by Colin Smith
Developers who sit on serviced sub-division land in Morinville without building may be subject to higher taxes in the future.
At its regular meeting on Tuesday, Mar. 28 council gave the first reading to a bylaw establishing an assessment sub-class for residential properties that have been serviced and are ready for construction but have remained vacant for a substantial period of time.
The creation of the “serviced undeveloped residential” assessment sub-class would allow a higher tax rate to be imposed on these properties.
Councillor Maurice St. Denis made the motion that approved first reading of the bylaw.
“It feels like something like this is long overdue,” he said. “If it does expedite development of those parcels that sit idle for a very long time, and there are examples in this community, I think it’s a big win.”
In his report to council on the proposed bylaw, Financial Services Manager Travis Nosko outlined a number of objectives it is intended to meet.
Increasing the tax rate would encourage the owners of such properties to either fully develop them or sell them to someone who will.
The hope is that the bylaw will result in appropriate development so that property tax revenue the municipality receives is in line with the services infrastructure burden it is taking on.
“It really encourages developers to make sure they are right-sizing their developments to fit the demand and the need and the interest that exists for locating in the town of Morinville so we don’t end up having developments that are overbuilt and then sit empty for an extended period of time,” said Nosko.
“So it’s meant to collect some revenue and encourage the behaviour we are looking for from developers in town.”
A higher tax rate would also help to prevent “missing teeth” developments, in which there are a number of undeveloped properties in what is otherwise a fully built-out community.
Nosko noted that these properties can be a nuisance as a result of weeds, dust and overgrowth and inconvenience neighbouring properties when construction takes place that is out of synch with the remainder of the community.
Serviced undeveloped residential properties are defined in the bylaw as those remaining vacant for more than four years following the issuance of the final acceptance certificate for its subdivision.
Once the bylaw is passed, the town’s contracted assessor will include such properties in the new assessment sub-class.
They will then be taxed at the commercial tax rate established for that year.
The increased tax revenue generated from vacant properties will offset some of the costs of depreciating municipal assets in the ground, which will require maintenance, renewal and replacement.
According to Nosko, this type of assessment subclass is common in the Edmonton metropolitan region.
St. Albert, for example, applies higher rates of taxation to serviced undeveloped residential properties after seven years.
The four-year window suggested for Morinville was chosen based on collective experience relating to subdivision development in the town in the past, he said.
