The City’s Finance and Economic Development Committee today received a preliminary framework for a vacant unit tax program, which would help increase Ottawa’s housing supply by encouraging homeowners to occupy or rent their properties.
If adopted, owners of residential properties that are vacant more that 184 days per year would pay a one-per-cent tax as part of their final property tax bill each year. The tax would not apply to an owner’s principal residence. The Committee directed staff to develop a tax regime that would be implemented in 2022, with billing to start in 2023.
While a one-per-cent tax rate is estimated to bring in about $6.6 million in revenue in its first year, the tax is not intended to be a major revenue generator for the City. In addition to returning more vacant properties to the housing market, it would also help reduce the amount of vacant homes with property standards issues, such as disrepair and dereliction.
The Committee received an update on the work of the City’s Anti-Racism Secretariat, including community highlights from the first phase of public engagement that will inform Ottawa’s first anti-racism strategy. Staff will conduct more public engagement before presenting the strategy to Committee and Council in 2022.
The City ended the first quarter of 2021 with an overall surplus of $6.5 million, according to an update the Committee received in the 2021 Operating and Capital Budget – Q1 status report. Ottawa ended the first quarter with a $12.7 million surplus for programs supported by property taxes and a $6.2 million deficit for rate-supported services like water, sewer and storm water.
The update outlines expenses related to the COVID-19 pandemic, which cost the City $27.5 million in tax-based expenses and $5.7 million in rate-based expenses. Those expenses were offset by $25.5 million in federal and provincial funding. Ottawa spent $1.5 million on its vaccination program, expenses the City anticipates it will recover from provincial Ministry of Health funding.
The Committee received a report on the work of the Energy Management Office highlighting its innovative use of data to help the City maximize its energy efficiency and reduce electricity spending. In 2020, the Energy Management Office’s strategic oversight resulted in one-time savings of approximately $255,000 and estimated recurring savings of $1 million per year. The report also notes $3.5 million in avoided costs.
The Committee approved the City’s first application under the Heritage Community Improvement Plan Grant Program, which provides tax-equivalent grants to encourage restoration and adaptive reuse of heritage attributes when a heritage property is redeveloped. The application is for properties on William and York streets in the ByWard Market that were damaged by fire in 2019. The maximum grant amount would be about $387,000 over a 10-year period and would be funded through the $516,400 property-tax increase anticipated to result from the redevelopment over that same period.
The Committee approved a new by-law regulating governance of Ottawa’s Business Improvement Areas (BIAs) to provide them with consistent standards of governance. A complementary City policy would guide relations between City Councillors and BIA directors and employees, to ensure a respectful and welcoming relationship. Each BIA would also need to adopt a new procedural by-law and an updated policy on election-related resources.
Recommendations from today’s meeting will rise to Council on Wednesday, June 9.