2015 property taxes — further to

Walnut Grove, Langley Township

Walnut Grove, Langley Township

Last week’s post on 2015 British Columbia property taxes was shared with the “Maple Ridge Council Watch” Facebook group, and there were comments on that site about  gaps in my presentation.

I’ll point out again that there’s no magic lens to provide clarity on the property tax situation. The system is complicated, and the question of whether you or I are receiving value or fair treatment will always be open to debate.

An obvious point missed last week: the property tax system takes no account of income. Individually, wealthy people often own valuable properties; but in a fast-changing market like ours, many ordinary homes have become valuable, and people on modest or fixed incomes must choose between paying very high taxes or moving away from their communities. On the other hand, someone like myself who lives in a two-income household with no kids gets a very good deal, with police protection, fire protection, transit, well-maintained streets and many other benefits for less than the household cost of car insurance. I also pay schooling and recreation costs for other people’s children, and I’m prepared to do that.

City by city, the correlation in B.C.’s Lower Mainland between average household incomes and property taxes is uncertain, with Maple Ridge (for example) having relatively high household incomes and relatively low property taxes. Vancouver and Richmond have lower average incomes and higher taxes, but what does “average” mean in Vancouver, with its large populations of both low-income renters and high-income homeowners? The federal government used to publish household income information on a local basis in its StatsCan Community Profiles, but 2006 is the latest online census year for this free service.

The graph below looks at the property taxes “per representative house” in the municipalities grouped around my home town of Maple Ridge. This takes in municipal, school and regional taxes. Some people would say it shows the system is working: the owner of the representative or ordinary house is paying roughly the same tax in every jurisdiction. Others might argue that taxes should come down as property values come down, although the truth is that many local government operating costs — the cost of a police officer, a teacher or a ton of gravel — are the same wherever you go, regardless of property values. The numbers here were recently posted by the Government of B.C.

Property taxes 2015 north fraser

One respondent to last week’s post asked about how the residential share of the total tax burden changes from city to city. This figure varies from 49 per cent in Burnaby, with its abundance of industrial and commercial activity, to 78 per cent in business-starved Maple Ridge, to 93 per cent in the super-affluent District of West Vancouver.

The orderly chart below masks a hodge-podge reality. Where there’s a rich industrial base, Burnaby grows a surplus fund, Vancouver runs an impressive network of recreational centres and neighbourhood houses, and Delta pays down its residential taxes. Where the industrial base is slim, West Van and North Van district enlist residential taxpayers to support high quality services, while Maple Ridge and Mission…well…

2015 property taxes residential share

Maple Ridge and Mission make an interesting comparison. They’re located side by side, Maple Ridge in the Metro Vancouver regional jurisdiction and Mission in the Fraser Valley. In the 2014 local elections, both cities turfed their sitting mayors with a vengeance, where the typical Fraseropolis choice was to re-elect the incumbent. Both mayors who were turfed had previously driven out sitting mayors, a pattern that suggests ongoing dissatisfaction among residents.

One Facebook response to last week’s post stated that Maple Ridge homeowners pay waaaaaaay more taxes than their Mission counterparts. The “tax comparisons” chart above doesn’t bear that out. Maple Ridge municipal taxes for each thousand dollars in residential value are in fact lower than Mission’s; when you add in school and regional costs, the Maple Ridge assessments are modestly higher. A big part of this is the Greater Vancouver transit and transportation assessment, which pays for Maple Ridge’s fairish bus service and half the financing costs on the Golden Ears crossing of the Fraser River.

In choosing between Maple Ridge and Mission as places to live, I would see property taxes as a minor consideration for most people. Mission has lower housing costs. Maple Ridge has more complete hospital services. Maple Ridge has a more complete town centre, for those who care. This includes a nice civic complex with a recreation centre, a big library and an arts centre, all part of a controversial development project that triggered the ejection of at least two sitting mayors in the early 2000s. Maple Ridge has more visible homelessness and begging. Household transportation costs may be higher or lower, depending on where you want to go. Both cities sit at the edge of their regions, and both are struggling to attract business, industry or any kind of major employer.

