In a bid to keep properties from sitting empty when they could be housing people, the City of Ottawa is set to begin taxing vacant residential units next year.
City staff are still working out the details, but have suggested taxing vacant homes at an additional one per cent, or about $4,150 on a residential home assessed at $415,000, if they sit empty for a total of more than 184 days, or half the year.
"It's nice to be leading the pack on this issue in the province of Ontario," said Mayor Jim Watson, who chairs the city's finance and economic development committee, which tasked staff with coming up with the new tax.
Vancouver has a vacant homes tax, and Toronto and Mississauga are looking at the idea after Ontario gave its municipalities that power in 2017.
Ottawa plans to follow Vancouver's example and require all 307,000 homeowners to declare annually whether their property is occupied or vacant. Those who don't could face a fine and have their properties deemed vacant.
The new tax would apply to buildings with up to six units including condos, but not to units considered a primary residence, or to commercial, industrial or larger multi-unit buildings. There would be exemptions for occupants who die or are hospitalized, or if extensive renovations are taking place.
The first bills would go out in 2023 for buildings that were assessed as vacant in 2022.
The Hintonburg Community Association's Cheryl Parrott had urged councillors to consider such a tax during budget deliberations last November.
Parrott said her neighbourhood has seen evictions and houses boarded up for years while they await redevelopment.
"There has to be a better way, and we think this is the way," she told the Tuesday committee.
Another Hintonburg resident, Anne Hanna, said speculators and developers shouldn't be allowed to let buildings sit empty during a declared housing emergency, while neighbours have to cope with the mess and safety concerns surrounding vacant properties.
The Ottawa Small Landlord Association pointed out there are currently risks preventing some property owners from renting out their units.
Tony Miller said landlords have had more problems during the pandemic with tenants who refuse to pay rent or move out. He said it can take eight to 12 months to get a hearing before Ontario's landlord-tenant board, a trend that predates the pandemic.
He asked the city to exempt them from the tax until the tribunal's delays are fixed.
"The city must not penalize small landlords who are making the difficult decision to leave their units vacant," Miller said.
As of March, the city had received complaints about 206 vacant properties, but staff cited a five-year-old Statistics Canada report that placed the actual number as high as 22,000 units.
Staff estimate the new tax would generate between $5 million and $6 million from between 1,000 and 1,500 vacant properties, and would cost the city just over $1 million to administer.
The money generated would go toward creating affordable housing, the mayor said.
Full city council must endorse the idea at its meeting June 9.