Vacant homes in Newmarket and beyond will go unpenalized for at least another year as York Region is putting a halt to its vacant housing tax.
The region has consulted on the matter for the past several months in preparation for putting one to council for a vote this year. But a report May 4 recommended halting those efforts, as staff have become concerned that market factors and evidence from Toronto may mean the tax would not be self-sustaining compared to the implementation costs.
Newmarket Mayor John Taylor said he does not want to see the vacant home tax be a tool that goes unused in municipal efforts to create more affordable housing.
“All of a sudden, the brakes are being hit,” Taylor said, adding that “we have a housing crisis we declared and this is an opportunity to address a significant portion of it.”
The region has previously estimated there are about 7,250 vacant homes in its borders and found strong public support for a vacant housing tax in a survey. The planned one per cent tax would apply to homes being left without residents, meant to deter homes bought only as speculation and add more units to the market. Regional staff and consultants had spent several months preparing the tax for council consideration.
But a new staff report expressed concern about previous estimates. Regional treasurer Laura Mirabella said that with the City of Toronto announcing about 2,000 vacant homes this week from initial declarations, significantly less than the 8,000 it expected, there is more uncertainty about whether York Region’s estimates would be accurate. With the implementation cost expected to be $5.2 million, with an ongoing $3.6 million operating cost, staff expressed concern that the tax would be self-funding.
"There’s significant uncertainty as to whether or not it would have a real impact,” Mirabella said.
The tax had success in Vancouver, but Mirabella added that the housing market was different when the city implemented it in 2017.
Another factor is that the province is also creating a policy framework for vacant housing taxes, and delaying would ensure York Region is aligned with it.
But Taylor said the region’s information gathering to this point has indicated the revenues would outweigh the cost, with extra funding able to go toward more housing. He suggested charging more, such as 1.5 per cent, could offset cost concerns.
The vacant housing tax is not likely to go without some opposition at regional council. Markham Mayor Frank Scarpitti said he does not believe in it and campaigned opposing it.
“It might be a tool, but a pretty insignificant tool and one that doesn’t ultimately create that much more housing for the demand that’s out there,” he said.
Taylor asked how early it could happen in 2024, and Mirabella said staff could report back in the fall.
“We’ve got thousands if not tens of thousands of vacant homes in the GTA,” Taylor said, adding that “It’s a policy tool, it’s only one, I get that. But we need to do far more.”
