Property tax may be tripled for rundown homes
By Erica Marie
In a recent community and public services committee meeting, city staff presented the council with a report on using Edmonton’s property tax system to address derelict properties. With a draft policy detailing a new tax subclass and higher tax rates for derelict properties, the city could impose three times their current tax rate on property owners in the coming years. However, this would require a clear definition of derelict properties.
Defining Derelict Residential Properties
While the terms derelict and problem properties are often interchanged, a distinction is worth noting as the property tax system can only be levied based on the physical attributes of properties and cannot be used directly to address issues that may be related to the behaviours of a property’s occupants.
Derelict properties include those in a state of physical despair and neglect. In comparison, problem properties elicit constant attention from civic services for issues such as fire hazards, criminal activity, and noise violations.
Committee members discussed the narrow definition of derelict residential properties as property deemed unfit for habitation by Alberta Health Services (AHS). This approach will make it easy for assessors to locate and include the new tax subclass, as it will be visible on land titles. However, it is limited to a relatively small number of properties, which limits its usefulness in addressing the larger issue of problem properties. Currently, there are around 108 residential properties listed under this definition.
Alternatively, a broad definition of derelict residential property includes severe signs of neglect, is dilapidated, falling into significant disrepair or uninhabitable buildings, including abandoned buildings, partially or fully boarded up, or have been issued AHS orders. While this definition will capture more derelict properties, it has its challenges. It requires more resources to search for properties that meet these criteria. It also runs the risk of affecting properties outside the intended group as this could be used by neighbours to address other property owners on their building aesthetics and outdoor maintenance standards, causing some residents to be inappropriately entrenched in the process. There are an estimated 388 properties considered under this broad definition.
The administration is exploring options for a new program with bylaw adjustments that support the development of a derelict residential subclass using the narrow definition.
Non-Residential Derelict Properties
Tackling non-residential derelict properties offers its own complications, as the subclass can only be applied to properties that have been unoccupied for at least one year. Unfortunately, the interpretation of ‘unoccupied’ within provincial legislation is unclear and can be subject to legal disputes. There are also technical limitations to the city’s assessment data management application to set a higher rate than the general non-residential rate, which requires significant investment in the software.
For these reasons, the administration recommends against proceeding with a derelict non-residential subclass at this time.
Feedback from Council
Mayor Amarjeet Sohi expressed his appreciation for all the hard work done so far in dealing with problem properties and said, “we should have zero tolerance for derelict properties, and we should be getting tougher on these slum landlords.”
Coun. Anne Stevenson is on board with the bylaw change “as another tool in our toolbox to address these properties that create significant challenges in our community.”
Another show of support from Coun. Ashley Salvador, who understands the long-standing challenge problem properties have had in our city, specifically in Ward Métis, thinks “this is absolutely a worthwhile cause to explore.”
Coun. Keren Tang reflects on her visit downtown many years ago, where she witnessed derelict and empty storefronts. The citizen-based research team asked her a lot of questions regarding using taxation as a tool. She is pleased to see that the city is now tackling the subclassing issue and says, “adding more tools is always a positive direction.”
The Community Property Safety Team (CPST) is a pilot project that began in April 2022 in response to the increasing number of fires from vacant unsecured properties. Through an escalating enforcement model, they hold landowners accountable for unsecured and empty buildings that pose a fire risk to the surrounding community.
To date, the project has shown positive results with the following:
- 10 properties were voluntarily demolished by their owners after receiving orders for securement
- 2 properties renovated and legally occupied
- 31 properties secured through orders issued by the team
As a non-profit committed to boosting community economic development, the Edmonton Community Development Company (ECDC) recognizes the detrimental effects derelict and problem properties have on the health and safety of those living and working in the surrounding area. It is from the voices of community members who have had to deal with these derelict properties that Project 10 was born – a strategy to demolish ten problem properties and build new homes for families to purchase. They have demolished ten problem properties and are looking to take down twenty-two more problem properties within the next couple of years.
Increased taxes alone may be insufficient to address the overall issue of problem properties, but utilizing all available tools and tackling it from a multifaceted approach, such as the CPST and Project 10, are all steps towards a positive and revitalized community.