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Originally Posted by oilyfan
Do you think a bump in property taxes for the suburbs is going to correct that? If taxes go from 3000 to 4000 for someone in Auburn Bay is not going to make or break that buy decision or the property values.
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Property taxes relate most closely to operating costs. Property taxes cover only a small portion of capital projects.
The big shift if we were aiming for true cost recovery of new growth would relate to the acreage assessments (development levies). The City recently doubled the acreage assessment from about $7500 a door to about $15,000 a door. This moved us from covering about 25% of the capital cost to service a new home to about 50%. The Mayor believes this did not go far enough and that we should work toward full cost recovery. If we moved to full cost recovery, the acreage assessment will move to about $30,000 a door, which would have an impact on the purchase price of the home. Each agreement is 5 years, so I imagine it will continue to move closer to that full cost recovery number eventually.
It's an inherently unsustainable situation when each new home is actually a net cost to the City, rather than a net contributer - at least on the capital side. There's been less work done (although it's ongoing) on the relationship between new growth and operating costs.
Of course, redevelopment comes with some cost, although not as much as growth on the fringe - and at some point there's likely to be a new redevelopment levy to help cover some of those costs. Of course, you don't want to be punitive with that and discourage redevelopment, which on balance costs the City much less.