The City of Kamloops is looking to expand its revitalization tax exemption program to include purpose-built rental buildings of ten or more units in a number of neighbourhoods.
City staff will be working on a new bylaw that would bring in the tax exemption to the North Shore, Downtown, Sagebrush, and Lower Sahali as well as pockets of Brocklehurst, Valleyview, Westsyde, and Aberdeen.
Councillor Margot Middleton – who chairs the Economic Health Select Committee – says its a progressive move forward to get more rentals built.
“It is trying to increase the rental stock in our city, which is badly needed but we have expanded the area that the exemptions that had previously existed,” Middleton said on NL Mornings. “We have broadened that area to include more properties that would be up for redevelopment and this tax exemption.”
Councillor Nancy Bepple also spoke in favour of the City doing what it can to increase the number of rental units.
“According to the current CMHC website, Kamloops has a vacancy rate of about 1.3 per cent,” Bepple said. “We are struggling to provide rentals. Building anything is a good thing and I think its fair to do this.”
In a report, Community Planning Manager Stephen Bentley says the city will forgo about $520,000 in revenue each year if the RTE is expanded to include purpose-built rental buildings in the chosen neighbourhoods.
Councillor Mike O’Reilly – who has long been a vocal supporter of the revitalization tax exemption program – says its a worthwhile investment.
“We’re not making a political choice to win votes tomorrow because this is not helping our tax rate this year or the next year or the next year, ” O’Reilly said Tuesday. “I think we need to make sure that when we talk about an RTE, that its not costing us things, It’s a longer term investment in the areas we want to see growth in.”
“If we look back at the Sandman Signature Hotel that was part of the 10-year RTE. We were getting nothing off it because it was an empty party lot, but last year we started collecting the taxes on it. That wasn’t spoken about how much it actually helped our tax rate decrease last year.”
Revitalization tax exemptions are currently offered for new commercial and residential properties both Downtown and on the North Shore, as well as for the redevelopment of existing hotel sites, and the construction of new daycares.
Projects that qualify for the exemption are not taxed at the new assessed value following redevelopment for a period of ten years.
“There is still tax paid on those properties, the land based costs and what not,” Middleton told Radio NL .”Our thinking on this is if we don’t enhance or increase the opportunities for development, ten years from now those properties are still only going to be bringing in the original tax base because nothing has ever happened to it.”
“This we hope will generate development and at the end of 10 years you’re going to have a property that has a tax assessment on it that is significantly higher.”
While they didn’t ask staff to include new strata housing buildings as part of this latest expansion to the RTE, City Councillors could make that move before the bylaw is adopted at a future meeting.
“To me housing is housing. Why do we care if its rental or strata?” O’Reilly added. “A unit is a unit, which if we’re putting more supply into the market will hopefully reduce the demand, and therefore rents will either stabilize or go down.”