First Avenue, Mission

First Avenue, Mission; seen through a restaurant window, so a bit fuzzy

Property taxes 2015 – in search of the obvious

Ladner, Municipality of Delta

Ladner, Municipality of Delta

Every spring, homeowners across British Columbia receive a statement from their local government demanding payment for local and regional services, including elementary and secondary education.

The individual statements are complex enough. But with 30 cities and towns in the Fraseropolis area alone, all facing different economic circumstances and delivering services in  different ways, and a wide range of property values within each jurisdiction, it’s close to impossible for the lone taxpayer to evaluate their own position in terms of fairness and value.

The Government of B.C. recently posted city-by-city 2015 property tax statistics on its website. I’ll venture a few obvious points, and even then there is guessing involved.

  • Mayors and municipal councils take most of the political heat for property tax levels, but municipalities account for just 40 to 50 per cent of property taxation in the Lower Mainland. School districts and regional services such as sewer, water and transit eat up the rest.
  • There is no evidence that larger cities are more efficient than smaller cities.
  • The amount of property tax collected for each “representative house” varies from city to city. The City of Vancouver’s per-house tax is 50 to 60 per cent higher than the tax in Surrey, the outer Metro suburbs and the Fraser Valley. Is this fair? Hard to say. The ranking of cities resembles the ranking of average home values as reported in Greater Vancouver and the Fraser Valley; but the actual numbers are out of whack. Langley’s representative house has one-third the value of a representative house in Vancouver, but the owner pays two-thirds as much tax as the homeowner in Vancouver.
  • Business development is a high priority for every city, but there is no evidence that success brings lower taxes for homeowners. In Burnaby, businesses pay a high share of total taxes, and homeowners carry the lowest share of the tax burden in the Lower Mainland, but they still pay relatively high taxes per representative house.

Property taxes 2015

  • The “total taxes per person” calculation reflects several variables: political  decision-making on spending, the amount of money available from business and industrial sources (high in Vancouver and Burnaby), the relative number of renters, who pay taxes only indirectly and unconsciously through their landlords (high in Vancouver and Burnaby) and household size. The spread among cities here is not so wide, although Surrey, B.C.’s second-largest city, is a notable outlier on the low-tax side.

Property taxes per person 2015

  • School district trustees spend a lot of money without much public scrutiny, and the tax take varies widely from city to city. The 2015 school tax payment per representative house is about $2,000 in the City of Vancouver, $1,540 in Burnaby, $1,270 in Coquitlam and $1,045 in Langley Township. One possible measure of how the trustees are performing is to compare school costs with the cost of municipal services. In Vancouver, the school trustees collect 75 per cent as much money as City Hall; in Coquitlam, where school taxes are lower per house, the figure is 60 per cent; and in Langley Township, with even lower school taxes, the figure is 50 per cent.

The Canadian Federation of Independent Business posts periodic reports on spending by municipalities in B.C. Their 2014 review, as in other recent years, points out that municipal spending is growing faster than population growth. About half of this spending is covered by property taxes, with half coming from other sources, including an increasing share paid by property developers. The CFIB says spending be restrained. It offers little context on why this increase is taking place, except to say that wages and salaries may account for 60 per cent of the expenditure total. It makes no reference to tax pressure from other local agencies.

If municipal over-spending is really a problem, the obvious course of action is to ask citizens where they would like to cut back. It may be that local officials are greedy and incompetent, or it may be that residents are demanding more services. Maybe we have bigger and better recreation centres. Maybe we have more building inspectors, after the crazy decades of the 1980s and ’90s when developers built leaky condos and imposed billions of dollars in retrofitting costs on the people who bought them. Sewers, water lines and streets are ageing, especially in the inner suburbs, and upkeep and replacement costs are rising. Can we afford to cancel or defer spending on these items?

The CFIB does not propose that a round of consultations with the public. It calls, instead, for the effective abolition of community self-government. The B.C. government would put an across-the-board cap on municipal spending, regardless of past performance or local circumstances. Government would also freeze municipal wages and salaries for an indefinite period. The main justification for asking the Province to take this political leap is that it would reduce one part of the property tax bill for small business, resulting in fewer business failures — although the report offers no estimate of how many business failures are caused by property taxation, or how many could be avoided.

