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Urban Development and Proposals Discussion

While not extensive, there are a few tools that are in place to encourage what your are proposing. An owner of a heritage building can apply to have their property officially designated as a historical resource, which brings with it preservation rules but also some significant tax breaks (I think. If anyone knows better, which is a real possibility, please correct me on this post). This is a voluntary option though, as there is caution about trampling personal property rights. So, happy to help, so long as the owner chooses to seek it. This is one of the aspects that is troubling about the Stephen Avenue Quarter proposal, as the owners of those buildings did seek the heritage designation, to preserve the buildings and receive (I assume) the tax breaks. If they reneg on that, and especially if it is allowed to be renegged on, I can see that really impacting the effectiveness of the overall program. How could we as a society ever trust building owners to actually hold their word after receiving the tax break? As for the Gallery proposal, I don't think that property has been granted official historical designation (again, could be wrong). The building would definitely qualify, but the owner has opted not to protect it, as is their right.

For dicincentivising parking, we have had various tools over the years to limit parking in new developments within the core, to reduce traffic and encourage train use. However, those related to new buildings and their parkades, and have now mostly been repealed I think. For surface parking, we have policies that state no new surface parking lots are to be approved in the centre city (including Beltline) but this are not enforced for some reason, and new surface lots continue to get built. Not a lot, but more than the policies said should have been. Perhaps an actual enforcement of that policy would help, as well as a refusal to renew the "temporary" approvals so many operate on and receive automatic renewals on. But, there doesn't appear to be any appetite to do that.
 
MichaelS said:
An owner of a heritage building can apply to have their property officially designated as a historical resource, which brings with it preservation rules but also some significant tax breaks (I think. If anyone knows better, which is a real possibility, please correct me on this post).
Click to expand...
Heritage Calgary says:
Am I entitled to any tax breaks or grants?
Currently, no tax incentives exist at any level of government. However, grants exist at the municipal and provincial levels.
Click to expand...
The City provides some heritage incentives like Grants for preservation and rehabilitation costs, and the ability to do density transfers:
1662216483307.png

The problem is twofold:
A). The grant program is hilariously underfunded
For 2021 and 2022, the grant will be $1.5 million, with $1 million reserved to support non-residential heritage conservation projects
Click to expand...
B). Density transfers are great... for areas where land is in high demand and zoning is restrictive. Neither or those are really true in Calgary where everything is an overzoned parking lot.
 
MichaelS said:
For dicincentivising parking, we have had various tools over the years to limit parking in new developments within the core, to reduce traffic and encourage train use. However, those related to new buildings and their parkades, and have now mostly been repealed I think. For surface parking, we have policies that state no new surface parking lots are to be approved in the centre city (including Beltline) but this are not enforced for some reason, and new surface lots continue to get built. Not a lot, but more than the policies said should have been. Perhaps an actual enforcement of that policy would help, as well as a refusal to renew the "temporary" approvals so many operate on and receive automatic renewals on. But, there doesn't appear to be any appetite to do that.
Click to expand...

The bolded sounds totally counter-productive and would preserve surface lots. It seems like there should be much better ways to manage parking supply...I know municipalities are somewhat limited in their ability to impose specific taxes, but Shirley there must be more they can do.
 
I often wonder what moving partially or entirely to a land value tax rather than a property value tax model would do. Part of what makes surface lots economically sustainable is that they have low operating costs, so there doesn't need to be much revenue coming in to keep them fiscally stable (especially considering potential land appreciation). For instance, consider three lots on the same intersection of 10th Ave / 1st St SW, the Western Block (the two storey mixed use building that's the potential Truman development site) on the SW corner, the parking lot on the NW corner, and Mount Royal House apartments on the NE corner. The assessed value of the parking lot is $16.2M, about $2500 per sq m of land. The Western block is $6.3M, about $5500 per sq m of land; Mount Royal House is $33.4M, or $17800 per sq m. of land, With a property tax for these three sites based purely on assessed values, the parking lot would pay 29% of the tax, the Western Block 11% and Mount Royal House 60%. But if it was based on land value (and assuming the value of land is roughly the same per area for three parcels on the same corner), the Western Block would pay about the same, 12%. Mount Royal house would go down to 19% of the tax burden, and the parking lot would pay 68% of the taxes. Doubling the taxes of parking lots could help encourage more intensive use.

A land value tax would be an interesting policy; it would really shift the incentives away from lower density uses. Might need to be a hybrid model; half property value and half land value or the like, and might need to shift over a few years.
 
