods in the long run.”

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The city said a case study of 31 “problem properties” that concluded in 2020 found that those properties cost the city about $1.3 million for things like bylaw inspections and enforcement, fire inspections, safety codes and development compliance inspections and police inspections and responses.

“That’s a combination of Edmonton Fire Rescue Services, EPS, bylaw, development compliance, unpaid taxes,” explained Coun. Ashley Salvador. “They really do take a toll not only on neighborhoods, but on the city’s pocketbook as well.”

The city noted that “problem properties” are defined differently than “derelict properties,” and that only some of the 31 properties were deemed to be derelict. Problem properties are considered to be ones that pose social or safety risks, like being linked to criminal activity or being a fire risk.

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“It got pretty bad,” Salvador said. “In the six-month period leading up to the election, there were 281 fire-related events in the core in these exact types of properties.

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“With all the actions we’ve taken so far, we’ve seen 89 demolitions, 308 securements, 238 orders issued and a dramatic reduction in the number of fires in these communities.

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“The actions that we’re taking have been working and I think adding the addition of a property tax sub class for derelict properties will push that even further,” Salvador said.

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Christy Morin, executive director of Arts on the Ave, thinks the taxation change will help crack down on derelict properties in the Alberta Avenue neighbourhood and all over Edmonton.

“They’re a real blight to the neighbourhood,” she said. “They attract the wrong kind of people and really are drug dens, often times.”

Arts on the Ave is a non-profit working to help make a long stretch of 118 Avenue a community arts district.

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Morin said the community has been “aggressively asking” city council and administration for years to find more effective ways to address this issue.

“We’ve been working with revitalization with the city for 18 years. And 18 years ago, we saw that there were cities — Atlanta — in Philadelphia, and other places that actually went really hard on taxing these derelict property owners and it made a huge difference in the core communities of those cities.”

Salvador said Edmonton is the first in Canada to develop a tax sub-class for derelict residential properties, but recognizes other jurisdictions in the U.S. have seen success with that approach.

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The provincial change to the Municipal Government Act several years ago also helped, Morin said. In 2017, Alberta amended the act to make it easier for municipalities to encourage redevelopment of brownfield — contaminated, vacant, derelict or underutilized — properties.

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“Also, there’s been a task force created by the City of Edmonton to be able to go strongly against these derelict properties and we’ve seen huge success with them being boarded up.

“But now the next step is really hit them hard with taxes, and let them know that we are a great community. These communities don’t deserve to have derelict properties sit on these lands for years and years and years,” she said.

After that, Morin would like to see a similar approach to tackle derelict commercial properties.

“It just brings your business down when you have a next-door neighbour that is sitting and doing nothing.

“This whole task force started in 2021, when our community in the Alberta Avenue district had over 200 fires and many of them in these derelict properties.”

Salvador says she’d like to see this expanded beyond mature neighbourhoods — across the city to all derelict residential and commercial properties.

“It’s just untenable for these properties to continue to stand in our neighbourhoods and pose such a significant risk to communities and to continue costing the city millions of dollars.

“The goal here is to see the properties either come into compliance, be kept up, or sell it someone who will do something with it,” the city councillor said.

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The city said Wednesday that it expects to notify about 300 owners this fall that their property is at risk of being assessed as derelict.

“All property assessments will be confirmed in January 2024 when assessment notices are sent in the mail to over 400,000 Edmonton property owners,” the city said.

“For a property to be considered derelict for tax purposes, the city must assess the physical condition of the home on the property, looking for buildings that are deserted, boarded up, deemed unfit for habitation or abandoned partway through the process of construction or demolition.”

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