Lethbridge city council rejected a motion this week that would have cut property tax mill rates in half for vacant serviced lots in the city.
Lethbridge saw an estimated 10 per cent jump in housing units sold in 2020, but housing starts were a different story, with an unusually large inventory of vacant lots carried by builders and developers during COVID-19.
“There was an incredible decrease in housing starts — about 260 — last year, which means there are extra lots that aren’t being built on, in addition to the existing inventory that was already there,” said BILD Lethbridge executive officer Bridget Mearns.
“So yes, we felt there was a need, and it would help in a number of different ways.”
Last summer, BILD was asked to bring suggestions forward to council that would aid the homebuilding industry. One of those suggestions — which was introduced again at a committee meeting in February — was the proposal to reduce the property tax mill rate by 50 per cent on vacant lots.
The recommendation was that subclasses be established for vacant single-family residential lots as well as vacant multi-family lots.
BILD estimated in its presentation that there are about 750 vacant residential lots in Lethbridge currently, as well as 20 vacant multi-family residential lots. The total tax on these lots is estimated at $1 million, meaning a 50 per cent tax relief would be valued at about $500,000 a year.
BILD’s recommendation was brought forward as a resolution at Tuesday’s city council meeting by Coun. Jeff Coffman. Coffman was ultimately the only member of council in favour of the motion, which was defeated 8-1.
Multiple councillors weren’t satisfied with the motion as it was written, citing hesitation to impact taxes for other residents.
“I agree that there needs to be some support for businesses in our community, like this, that are struggling through these times,” said Coun. Blaine Hyggen. “What I struggle with is the fact that that support will fall back on the rest of the citizens, with a tax increase, from what I’ve heard.”
Coffman reiterated that BILD’s proposal did not include the recommendation of a tax increase.
“On the issue of the revenue, there are several options,” Coffman said. “Our default is usually to raise taxes. We can actually look at lowering expenses — and council went through a wonderful exercise in November around that — and we also have reserves.”
Coun. Rob Miyashiro said he hopes a different solution can be found to ultimately help struggling homebuilders and developers, and Coun. Jeff Carlson said he didn’t want to see everyone involved painted with the same brush.
“It basically is a one-size-fits all, and it really doesn’t address individual needs, or folks who may be experiencing issues, or flourishing, as the case may be,” Carlson said during debate.
Although Coffman’s resolution was defeated, he urged his colleagues to think of different ideas to address the issue.
“If you don’t like what you see here, defeat this, but make certain you bring back an option,” Coffman said. “Because we’ve asked somebody for support, we’ve asked somebody to provide us with information that we can support, that we can provide assistance in.
“We can’t just leave people in our community uncertain and leave people in our community hanging.”
Mearns said it’s council’s decision whether or not they would like to explore the proposal any further, and in the meantime, BILD will continue to brainstorm solutions.
“We have a number of things that we’re looking at that are sort of a longer-term effect,” Mearns said. “The short-term, easy fix is not the answer. It’s looking at these longer-term processes and design standards and how we’re using land efficiently, because all of that ends up costing everybody more.”
Mearns said movement in the market and inventory levels starting to come down have her feeling optimistic for what’s to come.