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Originally Posted by Table 5
I'm curious if there are any real world examples of this getting the wanted result? This is not my area of expertise, but I ask as I generally don't see increasing taxes, or forced timelines, being an incentive to do business in the long-term. To me it seems like it would be just another added cost and risk factor for a developer to consider, that is either pushed down on to the end-purchaser anyway, result in some really crappy "placeholder" development to appease the rules, or if costly enough, something that prevents developers from wanting to do business in the first place.
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It’s used in oil sands leases where timelines of increasing costs and potentially losing rights factor into development plans.
I think it would do a few things. It would decrease the value of undeveloped land which in turn reduces the hurdle for the final sale price to turn a profit. This would cause losses for the existing land holders.
I disagree that the cost is pushed to the end user. The price of housing is set by demand right now and people’s ability to pay mortgages.
I think you are correct it could lead to poor developments that barely meet whatever thresholds were created.
In BC they have a Best Use property tax. It causes some interesting (some would say negative) consequences on single family home ownership after rezoning.
https://www.canadianjusticereviewboa...t-and-best-use
As a result you further incentivize densification and reduce the capital cost of an SFH by increasing the holding costs of an SFH.
I think it’s an area requiring further study but in general increasing taxation on under utilized areas while holding total tax revenue constant will reduce taxation on well utilized areas. Essentially it’s the same principle as a carbon tax.