There is a loophole enabling developers not to pay the full cost of property tax on undeveloped property in Vancouver. A developer can purchase a piece of land in the city and instead of immediately establishing a timetable for development can leave the land fallow for temporary community gardens or parks. As Dan Fumano in this article dryly observes, the taxation on these temporary developer owned community gardens have been a “perennial” issue.
This loophole has been flying below the radar for quite some time. In 2017 Kerry Gold in BCBusiness noted that 15 properties were converted from class 6, or commercial, to class 8—community garden or public park use. While developers cite the high value of holding land and the length of time it takes to get development permits as reasons to allow the low tax rate for community gardens, Simon Fraser University’s Duke of Data Andy Yan has another take.
“We are rewarding land hoarding and subsidizing it through these community gardens. We are losing tax money to subsidize this thing that looks good—and all we’re getting in return are really expensive taxpayer-subsidized tomatoes. They are the most expensive tomatoes in North America.”
Today there are over 28 development properties that have been reclassified as community gardens and parks that total $525 million of real estate. Those properties pay about one third the property tax, with reductions from around $9.33 per thousand of assessed value becoming $3.86 per thousand of assessed value. Looking at only five development sites that had been reclassified as temporary community parks or gardens, City staff estimated that taxation collected was $650,100 less. Of course that unpaid tax money is shouldered by other taxpayers in the City. On the 28 properties temporarily classified this year for park or garden uses, developers will save “a combined total of 2.88 million dollars on their property taxes.”
While development pundits argue that this developable land should not be required to pay the full assessed value of the land, should developers be able to leave the land to a lower use to save money? Or would a policy of requiring developers to pay the full tax assessed land value ensure that land is developed more hastily for much needed housing? You can read Dan Fumano’s full story here.