A London homebuilders’ lobby group says the city is missing out on property tax assessment growth while surrounding communities are cashing in.
The group is calling for expansion of London’s urban growth boundary to allow more new housing on the city’s outskirts.
Commissioned by the London Development Institute (LDI) and the London Homebuilders Association, the report by Ottawa based think tank, Smart Prosperity Group, suggests London builders are running out of land that can be developed, and that comes at a financial loss to the city .
According to the report, ‘The Growth of London Outside London,’ “in the past five years, single-detached home construction was up 10 per cent in the City of London, relative to the previous five years. In the rest of Elgin- Middlesex outside of London, it is up to 80 per cent.”
The group wants London’s urban growth boundary to be expanded, freeing up more land for property development, according to LDI Executive Director Mike Wallace.
“People who are moving to the outskirts of London but are driving in every day to work or shop or participate in recreation, we’re not getting the benefit,” said Wallace. “The city’s not getting the benefit of that additional assessment or tax base.”
City councilor Stephen Turner counters that existing ratepayers end up shelling out more every time the boundary is moved.
“So if we build on the periphery, on greenfield land, it costs more to provide growth, to provide sewers, to provide ambulance and police and fire services, libraries, parks, recreation,” said Turner. “If we consolidate our growth, then the amount of people using the same infrastructure is more and the cost to taxpayers is less.”
The report comes at a time when home prices are at an all-time high. However, profits are not the only incentive, said Wallace.
“When the market gets tight, it’s obvious they do well. But that’s not their motivation. They’re in business to be in business for the long term,” adds Wallace.
“There’s a tonne of land speculation just on the other side of that line,” said Turner. “And when we move the line the value of that property increases three-fold. Automatically. Overnight. So of course people are lining up wanting to see that boundary moved.”
Turner said the urban growth boundary is up for review in the next two years.