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Vacant home tax would tap into Saint John ‘gold mine,’ says councillor

Click to play video: 'N.B. municipality tapping into unused housing supply'
N.B. municipality tapping into unused housing supply
WATCH: A nationwide shortage of housing has left many Canadians struggling to find somewhere to stay. At the same time, many properties sit vacant, abandoned or seldom used. And as Robert Lothian reports, one New Brunswick municipality is looking to tap into that unused supply – Jul 26, 2022

In light of the growing demand for adequate housing and an abundance of properties left wasting away in disrepair, a Saint John councillor wants to see a tax levied on vacant homes.

According to Brent Harris, there are about 70 abandoned properties throughout the city capable of providing around 400 units following renovations.

“So, to me, we’re sitting on a gold mine of housing in the city, but we just don’t have anything in place that disincentivizes the leaving it alone,” Harris said outside a vacant Victoria Street home on Tuesday.

At Monday’s Saint John common council meeting, Harris asked the city manager to review the city’s capacity to implement a vacant house tax. A submitted statement noted the need to “close the gap on wasted housings assets,” adding that they exist through holes in policies.

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Council approved the motion, and the matter will be investigated by city staff.

“We would have the support people need to renovate their homes, and we would have that kind of philosophical underpinning as a community to say ‘Hey man’ or ‘Hey person, this is offside, this doesn’t make sense in our community in a housing crisis,’” Harris said on Tuesday.

There are about 1,200 people on a wait-list for affordable housing, many of whom have been waiting for years, he said.

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The vacant house tax has been introduced in other Canadian municipalities, most notably Vancouver. Implemented in 2017 at one per cent of a home’s assessed value, the mechanism aims to force owners to sell their property or open it to the rental market.

Click to play video: 'Fredericton’s affordable housing strategy closer to becoming reality'
Fredericton’s affordable housing strategy closer to becoming reality

The potential for the vacant house tax received the applause of the New Brunswick Tenants Coalition.

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“Especially in a housing crisis, it is against the public interest to be hoarding houses and basically when the public needs them for people’s homes,” spokesperson Matthew Hayes told Global News.

Hayes noted that 70 abandoned properties account for half a per cent of the primary rental market, saying while it may not seem significant, the city has an ultra-low vacancy rate.

Murtaza Haider, a professor of data science and real estate management at Toronto Metropolitan University, said the tax could help but is not a cure-all.

“The idea behind it is so compelling that, ‘Oh, you put a vacant home tax in, then suddenly hundreds of thousands of additional homes become available.’ That seldomly takes place,” Haider said.

While Vancouver has been lauded for the success of the tax, Haider said its results have been moderate at best. In many situations, he said, owners find exceptions to avoid the vacant house tax – but that doesn’t mean the city should not proceed.

“If you think about it, if it’s not having a very adverse impact, if it’s not having a very positive impact, then the council believes that this is something they need to do, they should do it,” Haider said.

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“Again, this would be one check box saying, ‘Well, we tried that, it’s not working out, let’s look at the other stuff.’”

Harris agreed with the need for more supply but again referred to the “gold mine” located in the Port City.

“So how do we increase supply if we’re not disincentivizing idle assets,” Harris said.

“When you’re in Canada’s oldest city with Canada’s oldest homes, (the vacant house tax) is certainly something you have to look at.”

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