Raise the Hammer

You are right that the Province controls the rules.

However, the tax incentive is to keep buildings empty. Owners get a tax reduction if they empty a building partially or entirely of tenants. The rebate is 30% for commercial properties and 35% for industrial properties. If they further demolish the building the tax goes even lower, to the land value.

For example, when Blanchard demolished the building at Jackson to replace it by a parking lot the taxes went from from about $77k to $7k. This tax structure encourages speculators to buy buildings and keep them empty or demolish them and sit on the land until the value rises so they can make an unearned windfall profit, or until they eventually decide to develop it themselves.

http://www.fin.gov.on.ca/en/refund/plt/v...

The City wanted to change the rules so the tax rebate for empty units only lasted for a year (enough time for a responsible landlord to find new tenants). After that time the tax would go back up and the owner could decide to sell if they did not want to actually lease the building. The Province wouldn't let them.

Downtown, the city has all sorts of very lucrative incentives to help pay for facade and leasehold improvements. They even offer millions in low interest loans and several years of tax breaks on new construction. There is no excuse for an ambitious and energetic owner not to improve their property and look for tenants. Unfortunately, many buildings are now empty above the ground floor (and have been for decades). This costs the city both taxes and economic and social vitality.

The current system of tax rebates with no expiry dates, and permissive demolition (especially for parking lots) encourages land speculation and costs the city many millions in property taxes and is very detrimental to the economy and liveability of downtown (especially).

This is especially anti-social and parasitical behaviour on the part of the speculators because the land value will only rise significantly if other more responsible and dynamic land owners actually develop and improve their land in the same area!

Comment edited by kevlahan on 2015-05-05 09:48:19