Stop giving free Metropasses to condo buyers, say builders
Toronto Star - Jan 24
Robyn Doolittle
Urban Affairs Reporter
A controversial policy that requires builders purchase a year’s worth of Metropasses for new condo buyers may be the next tax nixed under the Ford administration.
Fed up with what they say is an unfair cash grab created to subsidize the TTC, developers say they will be pressuring Mayor Rob Ford to repeal it.
Since 2009, the TTC has collected $1,080,694 from builders buying Metropasses. And with the economy rebounding, the policy - which only applies to new buildings - is expected the generate even more funds for Toronto's cash-strapped transit system.
The industry will find support from TTC chair Karen Stintz, who says she never supported the policy when it passed council two years ago and she still doesn't.
Stephen Dupuis, president of the Building Industry and Land Development Association (BILD), said builders are spending hundreds of thousands of dollars on the passes even though buyers aren’t using them.
To warrant the $111 pass — which comes to the builders at a slightly discounted rate — a person would need to use the TTC 44 times a month to break even.
“We find the majority of condo owners also own cars and are content driving. Not all the time - but they don't make enough use of a Metropass,” Dupuis said.
That's the case at Tridel’s Grand Triomphe 2 project in North York, said Stephen Upton, vice president of development with Tridel.
“Right now, the mayor is busy with the budget. Once we get past that and he can get into the day-to-day stuff, we’ll be pushing to get rid of this policy. I’m hoping it’s by spring,” said Upton.
And while politicians may try to sell the “free” pass off as a perk for new owners, the buyers will inevitably be on the hook for the additional funds, said Brian Johnston, president of Monarch’s Canadian division.
“It really isn't free,” he said. “Any cost gets passed on to buyers. Politicians love to convince themselves it doesn’t, but it does. Developers are trying to make a return on their investment.”
Monarch isn't even promoting the Metropass deal in its marketing for the builder's latest project, Encore, at the Scarborough Town Centre.
“That’s not why people are buying highrise condominiums,” Johnston said. “It’s an awkward way to try to finance the TTC, in my view.”
City council approved the policy, which applies to all new buildings with 20 or more units along transit priority areas, in December 2009.
It officially came into effect last April, but developers facing pressure from councillors and bureaucrats began voluntarily purchasing them a year earlier.
At the time it went through council, transit-friendly councillors such as Howard Moscoe — who has since retired — predicted it would “cause people on transit lines to abandon their cars.”
Right-wingers, including then-councillor Ford, did not support the initiative.
During the campaign, Ford met with the BILD board twice. He seemed open to doing away with the policy, said Upton, who is also the board's vice chair.
Toronto's new TTC chair was also opposed to the plan back in 2009.
“I didn't think it was appropriate for the city... to ask a condo company to buy Metropasses,” Stintz said Friday, adding she is definitely interested in reopening the issue.
“That being said, we need to figure out ways that we can mutually benefit from the increased value and development opportunities when building on a subway line.”
