Dave Rutherford considering running against Nenshi

[SebC]

Originally Posted by Flamenspiel

Well in that case you owe me money because renters don't pay property taxes. So it would be a very dumb bet for you.

Sure they do, they just do it through their landlords.

[Ozy_Flame]

Originally Posted by CaptainYooh

I do NOT hate Nenshi; he is quite likable, in fact. He is very entertaining, very vocal and smart, which makes him so popular with younger voters. He is also a good conversationalist. But this is not a TV show or a college boardroom. Calgary needs a practical, common sense leader and Nenshi is not it. I will vote against Nenshi for sure. If Rutherford is the only formidable opponent, then it's Rutherford.

I have a hard time understanding why you would vote against him. Is it because he sounds like game show host? Or has he done something irreparable in his tenure that has turned you against him?

I'm not sure how much more practical and common sense you can get than Nenshi, unless you are talking about getting in another business guy with development or O/G background because that's a "common" type in Calgary.

[Cowboy89]

Originally Posted by Muta

What makes you believe Nenshi doesn't have 'common sense'? Furthermore, how do you define common sense as it relates to municipal politics?

Just curious.

I find that as ideas get more common, the less sense they make.

[Muta]

Originally Posted by Cowboy89

I find that as ideas get more common, the less sense they make.

You're right, winter tires are completely irrational.

[Flamenspiel]

Originally Posted by SebC

Sure they do, they just do it through their landlords.

Well, that's not the way it really works though. There are many things that a landlord has to consider when setting the rents. You have to factor in things like the market rate and quality of the tenants, it is by no means an automatic decision to pass taxes increases on to tenants.

In any case, what I am trying to get across is that to most practical people the way to judge a government is how they handle your money. Never mind Nenshi, I'd like to see a record of how all these municipal pols voted on all these budget measures, and maybe even some non budget votes that speak to competency.

What are they doing with all this new money?

[NuclearPizzaMan]

Originally Posted by Flamenspiel

Well, that's not the way it really works though. There are many things that a landlord has to consider when setting the rents. You have to factor in things like the market rate and quality of the tenants, it is by no means an automatic decision to pass taxes increases on to tenants.

Oh boo hoo. This is exactly the situation the free market is designed to deal with. If you can't price your product competitively while covering your costs/taxes you go out of business. If the cost hike is high enough for you, it's probably high enough for others to raise their prices as well, keeping you competitive.


As for how it is spent, the waste at city hall is pretty disgusting, but that is just something you deal with in any large organization. It's a little worse thanks to the public union, but it's not much different in any of the large O&G shops downtown. I hate things like bike lanes as much as any pedestrian/driver would, but compared to the costs of supporting developers in the middle of nowhere, it doesn't even make a dent in the budget.

Things that need money :
-LRT upgrade to replace 30 year old cars
-LRT cars for 4 car trains
-NC LRT
-SE LRT
-8th Ave Tunnel to allow for new LRT
-Fix Crowchild madness
-Fix Deerfoot madness

Those are 7 huge projects I can think of, just off the top of my head, that will require large sums of money. Let's not trick ourselves into thinking someone else will pay for it.

[SebC]

Originally Posted by Flamenspiel

What are they doing with all this new money?

As far as major Canadian cities go, we spend the most on roads (per capita) and have the lowest residential taxes. The infrastructure and monetary debts that we've accrued to do that are now catching up with us.

[Slava]

Originally Posted by SebC

Sure they do, they just do it through their landlords.

And I suppose any vacancies pay no property tax, right? Or maybe the logic doesn't flow that far...

[SebC]

Originally Posted by Slava

And I suppose any vacancies pay no property tax, right? Or maybe the logic doesn't flow that far...

I'm not entirely sure what you're saying here, so rather than risk jumping the gun, I'll ask you to explain. Explain, please!

[You Need a Thneed]

Originally Posted by Flamenspiel

Well, that's not the way it really works though. There are many things that a landlord has to consider when setting the rents. You have to factor in things like the market rate and quality of the tenants, it is by no means an automatic decision to pass taxes increases on to tenants.

In any case, what I am trying to get across is that to most practical people the way to judge a government is how they handle your money. Never mind Nenshi, I'd like to see a record of how all these municipal pols voted on all these budget measures, and maybe even some non budget votes that speak to competency.

What are they doing with all this new money?

Voting records are all public information.

What are they doing with all this new money? Others than building 4 new rec centres and a badly needed downtown library? And that doesn't count lots of small little things.