ByeByeBaby said:
I often wonder what moving partially or entirely to a land value tax rather than a property value tax model would do. Part of what makes surface lots economically sustainable is that they have low operating costs, so there doesn't need to be much revenue coming in to keep them fiscally stable (especially considering potential land appreciation). For instance, consider three lots on the same intersection of 10th Ave / 1st St SW, the Western Block (the two storey mixed use building that's the potential Truman development site) on the SW corner, the parking lot on the NW corner, and Mount Royal House apartments on the NE corner. The assessed value of the parking lot is $16.2M, about $2500 per sq m of land. The Western block is $6.3M, about $5500 per sq m of land; Mount Royal House is $33.4M, or $17800 per sq m. of land, With a property tax for these three sites based purely on assessed values, the parking lot would pay 29% of the tax, the Western Block 11% and Mount Royal House 60%. But if it was based on land value (and assuming the value of land is roughly the same per area for three parcels on the same corner), the Western Block would pay about the same, 12%. Mount Royal house would go down to 19% of the tax burden, and the parking lot would pay 68% of the taxes. Doubling the taxes of parking lots could help encourage more intensive use.

A land value tax would be an interesting policy; it would really shift the incentives away from lower density uses. Might need to be a hybrid model; half property value and half land value or the like, and might need to shift over a few years.
Click to expand...

I like the idea in principle, but I wonder if a more targeted solution might be even more effective for this particular issue - like a vacant land incremental modifier, where the extra penalty charge increases with each year of vacancy.

Of course the devil would be in the details, like what the threshold is to constitute vacancy vs development...e.g. could you just slap up some car-port roof structures? Or large tent/dome buildings? But it shouldn't be too hard to account for those possibilities.
 
I think the best property tax system I have heard is to charge them on a per square meter of land basis. If you have a single family home on a large lot, you pay the same amount as a condo complex on a similar sized lot. Difference is the condo amount would be split between 20 or so units.

Same thing downtown, a parking lot would pay the same as an equal sized lot that has a high-rise on it.
 
MissingMiddle said:
Heritage Calgary says:

The City provides some heritage incentives like Grants for preservation and rehabilitation costs, and the ability to do density transfers:
View attachment 424981
The problem is twofold:
A). The grant program is hilariously underfunded

B). Density transfers are great... for areas where land is in high demand and zoning is restrictive. Neither or those are really true in Calgary where everything is an overzoned parking lot.
Click to expand...
Calgary is also in the process of devaluing density transfers if it approves a substantial density increase of the Eau Claire YMCA site.
 
MichaelS said:
I think the best property tax system I have heard is to charge them on a per square meter of land basis. If you have a single family home on a large lot, you pay the same amount as a condo complex on a similar sized lot. Difference is the condo amount would be split between 20 or so units.

Same thing downtown, a parking lot would pay the same as an equal sized lot that has a high-rise on it.
Click to expand...
I agree. That would much more fair. Maybe not the same amount straight up, but something based on square feet of the developed area, with a curve depending on how many suites. A one floor building pays 100 percent of the usual mill rate, maybe a a two floor building pays 1.25 times the rate, a three floor would be 1.5 times the rate etc...

Right now the market rate system isn't fair for inner city folks who pay higher because their in a choice location.
 
Surrealplaces said:
I agree. That would much more fair. Maybe not the same amount straight up, but something based on square feet of the developed area, with a curve depending on how many suites. A one floor building pays 100 percent of the usual mill rate, maybe a a two floor building pays 1.25 times the rate, a three floor would be 1.5 times the rate etc...

Right now the market rate system isn't fair for inner city folks who pay higher because their in a choice location.
Click to expand...
I guess the question is what is the actual purpose/intent of property taxes.

I can see an argument that the key thing is generating sufficient revenue for the city's budget; since municipalities are limited in their ability to impose taxes, focusing mainly on property value is probably the 'fairest' way to generate those funds, somewhat akin to income tax brackets. Maybe there is an opportunity to incentivize certain desired behaviours, but things will go to hell pretty quickly if the Bow building suddenly has a lower tax bill than a random grocery store or a warehouse in the industrial zone.

There's gotta be more effective targeted solutions.
 
In any discussion about taxes, we need to remember that taxes will inherently discourage and incentivize certain behaviors.

When we rely on taxing improvements, we are inherently discouraging people from improving their land by penalizing them for doing so. And we're incentivizing long-term land speculation (a.k.a economic rent-seeking) by shielding owners of parking lots and vacant lots from the true negative externalities produced by their inefficient land use.

By contrast, if we put a greater emphasis on taxing land, people who improve their property and people who find a way to use their land efficiently to provide more value for their community are rewarded.

It's clear that Calgary has a problem with inefficiently using land - and it's an economic problem even moreso than it is a political one. So it's high time we examine how our tax system shapes the market by punishing improvements.

Now, could we ever switch to a full LVT? I'm not sure if that's feasible economically, but it sure as hell isn't politically (similarly to what lemongrab mentioned, it will be framed as evil big skyscrapers getting subsidized by single family homeowners). But I think a partial LVT, such as those implemented in some cities in Pennsylvania, could make a big difference while still being fair to everyone.
 
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