Is CityPlace Toronto’s next ghetto?

[nfitz]

Going out on a limb, is a lot of this the result of rising assessments ?

Yes. While the cities budget might increase about 3-4% a year per capita, the value of property has been increasing faster.

What about the fact that many older properties are very slowly having their CVA increased to the correct values. I guess that'll shift more of the burden to these older properties, but city wide the tax rates can still drop.

As far as I know, older properties and newer properties are currently treated the same way. Everything currently based on the prorated value of the property between January 1st 2005 and January 1st 2008. For 2012 taxes, everyone will pay taxes based on their January 1st 2008 assessment value; for 2011 taxes it's 75% of the January 1st 2008 value, and 25% of the January 1st 2005 value. As far as I know, the shift for older properties having their assessment shifted to new values occurred in the mid-1990s ... that process is long-since over.

Either way, as it stands today the difference in the commercial tax rate between the 416 and 905 is very high.

So is the difference in residential tax rates! Toronto's residential rate is 0.562% not including the province-wide education rate of 0.231% - while Oshawa's is 1.42% while Toronto's commercial rate is 1.83% with it being 2.07% in Oshawa.

 

[taal]

Yes. While the cities budget might increase about 3-4% a year per capita, the value of property has been increasing faster.

As far as I know, older properties and newer properties are currently treated the same way. Everything currently based on the prorated value of the property between January 1st 2005 and January 1st 2008. For 2012 taxes, everyone will pay taxes based on their January 1st 2008 assessment value; for 2011 taxes it's 75% of the January 1st 2008 value, and 25% of the January 1st 2005 value. As far as I know, the shift for older properties having their assessment shifted to new values occurred in the mid-1990s ... that process is long-since over.

So is the difference in residential tax rates! Toronto's residential rate is 0.562% not including the province-wide education rate of 0.231% - while Oshawa's is 1.42% while Toronto's commercial rate is 1.83% with it being 2.07% in Oshawa.

Thanks nfitz !

I think there's a special program Toronto has in place for the older building on top of the normal 5 year CVA increase (i.e. if your property is now valued at 1.5X the previous price, this is brought in over 5 years or so).


Regarding the residential rates, I think your off a little:
Toronto Residential: 0.7929218%
Mississauga Residential: 0.962611%

So only about 1.2X. Markham and the like are similar.

Vaughan and Markham are similar. I know some other suburbs are more i.e. Brampton is about 1.2% and the example you gave.

But generally speaking the main competition for office space is in Mississauga, Vaughan, and Markham.





Over the last 5 years we've seen a turn around in the core in terms of development but not the rest of the city, and not really as much as other cities have.

That's hard for some people to believe ! i.e. we see all these offices towers going up, but in many US cities, they've had millions of square feet coming online in their cores on a yearly basis for the last while (not the last couple of years of obsious reasons ...).


So our suburbs are, for whatever reason, much more attractive then there American counterparts. To a certain degree this makes sense, look at MCC ! But on the other hand very little development takes place in MCC, mainly the outlying areas. Markham has amazing growth plans, maybe that's fueling them. So compound this with the tax differential, which from the research I've done is UNIQUE i.e. a lot of other cities of higher or lower tax rates ... that's fine ... but tax rates in the city core and suburbs are usually VERY SIMILAR ! Commercial rates in particular.

 

[fiendishlibrarian]

Well, there goes the neighbourhood with riff-raff like this moving in.

 

[k10ery]

Thanks nfitz !

I think there's a special program Toronto has in place for the older building on top of the normal 5 year CVA increase (i.e. if your property is now valued at 1.5X the previous price, this is brought in over 5 years or so).


Regarding the residential rates, I think your off a little:
Toronto Residential: 0.7929218%
Mississauga Residential: 0.962611%

So only about 1.2X. Markham and the like are similar.

That includes the provincial education tax. I think nfitz's numbers are about right.

But of course the differences go the opposite way - Toronto is undertaxing residential and overtaxing business relative to the 905. Like you said, both of those things may well be driving jobs out of the city. I'm not sure if nfitz was trying to argue the opposite.

 

[nfitz]

But of course the differences go the opposite way - Toronto is undertaxing residential and overtaxing business relative to the 905. Like you said, both of those things may well be driving jobs out of the city. I'm not sure if nfitz was trying to argue the opposite.

Wasn't trying to argue one way or another really ... though even Toronto's business tax rates are lower than some (but not most) 905 communities.

There is a long range plan to fix this ... (ironically, if there wasn't, we'd be getting a lot more bang for our buck in the residential tax freezes, and limits, perhaps eliminating much of our current funding crisis).

 

[taal]

Wasn't trying to argue one way or another really ... though even Toronto's business tax rates are lower than some (but not most) 905 communities.

There is a long range plan to fix this ... (ironically, if there wasn't, we'd be getting a lot more bang for our buck in the residential tax freezes, and limits, perhaps eliminating much of our current funding crisis).

I think you said that the wrong way ? i.e.

even Toronto's business tax rates are lower than some (but not most) 905 communities.

Were you referring to residential tax rates.


