The provincial government favours taxing developers who build high-density housing near transit corridors. Communities Minister Peter Fassbender has told municipal politicians he is prepared to support such a levy as a way of funding transit services.
Fassbender specifically mentioned Greater Victoria and Vancouver as regions that could benefit from the tax. And the idea has already caught the attention of mayors in the capital region.
Victoria’s Lisa Helps, Barb Desjardins of Esquimalt and View Royal’s David Screech have indicated interest.
There is no question Fassbender has identified an urgent matter. Traffic congestion is a major issue across the capital region, and the only practical solution lies in better transit services.
Rapid bus lines out to the West Shore, and redevelopment of the E&N Rail line as a commuter train service are two potential projects that could meet the growing need.
Yet existing municipal funding sources, such as property taxes, development fees and gas-tax receipts, are stretched to the breaking point. And with the province refusing a request by municipalities to raise the gas tax, it is evident a major expansion of transit services cannot be accomplished without some new source of revenue.
But is it really a good idea to impose a tax on housing projects built near transit lines? One of the guiding principles in city planning is that the best location for such projects is alongside transit services.
The whole idea is to encourage close proximity, so residents don’t need to drive downtown. Taxing developers for doing what we want them to do runs contrary to this strategy.
Desjardins sees the issue from a different angle.
“We know that when you develop a transit corridor, like a commuter-rail corridor, you will see significant growth around those spots. So density occurs, and obviously developers do well in that scenario.”
In other words, if taxpayers fund a new commuter service and developers profit from that, it’s reasonable they should pay their share.
But developers would reply that any costs associated with increased taxation will be passed on to residents in the form of higher purchase prices or rental fees.
Estimates by local builders suggest that existing taxes and regulations add about 20 per cent to the cost of a new house. With decent accommodation already unaffordable for many families, do we want to make that situation worse?
B.C. already has a dreadful record for child poverty. One reason is that lower-income families spend too much on accommodation. Anything that might add to this burden should be avoided.
Realistically, a narrowly aimed tax of the kind proposed by Fassbender — it might be called punitive — will not solve the problem. It might make it worse.
What is needed is a broad-based revenue source, and only the two senior levels of government possess such sources.
We need concrete plans from Ottawa and the province to face this problem. Victoria and Vancouver are two of the least-affordable housing markets on the planet.
We were disappointed to find, in Tuesday’s budget, no indication of any substantial investment in transit for this region. That will not do.
The finance minister might say he can’t afford the commitment. We say he cannot afford to take that view.
Greater Victoria’s population base is expected to grow by nearly 100,000, or 27 per cent, by 2038. The only feasible solution to approaching traffic gridlock is a far more robust transit service.
There are seven provincial ridings in the capital region. During election debates in May, every candidate in these ridings should be asked a simple question: If elected, will you support a major expansion of the region’s transit system, paid for out of the provincial tax base?
