City’s Multi-Residential Tax Grab Picks On The Little Guys
Windsor City Council is moving forward with a proposal to deny future applications from owners of multi-residential buildings to convert their apartment buildings to condominiums, a status that has freed landlords and their tenants from a crippling tax rate 2 1/2 times higher than the single-family residential rate.
The city’s official plan, adopted in 2007, dictates that conversions should be allowed only when the local vacancy rate is above three percent. The latest calculation pegs it at 2.9 percent.
The move will allegedly assist renters struggling to find scarce accommodations.
“The only loser in all of this is the City of Windsor because we lose a lot of taxes,” Ward 5 Councillor Ed Sleiman told the media after a city subcommittee he sits on voted to recommend the condo conversion ban to full Council.
Who are these tax bandits trying to kid?
Council nose-stretchers should know that no renters have been forced to purchase their units, and none have been displaced by 50-to-60 condo conversions, which began in earnest in 2006. Tenants living in 3,300 converted units will remain protected indefinitely.The wealthiest apartment building owners began the conversion epidemic in 2006 with the simple motive of escaping the multi-res tax the city refused to modify.
“If it was a fair tax from the beginning they wouldn’t have this problem,” says Janette Calandra, head of the Windsor Property Management Association, and owner of three of the 400-odd buildings left in the city’s multi-residential class.
The feisty Calandra has been lobbying the city for more than a decade to bring down the multi-res rate. It started in 2004, when taxes on apartment buildings almost doubled with the latest re-assessment from the Municipal Property Assessment Corporation (MPAC), coupled with the city’s torturous tax rate.
When Calandra multiplied MPAC’s assessed value by the city’s tax rate, she learned that the levy on a 13-unit, three-storey walk-up she owns, would leap-frog from $11,000 to $21,000 per year, phased in over four years.
In the throes of a 35% vacancy rate that spurred a host of bankruptcies in the sector, she helped form a group of similarly jolted landlords to ask the city for fair taxation.
In 2006, after little change, group member Boardwalk Real Estate Investment, an Alberta-based conglomerate, began to apply for condo conversions, including high rises like the 184-unit Lauzon Towers.
Boardwalk processed 21 local conversions before selling its Windsor assets to Guelph-based Skyline Group Apartment Real Estate Trust for $136 million in 2015. Other out-of-town Goliaths, like Timbercreek Asset Management, have recently jumped on the conversion gravy train.
Halberstadt’s column continues here Alan Halberstadt Biz X magazine May 2017