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HomeMy WebLinkAboutTR-105-97 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT DN:TR-97-97 GENERAL PURPOSE AND ADMINISTRATION COMMITTEE Meeting: File # DECEMBER 8, 1997 Date: Res. Report #: TR-105-97 File #: By-law # Subject: ASSESSMENT OF FARMLANDS PENDING DEVELOPMENT Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report TR-105-97 be received; 2. THAT Council not support the position of the Urban Development Institute with respect to proposed amendments to the Fair Municipal Finance Act (Bill 149 Part 2) regarding assessment of farmlands pending development. BACKGROUND AND COMMENTS: 1.0 On October 27, 1997, Council passed the following resolution #C-784-97: THAT the correspondence (Attachment A) received from Kelvin Whalen, Chair, Durham Chapter, Urban Development Institute/Ontario, regarding the Fair Municipal Finance Act (Bill 149 Part 2)- Assessment of Farmlands Pending Development, be received; THAT the correspondence be referred to the Treasurer for review and report; and THAT Kelvin Whalen be advised of Council's decision. 1.1 Several amendments were introduced in the Provincial Legislature with the Second Reading of Bill 149, on September 25, 1997. Included in these amendments were provisions relating to farmland awaiting development. tJI (U REPORT PD-105-97 PAGE 2 1.2 Currently, these properties are assessed as farmland and therefore pay less property taxes than if they were assessed at the full residential market value. This is referred to as "special productivity-based assessment." 1.3 The apparent intention of the amendments is to introduce a "sliding scale" whereby the property is assessed at the full residential value but taxed at a discounted rate based upon the stage of the development process applicable to the property. As the property reaches full development, it would ultimately have progressed through the scale to full taxation. 1.4 According to the amendments, the three subclasses of farmlands awaiting development will be reduced by: a) 50% to 75% when a draft plan of subdivision under Section 51 of the Planning Act is approved; b) 25% to 75% when an approved plan of subdivision is registered; or c) 0% to 75% when a building permit is issued for a building or structure on the land that is to be used for other than farm purposes. The amount of the reduction within the prescribed ranges is to be specified by municipal by-law and therefore is up to the discretion of Council at the upper tier level. 1.5 The amendment has not yet received final reading as indicated in the correspondence from the Urban Development Institute. CONCLUSION: 2.0 As noted above, Regional Council will have the authority to determine the amount of the reduction to be applied within the prescribed ranges. As a result, there is considerable flexibility within the ranges to minimize the impact upon the developers. Also, in essence, currently development lands are subsidized by virtue of the assessment status historically granted to them. This has been the issue of assessment appeals in some municipalities in the past as this has been perceived as unfair to the balance of the property taxpayers. �J i REPORT PD-105-97 PAGE 3 2.1 It is therefore recommended that Council not support the position of the Urban Development Institute since the proposed amendments may result in a fairer, more consistent treatment of taxpayers. Respectfully submitted, Reviewed by, Marie A. Marano, H.BSc., A.M.C.T., W.H. Stockwell, Treasurer. Chief Administrative Officer. MAM/NT/km Attachment A - Letter from Urban Development Institute/ Ontario Durham Chapter (Re: The Fair Municipal Finance Act (Bill 149 Part 2) Assessment of Farmlands Pending Development) (J i l ATTACHMENT A Urban Development Institute / Ontario Durham Chapter October 20, 1997 Mayor Diane Harare The Municipality of Clarington 40 Temperance Street ON 2 0 1957 Bowmanville, Ontario L1C 3A6 ��dtSlClp�LI�OF CLARINGTON Dear Mayor Harare, Re: The Fair Municipal Finance Act (Bill 149 Part 2) Assessment of Farmlands Pending Development I write to you on behalf of the Urban Development Institute to apprise you of legislation currently being contemplated by the Province, which has the potential to significantly curtail economic development in all municipalities of Ontario. Specifically, the above-noted legislation would see drastic increases in the assessment of agricultural lands at the point of draft plan approval, rather than registration. In effect, even though the physical development of such lands could be several years away, the landowner would be burdened with huge property tax increase. Obviously, this then will serve as a deterrent to bring lands forward in the face of such stringent