Generally, the city hasn't received the major fruits of Nenshi's labours yet. These Rec centres, the library, the Airport Trail tunnel, etc, aren't finished yet, or are just in the process of starting out.

There's some policies that he promised he'd do, that have been done partways, not because he couldn't do them, but because the rest of council wouldn't follow. Secondary Suites, Development Land subsidies.

Almost biggest of all, as mayor he represents the city to the outside world, nationwide, and worldwide, and he's been doing an exceptional job at that - promoting our city, which is starting to draw people and economic power here.

[Slava]

Originally Posted by SebC

I'm not entirely sure what you're saying here, so rather than risk jumping the gun, I'll ask you to explain. Explain, please!

Who really pays the property tax? The owner of the property. We've had this discussion before. I understand that you disagree, but it doesn't change the facts. I still stand by my thought that its pretty easy for renters in the beltline to suggest that homeowners 'further out' (at some mysterious, undefined line) should pay more property tax, when (a) they pay none directly and (b) they would be relatively unscathed by an increase to these people.

[bizaro86]

The biggest thing that annoys me with Nenshi is the planning piece. We've been hearing since he was elected how this was going to fix our broken planning system. But there has only been one ARP implemented (North Kelvin Grove) since he was elected, and it didn't include any density increases. That's a worse record on proactively using our existing landbase than Bronco or Duerr. Bike lanes don't fix the fact that R1 zoning abounds right near LRT stations. I want TODs dammit.

[SebC]

Originally Posted by Slava

Who really pays the property tax? The owner of the property. We've had this discussion before. I understand that you disagree, but it doesn't change the facts. I still stand by my thought that its pretty easy for renters in the beltline to suggest that homeowners 'further out' (at some mysterious, undefined line) should pay more property tax, when (a) they pay none directly and (b) they would be relatively unscathed by an increase to these people.

Well, I agree that the property owner is the one who signs the cheque, but the person who bears the cost is the property user. And, in the long run, if we assume market equilibrium and normal economic profit for the landlord, the property taxes on vacancies are actually paid by the renters as well! An overly high vacancy rate is something that could break equilibrium, but a normal, frictional vacancy rate is a cost that gets passed to consumers. (This applies to commercial buildings too, by the way, not just residential.)

And while it is true that it is in the selfish interest of a beltline renter to ask for the suburbs to pay their share, it is equally easy for the burbs to ask for continued subsidization, as they are the ones who benefit from it. What matters is the overall system perspective, where subsidizing the type of growth that is more expensive to service is worse for the system (which is the city that we all pay for) than making growth pay for itself. An efficient market has more consumer and producer surplus than an inefficient one.

[Slava]

Originally Posted by SebC

Well, I agree that the property owner is the one who signs the cheque, but the person who bears the cost is the property user. And, in the long run, if we assume market equilibrium and normal economic profit for the landlord, the property taxes on vacancies are actually paid by the renters as well! An overly high vacancy rate is something that could break equilibrium, but a normal, frictional vacancy rate is a cost that gets passed to consumers. (This applies to commercial buildings too, by the way, not just residential.)

And while it is true that it is in the selfish interest of a beltline renter to ask for the suburbs to pay their share, it is equally easy for the burbs to ask for continued subsidization, as they are the ones who benefit from it. What matters is the overall system perspective, where subsidizing the type of growth that is more expensive to service is worse for the system (which is the city that we all pay for) than making growth pay for itself. An efficient market has more consumer and producer surplus than an inefficient one.

Point is that while a business owner (in this case a property owner) might use revenues to pay for the taxes, he also might not. You have no idea. Maybe he is operating at a level to cover fixed costs only and the variable are over and above that level for the short term (which I'm sure that you'll acknowledge could be all too common from an economics point of view). At the end of the day though, the tenant is not responsible for those taxes. You can protest that fact, but its the reality of the situation. If the property sits vacant, the owner must still pay; if the renter fails to pay rent, the owner must still pay. The entire tax liability here is the property owner, and exactly zero belongs to the renter.

[Tyler]

Originally Posted by bizaro86

The biggest thing that annoys me with Nenshi is the planning piece. We've been hearing since he was elected how this was going to fix our broken planning system.

Umm.. Cut Red Tape. nextCity. Transforming Planning. Rollin Stanley?..

[CaptainYooh]

Originally Posted by Muta

What makes you believe Nenshi doesn't have 'common sense'? Furthermore, how do you define common sense as it relates to municipal politics?