It’s clear that businesses would like to pay lower taxes. However, jurisdictions with relatively low taxes to not necessarily attract business. In my own community of Maple Ridge, for example, the inflow of business investment is slow and homeowners are left to carry 79 per cent of the local tax burden, compared with 51 per cent in the higher-tax jurisdiction of Vancouver. Access to markets and access to labour seem to be much more important considerations in choosing business location.

The CFIB report also states that a B.C. family of four, could have saved, on average,  $8,356 over the period from 2000 through 2012 — something like the cost of running a compact car for a single year — if municipalities had kept spending in line with population growth and inflation. Somebody would have saved something, no argument there, but the “average family” is a hypothetical construct in a world where every jurisdiction (151 B.C. municipalities) behaves differently. And the figure seems fishy even as a generality, judging from the fragmentary information provided; it seems perversely to ignore the financial contribution that business makes to running our cities and towns. It also ignores the position of renters, whose level of benefit from reduced municipal spending is unknowable.





Return to Central Lonsdale

Lonsdale Ave 1Since we toured the Central Lonsdale village in January 2013, the area has taken on much more of a big-city feel.

Lonsdale Ave 2Controversy over tower development around Lonsdale village divided the residents of the City of North Vancouver in the November 2014 municipal election. The incumbent pro-development mayor, Darrell Mussato, was returned with just 52.5 per cent of the vote, but landed a full slate of council supporters. In my view, this part of Lonsdale Avenue is turning into one of the finest urban high streets in Western Canada, and the pedestrian traffic on the pavements tends to prove that — with the qualifier that the competition, looking out to Surrey, Calgary and Regina, is sparse. Continue reading

Cool concepts in road pricing for Metro Vancouver

From the 2014 funding plan of the TransLink mayors

Photo from the 2014 funding plan of the TransLink mayors

In his first news conference this month as British Columbia’s minister for Metro  transportation, Peter Fassbender said road pricing deserves a “serious and concerted look” as a possible way to fund transit and regional roads. Mr. Fassbender is a former City of Langley mayor, now a provincial legislator, with a close knowledge of the issues. A sales tax proposal was defeated in a recent referendum; the 17-year-long search for a transit funding formula will now resume.

The road pricing mention matters to the region’s road users, especially long-distance commuters like me. We would face increased costs in return (supposedly) for quicker trips, because some motorists would choose other transportation modes or stay home. And reduced congestion would (supposedly) benefit all taxpayers by reducing the demand for new highway construction. Continue reading

Planning for renewal in Chilliwack

Dom 1

Vicki and I are loyal to Chilliwack. We worked with the City on community planning  projects in the 2000s and were impressed with Council’s vision and respect for citizen participation.

So on a recent Saturday visit with co-tourist Dominic Kotarski, I was saddened to see a downtown core on hold, with vacant lands, empty storefronts and few people on the streets. Continue reading

Portland light rail to the rescue


Max interiorThe Amtrak train broke down at the station in Vancouver, Washington, a 20-minute drive from downtown Portland in normal traffic.

Vancouver Washington rail operations (right) seen from the platform

Vancouver Washington rail operations (right) seen from the platform

The Amtrak people did not seem to have a customer service plan. After 45 minutes they announced they were working to fix a problem with “the air.” The temperature rose; outside it was 35 degrees Celsius or 95 Fahrenheit. After an hour and a half, most people had climbed out to seek refuge in the small air-conditioned station or mill about on the pavement hoping for a taxi. But there were few taxis to be had — one Vancouver taxi driver who ventured into the area refused to go to Portland, because he said he was nearing the end of his shift — and Amtrak was not providing emergency buses or suggestions on how to reach the city. Continue reading

A homeless camp in a Vancouver suburb

2015 homeless camp 1 reduced

Nicole Read, the mayor in my home city of Maple Ridge, won election as a political newcomer in November 2014. The local election campaign was marked by concern over downtown property crime, linked by some to the presence of homeless people in vacant spaces nearby. The homeless have been a prominent feature of the town centre for more than a decade, but the incumbent mayor and council were blamed and Read  got the political benefit.

Weeks after the mayor’s swearing-in, a colourful row of tents sprang up on a residential street 200 metres from my home. In the 2014 Metro Vancouver homeless count, Maple Ridge and Pitt Meadows together were said to have 39 unsheltered homeless people. By July 2015, the estimated population of the Cliff Avenue camp was about 60. Continue reading