penalties. Other impacts of such an increase would include; - the carrying cost of all forms of new housing and business space will increase as the cost of carrying land increases; - the viability of small developers and builders will be jeopardized as they may lack the financial resources-to finance the cost of paying such taxes throughout the process to the point of construction or sale; - owners will strongly resist having their lands draft approved and zoned for future development uses. Few persons or companies would want to own a parcel of lands for the long term if costs of property taxes soared as soon as draft approval has been obtained; /2 ���c C"C:DID AOn A\,Gnn i FACT q IITF ?qna wli I nwnAI F ONTARIO M2J IV6 (416) 498-?121 FAX (416) 498-6356 Urban Development Institute I Ontario Durham Chapter - 2 - - a readily-available and serviced supply of lands will largely disappear(through lack of draft approval) thereby limiting the attractiveness of our municipalities to industry and business which require choice in lot size, location, and configuration. All this at a time when the ability to attract new business is critical to a municipality and to the province as a whole; - the increase in the cost of development will also have a serious impact on many businesses who have made significant investment decisions to locate in southern Ontario based upon existing property tax laws. These laws allow them to hold lands for future expansion at a minimal carrying cost, so long as the lands are kept in a productive farming use; and; - owners of lands which are farmed but draft approved will let the draft approval lapse or will seek to have it rescinded even though these lands have already been through a lengthy planning process. It is an expensive, wasteful process to require owners as well as the many government agencies involved in the planning process to revisit the planning approvals in the future (after draft approval has lapsed) in order to permit a long-enjoyed use which only enhances our economy and which is consistent with numerous policy objectives of our Provincial government. In summary, the we feel that the proposed bill will impose substantial tax consequences on all landowners and will act as a deterrent to healthy and timely processing of development applications and their resulting economic stimuli to the municipality. We are asking the elected officials of all municipalities to join with us in asking the Provincial government to reconsider this flawed legislation and adhere to the principles of proper business facilitation inherent in the"Common Sense Revolution". To date we have received letters of support from Brampton and Newmarket (attached) and many more are now in progress. It would be greatly appreciated if you could add the support of Clarington to this list and send a letter expressing these same ideals. Please do not hesitate to contact me should you wish to discuss the matter further. Yours very truly, r. Kelvin Whalen, Chair, Durham Chapter 2025 SHEPPARD AVENUE EAST, SUITE 2208 WILLOWDALE ONTARIO M2J 1V6 (416) 498-9121 FAX.(41.6) 498-6356. FROM: UDI FAX NO. : 4164986356 09-29-97 08:51P P .05 The Corporation of the City of Brampton x wellington Street writ ,. Office of the Mayor Dramptart.Qntio . t_8Y 4R2 Tel.9M74-260a Peter Robertson PAX;9W/87.4-2620 Scptemtxr X6,Y J37 The Honourable A Leach •Minister of Municipal.Affairs&Houft 777 a$y Stream 17*floor Toronto,ON M5G 2E5 Dear Mr.talchr This letter is in refenanct to tho proposed digztes to the gsacssntcnt of land, as cant,mplated under BM 106,a matter of extreme importance to Brampton, On July 311=*t with Tula AlcxopouIos,senior advisor in the Ministry of$•avCirue.We found the meeting to be very satisf dory in that all arss=bled seemed to understand the economic development treed for a city Me Brampton to have a signifiicatt and divezze inventory of lazed that is zoned and ready for market, As=ayor of A g)swiag city,Y want a=mce ftt the pwposed cluuiges will Mot stifle the growth and economic potential of my city.There are many f laws is the old act;and we bAw experiesi�aunty rumples of situations where hidustrial laredowncm,as well is residmtiai,have been overburdened lay taxes,which results in negative impacts to our tax base in the longer term. Its order for a municipality to,glow we need a continuhAS inventory of development lands comir►g orL stream.As it takes Many years to complete.the developm=t prods, landowners have relied on the aSxicultural provisions in the rxisfing legislation to keep taxes low on their inve bal lar4 We believe that this,should be allowed to continue under the new legislation, or be seplared with retmother equitable means, which encoumps lam& to lac brought on stream. With