You can get a $2000 city subsidy to install a backflow valve – but not if you rent your home. While the tax rate on apartments is nearly three times higher than on single family houses, many city services are denied to tenants.
City planners will notify you in writing if a zoning change is proposed within 120 metres of your home – unless you are a tenant – even if the change strongly affects your home or business. You will also get a letter every year explaining how the city spends its money – unless you are among the third of Hamiltonians who rent your home.
Much of the discrimination is a holdover from a time when only property owners were allowed to vote. It’s also fed by a taxation system that makes municipal governments dependent on property taxes. And city lawyers point to legal obstacles such as the provincial rules that forbid financial assistance to industrial or commercial enterprises as a reason why programs like the backwater valves subsidy can’t be provided to renters.
“A grant or loan to an individual residential property owner in an owner–occupied situation would not trigger the bonusing provisions,” notes the staff report on the city’s Residential Protective Plumbing Subsidy Program. “However, where a residential property is not owner–occupied and is a rental property, in the opinion of Legal Services, such a situation would trigger the bonusing provisions as the City would be assisting a commercial enterprise.”
The exclusion of tenants from this and other city support programs disadvantages some of the most vulnerable Hamiltonians. More than a third of tenant households in Ontario are living below the poverty line. Statistics Canada data also reveals that 96 per cent of those receiving Ontario Works social assistance live in rental units, along with 78 per cent of those getting disability support.
The current city tax rate on most multi–residential buildings is 2.74 times the rate imposed on single–family homes. Since the 1990s Queen’s Park has officially encouraged municipalities to equalize tax rates and has prevented increases where rates are above the provincial average.
Hamilton council responded by cutting business taxes by over 40 per cent, but decided to take no special measures to lower the levy on multi–residential buildings except on newly constructed apartments. In 2005 the tax rate on apartments was 2.74 times the rate on single–family homes – exactly the same as it is in 2013.
According to provincial estimates, property taxes on apartments account for about a fifth of the rent paid by tenants. And while the taxes are collected from the building owners, provincial legislation requires that reductions in tax rates be passed on to tenants.
Statistics Canada data from the 2006 census revealed that “45 per cent of Ontario tenant households pay 30 per cent or more of their household income on shelter costs” and twenty per cent pay over half their income to keep a roof over their heads. That rises to nearly three–quarters of income among those using food banks. The same census found the average income of an Ontario renter household to be less than half that of homeowner households.
Council last considered the apartment tax rate in 2009 and agreed with staff that lowering it would require an unacceptable increase in the levy on single–family homes. Staff also argued that MPAC assessment methodologies under–estimate the value of apartments.
“It is staff’s contention that the difference in assessment methods leads to assessed values that are significantly lower for the multi–residential class.”
The report said the average 2008 tax burden on apartments was $1700 – about half that paid by the average home owner – and would fall by about $80 a month if the tax rates were equalized. V