Just curious.

You will not like my answer, probably. Someone boring and methodical, when it comes to setting up the policy. This is what the primary role of City Council is – setting the policy for the Administration to follow and implement. Mayor's role in this is to lead Council in doing so by ensuring that it is not dysfunctional. Stephen Mandel comes to mind as a good example - good, honest, straightforward and practical mayor. Nenshi's tenure so far has all been about Nenshi.

Example: it would be good common sense not to debate a land use policy issue as it relates to the fully conforming land use application at Public Hearing. If you, as a Mayor, don't like the policy, discuss it at your pleasure in a separate policy meeting. I've seen him spearheading a 4-hr debate (no kidding) on why is the Administration approving a fully compliant application? He was just enjoying the lively debate at the expense of everyone else in the Council chamber waiting for their items to come up on Agenda. Totally ridiculous and inappropriate.

[SebC]

Originally Posted by Slava

Point is that while a business owner (in this case a property owner) might use revenues to pay for the taxes, he also might not. You have no idea. Maybe he is operating a level to cover variable costs only and the fixed are over and above that level for the short term (which I'm sure that you'll acknowledge could be all too common from an economics point of view). At the end of the day though, the tenant is no responsible for those taxes. You can protest that fact, but its the reality of the situation. If the property sits vacant, the owner must still pay; if the renter fails to pay rent, the owner must still pay. The entire tax liability here is the property owner, and exactly zero belongs to the renter.

A business owner who is consistently not recovering his taxes from his consumers isn't going to be a business owner for very long. The market rate for renting includes taxes. If taxes go up, market rate for rental goes up too.

[MarchHare]

Re: do renters pay property tax?

For those of you who think that they do, I assume you think that way because a landlord might pass on an increase in property tax to their tenants by raising the rent. But ask yourself this: if there was a property tax decrease, would the landlord pass on those savings by lowering the rent by an equivalent amount? Of course not.

The price of rent is dictated solely by market forces. What is the maximum amount a tenant is willing to pay each month to live in that unit? The cost of business to the homeowner (mortgage payments, property tax, management fees, upkeep and improvements, etc.) is irrelevant.

[CaptainYooh]

Originally Posted by MarchHare

Re: do renters pay property tax?

For those of you who think that they do, I assume you think that way because a landlord might pass on an increase in property tax to their tenants by raising the rent. But ask yourself this: if there was a property tax decrease, would the landlord pass on those savings by lowering the rent by an equivalent amount? Of course not.

The price of rent is dictated solely by market forces. What is the maximum amount a tenant is willing to pay each month to live in that unit? The cost of business to the homeowner (mortgage payments, property tax, management fees, upkeep and improvements, etc.) are irrelevant.

fyp
Of course, yes. Exactly because of the market forces. Rental business is a 4% cap rate business. Not a lot of wiggle room. Each empty unit is a big hit to the bottom line. Landlords need their buildings as full as possible. The effect of an empty unit in a smaller apartment building, say a 10-suiter, is devastating to the cashflow, so you want to stay competitive in order to have low vacancy rate. A sudden decrease in a cost base results temporarily in a healthier margin, yes; but at the same time is opens up an opportunity gap resulting in stiffer competition for it. Consequently, the gap closes, as competing landlords lower their prices to an acceptable level.

[SebC]

Originally Posted by MarchHare

Re: do renters pay property tax?

For those of you who think that they do, I assume you think that way because a landlord might pass on an increase in property tax to their tenants by raising the rent. But ask yourself this: if there was a property tax decrease, would the landlord pass on those savings by lowering the rent by an equivalent amount? Of course not.

Actually, yes. Perhaps not immediately, but once the market balances the savings would be passed to renters.

Originally Posted by MarchHare

The price of rent is dictated solely by market forces. What is the maximum amount a tenant is willing to pay each month to live in that unit? The cost of business to the homeowner (mortgage payments, property tax, management fees, upkeep and improvements, etc.) is irrelevant.

The property tax rate is a market force! So are the other supplier costs. A tenant would pay more to live in a unit if the tax rate is higher because the alternative, to buy a place, has also become more costly.

If the tax rate goes up (or down), and demand is inelastic, then supply would shift down (or up). Rental units could be converted into condos. Perhaps the new rental buildings planned for development wouldn't proceed.

Yes, those are things that take a bit of time, but the long run is what's important when determining whether or not renters pay property tax.

Edit: CaptainYooh agrees with me. I retract my position.