such at tax system, 100 acres in five years csc4atea land value by 2.5 to SSrn. It is short sighted to tv=tax today,and fare the unw=#ed conuquences tomonxow. The cadstinX legislation has restdlted in some vacant.lands being taxed at rates ratq fttg from $5,004 to $14,000 per acret This obviously Etas a drastic effect on the Qwnee; fina:rces and ability to carry their land. Even If he/she doesn't go faa3aupt under this burden,they ccrWnly will be discouraged from condauing businew in my city. Over taxation of ra=t lards diwou agcy large develop= from bringing on new land. In feet our 1nda%ft l invcrntory is precariously low at present: • Bram.21rtA business Part:,with 800 acres,i.s down to only 1 i acres for sale. • We have never bad so manly tax sales. Much of this uncollectable tax Iles to be written off in subsequart yam, Which is detrimental to our budgeting process. i FROM: • UDI FAX NO. : 4164986356 09-29-97 08:52P P,06 Page 2 Small landowners rarmot absorb the taus,and face fug 44 rLifiL WsdriS businesses vmn't bud*an overtaxed lot to plan for wgmndon and will leave my city when they out ww their current fay .Mty. School sites that am on t1old and in a developer's inventory am over burdened,ddvh�g up tho f4W price to s school board, If taxed at Faulk r=&ntW rates these increased cu ying oasts am passed on to the school boaxs& arid,of course,that money comes fiam taxpayers.Land being serviced for residential use3 that is overtaxed results in l Aar priced housing for Yny residents. Another furtdamcarW tmwtsty is bdmg perpeimted in Peel by the A&w-uaent Department as des=lwd in my submission to the Stsxft CD=dttea on Sill 106 teaaloSP4. The government has an opp ut9,through BM log,to brig some fairness to this sittmtion axed encourage growth to continue,to the benefit of everyone in the ptoviam We look for your IeadershIp to enmm Bill 106 and its related regulations praperiy addresses these issv es. S*ncerely, Peter RoberWn Mayor - EACL e.c. T.Alexopoulos i FROM,: • UDI FAX NO. : 4164986356 09-29-97 08:52P P.07 Town of 4NcwnazAkcc 465 Davis Davc Sox 37$ �' Ncwnrarket.b�i'!r� -•«,... `� Offsce of The Mayor L3Y EX' Telephone:(gt151895-515 `'•,...w•~ T-Dhn E. Cole (945)883• =d� F2x:(9053853.3dS� VIA FAX & ORDINARY M,AM Septertlber 17, 1.997 Hon, Al Leach: Mituster of Municipal Affairs 777 Bay Street, 17th Flour Toronto, Ontario M5 C 2F-5 'Dear Mr. Leach: I am writing to you out of serious concern over the potential changes is the assessment of vacant lands, as proposed under Bill 106. As you know, the Town of Newmarket, and indeed most municipalities ©f the Greatcr Toronto Axea, are finally emcr&g from a lonZ period of ecanomic hardship. As Mayor of a mcuucipalit5'which is Gust starring to recover and ro r once again, I want your assurance that proposed assessment changd5 will not sUe that growth. To attract new business and industry to our municipality, we require a,food invcntory of developable lands, Developers have relied on aglicult nal provisions in existing legislation to keep their land itivest racnts _ afI•ardable and feasible in the fate of Iengthy development approval processes. As it stands, vacant lane's arc bei-ug tweed at rates new mg S 10,000 per acre, This represents an untenable financial burdtz ou developers. They wW either lose or be driven away from their investments arzd in turn, future growth and industry for Newmarket will be lost. Larger developers who arc able to cope with the new rates on their existing lauds vrill be discouraged from bringing new lands for warcL In fact, Newmarket's industrial land inventory is already dangerously low. Continued..,/2 FROM`, . UDI FAX NO. : 4164986356 09-29-97 08:53P P.08 r F-Ion. Al Leach Minister of Municipal Affairs Toronto, Ontario September 17, 1997 Page 2 Much of this tew ra,c will be uncollectable and wilj need to be written off in subsequent years, compounding our budgeting difficulties. Smaller landowners will not be capable of absorbing these new rates. Existing industries will abandon their expansion plans and simply leave town when they outgrow their current facilities.. The price of undeveloped school sites within a developer's inventory will rye accordingly, as will lamd being serviced for residential uses. All of these costs will eventually be passod on to our residents through higher priced housing. Your government has an opportunity, through Bill 106. to establish fairness and promote economic growth throughout our Province. I would respectfully request your intervention to ensure thax any assessment changes contemplated by Bill 106 do not put Newmarket's future economic health in jeopardy. Yours very truly, John E. Cole Mayor e.c. Frank Flees, WP, York•Ma4zenzic Julia Munro, NWP, I. =ham-York I