London PM Assocation Tenant Tax Letter

[Note: This letter came in to my possession via Bill McKeay, a REIN member in Ontario. The original thread was on myREINspace. It is reprinted here in it’s original form as a resource. The opinions expressed are not mine. The original file as I received it can be downloaded here. ]

by Kim Walker

London City Council is proposing to impose a Tenant Tax of $1.50 per rental unit per month to pay for the cost of Licensing rental properties of 6 units or less. With about 20,000 rental units affected by the proposed Tax, the City will extract more than $360,000.00 from all tenants living in the affected properties. While the monthly tax of $1.50 may seem like a small amount, once it is in place, Council is free to raise the tax annually and you can be certain they will. Council will also extend the Tenant Tax to the rest of London’s tenants: they’ve already tabled a proposal to extend it to all tenants living in rental buildings of up to 5 stories in height, so its just a matter of time.

Why punish residential tenants with a Tenant Tax?

The proposal for the Tax, under the guise of a licence fee, emerged from the deliberations of the London Housing Advisory Committee (LHAC), spearheaded by Sam Trosow, an “old North” home owner who has campaigned against student housing and its impact on the “character” (ie: property values) of his neighbourhood. As Chair, Sam persuaded the LHAC that noise, garbage and parking problems caused by students in smaller rental properties could be resolved if the owners of those properties paid a license fee and submitted to annual inspections. Apparently, it did not occur to LHAC members that the City’s noise, parking and garbage by-laws, if enforced by City Hall, would address those issues. The attraction of licensing, however, is that it makes it easier for the City and neighbours to harass owners of student housing to force them out of the neighbourhood.

Meanwhile, the bureaucrats at City Hall saw the licensing proposal as an opportunity to generate revenue for City Hall and pay for an expanding bureaucracy. Imposing a Tenant Tax on a per unit basis is a cheap way to tax tenants and, with over 50,000 rental units in the City, a small tax imposed monthly can generate lots of revenue. The potential upside is huge because the Tenant Tax can be raised incrementally each year. Better still, by calling it a “landlord license fee” needed to pay for the cost of enforcing behaviour of “bad” tenants (who in Council’s view are apparently created by “bad” landlords), City staff quickly got the anti-landlord Council Members on side.

City Hall has underestimated the intelligence and resolve of tenants to ensure that they do not become the latest victims of a City Hall tax grab. Public meetings on the Tenant Tax had to be held at Centennial Hall because of the large number of tenants who demanded that their opposition to the Tax be voiced. Tenants have emailed, faxed, telephoned and otherwise told Council that they oppose the Tenant Tax and support enforcement of existing by-laws to deal with problems created by a small group of irresponsible tenants. Tenants at public meetings also rightly asserted that they should not be punished by a new Tax to serve the private agendas of some vocal “old North” home owners; some empire-building bureaucrats; and the blind ideology of out-of-touch Council members.

Most Londoners understand that a licensing bylaw and Tenant Tax will not resolve neighbourhood conflicts in areas of the city adjacent to post-secondary institutions that have been plagued with noise, garbage and parking problems. Most Londoners know that Ontario already has the most stringent regulation of landlords and property standards in North America. In Ontario, landlords of sub-standard housing units can have their rents frozen; have repair orders imposed; and can be forced to pay rent rebates to tenants by Ontario’s Landlord and Tenant Board. Most other large municipalities across Ontario have therefore rejected taxing tenants and instead have enforced existing bylaws.

London City Council went to great lengths during recent budget debates to reassure Londoners it was doing everything to limit tax increases yet they are playing a “shell game” by cynically calling their per-unit Tenant Tax a “licence fee”, confident that tenants and the public will be fooled. Tenants, Landlords and the thinking public will not be duped by such facile tactics and will show their dissatisfaction with Council’s behaviour when they vote next year.

Kim Walker is President of the London Property Management Association, a non-profit association representing residential rental housing owners and managers.