Regarding the provincial commercial component, yes that's higher in the 416 for some absurd reason, but there was a plan on the province's side to equal them throughout Ontario.


Anyway my point was while the commercial rate difference is about 1.5X higher in Toronto the residential one is only 1.2% in the 905 on average.


The long term plan isn't exactly to match the in absolute terms but just to make the ratio between commercial and residential similar

 

[nfitz]

I think you said that the wrong way ? i.e.


Were you referring to residential tax rates.

In particular I was referring to Toronto's commercial tax rates, which are lower than Oshawa.

The long term plan isn't exactly to match the in absolute terms but just to make the ratio between commercial and residential similar

Yes, that's the only reasonable solution.

 

[k10ery]

The long term plan isn't exactly to match the in absolute terms but just to make the ratio between commercial and residential similar

Yes, that's the only reasonable solution.

I'm not sure how reasonable it is. It could have been achieved by raising the low business tax rates like Mississagua's while decreasing the high ones like Toronto. Instead this Harris-era reform is pushing all the business taxes to the lowest common denominator. As nfitz said, this policy pretty much explains why Toronto now has a budget crisis every year. But, as taal said , we do have to stop driving jobs out of town, and Mississauga won't play ball.

 

[taal]

I'm not sure how reasonable it is. It could have been achieved by raising the low business tax rates like Mississagua's while decreasing the high ones like Toronto. Instead this Harris-era reform is pushing all the business taxes to the lowest common denominator. As nfitz said, this policy pretty much explains why Toronto now has a budget crisis every year. But, as taal said , we do have to stop driving jobs out of town, and Mississauga won't play ball.

I'm curious, do you guys agree with my original sentiment ?
Two main points:

1) In North America (or Canada at the very least) the differential between commercial tax rates in the city proper and surroundings is very high in Toronto, if not the highest i.e. usually they're much closer. I compared to Vancouver, Montreal, and a couple US cities. Vancouver is interesting because they have very high commercial tax rates compared to residential (there have been a lot of reports saying how this needs to change), but the surrounding areas are identical! Big difference compared to Toronto.

I'd love if anyone had examples of say American cities that are similar to Toronto, if they exist.

2) This is one the major factors that explains the lack of development in the outer 416, and maybe, to a certain degree, why there hasn't been as much development in the core as well ?

 

[k10ery]

1) In North America (or Canada at the very least) the differential between commercial tax rates in the city proper and surroundings is very high in Toronto, if not the highest

2) This is one the major factors that explains the lack of development in the outer 416, and maybe, to a certain degree, why there hasn't been as much development in the core as well ?

1) It is true in some other urban cores in Ontario. For example, London and Windsor have always had higher office taxes than their neighbours. In fact today the differences are wider there than in the GTA, because Toronto has come down so much in the last few years.

As for the US, I dunno. Only about half of states have a "classified" property tax - the rest just have one rate for all residential and business properties. Massachusetts has higher business taxes, but I think the differences are tiny compared to ours.

2) Yeah, I'd bet on it. Also the flip side, which is the massive condo boom in the CBD. New multiresidential gets a tax ratio of one, I think.

 

[k10ery]

2) This is one the major factors that explains the lack of development in the outer 416, and maybe, to a certain degree, why there hasn't been as much development in the core as well ?

From Torontoist (posted by MIIAIIRIIK in another thread):

'- What does worry [Chief Planner] Wright is an intangible: the widening income disparity apparent throughout the city, with high-income populations concentrated along the city’s inner core, low-income populations relegated to the city’s northeastern and northwestern shoulders, and middle income populations rapidly ceasing to exist. “We can’t solve income inequality problems through planning renewals,†Wright admits, “but we should be thinking about how we attract investment, potentially, to parts of the city that don’t have investment now.â€'

Too bad they didn't ask him taal's tax question.

 

[taal]

Some may argue that's partly to blame as well, the outer 416 is comparatively speaking poor compared to the 905, and of course the core.

Clearly this is a silly argument when your talking about two sides of Steeles avenue, where to the north new development has taken place and the south nothing.

But in general, particularly in other areas, maybe that's partly the cause.

 

[k10ery]

Maybe low income is more the root problem, but I had a different take. He said “but we should be thinking about how we attract investment, potentially, to parts of the city that don’t have investment now.†One way to do that would be to create a special low tax district out on the NW border of the city.

 

[taal]

I think that's a great idea, particularly in some areas.

i.e. there are some parcels of land on Steeles (near the 404) that are ripe for office development. I'd assume more around the 401 would be great too.

There are some plans for some around downsview.


They key is we need to attract businesses located in the 905 unfortunately. I know for downsview Build Toronto targeted Procter and Gamble, which was very silly as they're currently located @ Yonge and Sheppard. The companies in the 905 I'm referring too are American i.e. the candian headquarters of American companies. Most of these are actually in the 905 today ...

 

[AlvinofDiaspar]

In the meantime, in Vancouver - from the Globe:

http://www.theglobeandmail.com/news...ould-pump-life-into-dead-zone/article4391250/

Now if only Concord went one step further and did this instead:

http://www.stevenholl.com/project-detail.php?id=58

AoD