New tax in Hamilton unexpectedly voted down at council

Two Hamilton councillors have taken to social media to express their disappointment after a vote to pass a bylaw instituting a tax on vacant residential properties unexpectedly failed this week. 

On Nov. 22, a vote on the incoming vacant unit tax (VUT) took place and the tax, which was slated to be imposed on properties that remain unoccupied for more than 183 days in a year, was defeated 6-6-1.

The tax was supposed to come into effect in 2024. 

“For [Hamilton] council members to kill the Vacant Homes Tax once it reached the bylaw stage for implementation is messy governance at best,” Ward 3 Coun. Nrinder Nann wrote on X. 

For #HamOnt Council members to kill the Vacant Homes Tax once it reached the bylaw stage for implementation is messy governance at best. It lacks professionalism & disregards the work gone into the program to date, and is a slap in the face of Council’s declared housing crisis.1/

— Nrinder Nann (@NrinderWard3) November 22, 2023

“It lacks professionalism [and] disregards the work gone into the program to date, and is a slap in the face of council’s declared housing crisis.”

Nann said she wasn’t present for the vote because she had to leave due to a family health matter. 

“To come back to my desk to this was beyond disappointing. I have NEVER experienced a by-law shot down at council in this manner before. [Vacant home taxes] have been successful in every city that has implemented them. [Number one] goal of the program is to fill empty homes/units. [Number two] revenue generated goes to more affordable housing. With today’s decision, term of council priorities on affordable housing have been tossed out the window.” 

Ward 2 Coun. Cameron Kroetsch, who was also not present for the vote, said he believes a procedural issue is to blame for stopping the tax from being implemented. 

Really disappointed there was a surprise no vote on the Vacant Unit Tax yesterday and sorry I had to leave before it happened. I would have voted in favour, as I have done consistently on the VUT. For anyone following this, here’s my detailed breakdown. #HamOnt

— Cameron Kroetsch (@CameronKroetsch) November 23, 2023

“Really disappointed there was a surprise ‘no’ vote on the Vacant Unit Tax yesterday and sorry I had to leave before it happened. I would have voted in favour, as I have done consistently on the VUT,” Kroetsch wrote on X.

Telling readers that it’s normal for councillors to miss votes occasionally, he said he believed yesterday’s vote was a formality and that he had no reason to think a vote on an enabling bylaw would lead to the bylaw being defeated. 

“Had I known that there was an important vote coming up, I would have rearranged my schedule to be there,” he wrote. 

Kroetsch said he isn’t sure his colleagues intended to defeat the bylaw during the vote. 

“I think some of my colleagues did the wrong thing in a way, but I’m not sure it was completely their fault or intention. Every member of council is entitled to vote in favour or against an enabling bylaw. That likely shouldn’t be allowed though,” he wrote, adding that an enabling bylaw follows a vote that’s already taken place.

Council voted in favour of the tax earlier this year. 

Kroetsch argued that enabling bylaws should appear as consent items on council agendas, which are typically passed “as a matter of course.” He also wrote that even if a councillor does not agree with a bylaw that has been passed, they should vote yes on an enabling bylaw that has already been debated and ultimately approved. 

“These bylaws could also be put forward in such a way that if a member of council wanted to vote against them, that member would have to ask for a reconsideration vote. That’s what should have happened yesterday as the enabling bylaw was already the result of a Council decision,” he wrote. 

“While I can’t speak to why that didn’t happen, this has revealed our system doesn’t work.”

Kroetsch wrote that he expects council will be able to vote on the tax again. 

“My guess about next steps is that we’ll have to revisit the matter. Doing so may mean relying on the good faith and trust of colleagues to navigate the procedural part of this so we can vote on it again. I know where I stand and that’s not going to change,” he wrote.

A city spokesperson told hamilton.insauga.com that city staff members are meeting this afternoon to discuss next steps.

The revenue generated from the VUT was intended to bolster programs aimed at alleviating the city’s housing shortage. 

The city said the 1 per cent tax on vacant units would incentivize property owners to ensure their buildings are occupied, thus creating more housing. Any homeowners who fail to declare their vacant property to the city could face a fee of $250 and further fines should they refuse to comply with the tax. 

Some exemptions are built into the VUT, such as when a homeowner dies or leaves temporarily due to renovations or another reason. 

Ward 8 Coun. John-Paul Danko drafted the original motion calling for the tax, which was passed initially at a general issues committee meeting on Jan. 18.

The decision to impose a vacant unit tax aligns Hamilton with other major Canadian cities, such as Vancouver, Toronto, and Ottawa, which have already implemented similar measures to address their own housing crises.

– With files from Nandika Ravi