The Vancouver Sun with Ellen Woodsworth 18 June 2019
In circles where people discuss the more arcane points of Vancouver property taxation, community gardens are something of a perennial issue.
A decade ago, critics were raising concerns about the fairness of the system allowing developers to significantly reduce their property taxes by installing plant beds on undeveloped sites, thereby converting them into temporary gardens or parks.
And new data show how those community gardens have proliferated through Vancouver in the intervening years, to the point where they now sit on land assessed at a combined total of $525 million.
In February 2009, then-COPE Coun. Ellen Woodsworth introduced a motion directing staff to investigate an emerging trend of developers installing gardens on undeveloped properties, to have them reclassified from commercial to “recreational or non-profit” properties.
That reclassification could mean a property tax reduction of more than 70 per cent, Woodsworth’s 2009 motion said, adding: “While gardens fit into an important sustainability mandate, this reclassification may unfairly shift the tax burden to other commercial property owners.”
Three months later, staff reported back to council with a memo, which said that over the previous two years five development sites were converted to community parks or gardens, with a combined assessed value of $88 million. That meant the tax levies paid for these reclassified properties were reduced by $650,100 that year.
A decade later, Vancouver has 28 properties classified, at least partially, as “recreational or non-profit,” according to B.C. Assessment Authority data provided to The Vancouver Sun on request. The combined assessed value of those 28 “recreational or non-profit” properties is $525,242,100.
In many cases, these are major properties owned by big developers. Some have remained as gardens for more than a decade while prime pieces of land sit undeveloped.
Reclassification to “recreational” property can result in “substantial property tax reduction,” from $9.33 per $1,000 of assessed value down to $3.86, Grace Cheng, Vancouver’s director of long-term financial strategy and planning, explained in an email. That means the owners of Vancouver’s half-a-billion dollars’ worth of garden plots will save about a combined total of $2.88 million on their property taxes this year.
But as city staff noted in the 2009 memo responding to Woodsworth’s motion, when one group of property owners pays less in taxes, it means other taxpayers will pay more to make up for it. That 2009 staff memo outlined five options for dealing with the situation, including sticking with the status quo, convincing the B.C. government to amend the Assessment Act or looking at ways the city could more strictly enforce zoning and land use.
Reached Monday, Woodsworth recalled that council’s decision, at that time, was to stick with the status quo.
When presented Monday with the new numbers showing the subsequent boom in quantity and value of community gardens, Woodsworth said: “I certainly think it merits another look.”
“Community gardens are wonderful places for people to build community and to grow a little something, and make use of land that’s not otherwise being used,” Woodsworth said. “But it does seem concerning to me that we give such an enormous tax break.”
But others take issue with the use of the term “tax break,” including Paul Sullivan, who works with developers at his property tax consulting firm Burgess, Cawley, Sullivan and Associates. Even after an undeveloped property is reclassified as “recreational,” it still draws a significantly higher tax rate than residential land, even though it’s often the site of a future residential development, Sullivan said.
“It’s no break,” Sullivan said. “It should be taxed at a residential tax rate. We’re talking about unbuilt residential density here.”
Many community gardens are on sites formerly inhabited by gas stations, Sullivan said, and owners wait years before they’re developed, to allow time for contaminants in the ground to dissipate naturally.
Developers aren’t doing anything wrong by converting undeveloped land into gardens. They’re following the rules as they exist now, and providing an amenity for the community.
But some believe the system needs a rethink. In a letter to The Sun last month responding to a recent column, former NPA councillor Peter Ladner wrote: “Many of today’s faux-community so-called ‘gardens’ are clearly little more than tax dodges whose main function is to lower holding costs of undeveloped property.
“I leave it to my successors on Vancouver council to finesse a policy that can deliver social benefits without subsidizing developers in ways that unduly burdens other commercial taxpayers and reduces affordability due to restricted supply,” Ladner wrote.
Some of Ladner’s successors on council have expressed an interest in taking another look at the policy. At a council meeting this month, Green Coun. Pete Fry gave notice of his intention to introduce a motion concerning what he called “transparent process and taxation for land banks repurposed as temporary recreational properties.”
Fry communicated with city staff while preparing his forthcoming motion, he said, and he understands they’re open to revisiting the issue, including the options presented in 2009.
Fry hopes the motion could be on the council agenda later this summer. But it’s unlikely the system could change before October, which is when B.C. Assessment determines a property’s physical condition. So a few more community gardens may sprout up around town between now and the fall.