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Image: Courtesy of Rogers TV Moncton City Council

Property developer suggests changes for Moncton’s housing crisis

By Tara Clow May 7, 2024 | 1:48 PM

Greater Moncton’s housing crisis is getting worse, according to one property developer.

Bill Hennessey spoke to Moncton City Council on behalf of the Chamber of Commerce for Greater Moncton on Monday night.

He says high property taxes are partly to blame for the lack of housing starts.

“In 2023, 15, 717 people moved to Greater Moncton. That means currently we need 6,521 housing units,” Hennessey says, but he adds that we are short of that by 3,744 units.

“Four months ago, I heard a lot of people complaining about property tax. So I got two people to volunteer their time and myself. We did a deep dive. We took the whole system apart in terms of structure. In that room, we had 3,800 doors, we had another 1,000 under development. The thing that really freaked me out quite candidly, was the 3,897, the stuff that’s sitting on people’s desks that they’re not mobilizing because they can’t make it commercially viable,” Hennessey told City Council.”

The question at that point was why the supply wasn’t coming, and they kept looking back at property tax.

“Here in New Brunswick, we have what we would call a unique property tax system. So if you’re in Moncton, your rate is 2.074. It’s 1.968 if you’re in Fredericton. 2.2 in Saint John. Dieppe is about 2.1. St. John’s, Newfoundland, is around 0.83. In Halifax, it’s 1.1. Toronto it’s 0.66. The national average is 0.9. Our property tax is double, and that’s a problem,” Hennessey says.

He adds that the secret we all know but no one talks about is that tenants pay property tax, not the landlords.

“Landlords collect property tax. A tenant paying $1,900 in rent is paying $515 a month in property tax. How does that stack up against the other cities? That $515, in Halifax, it’s $287, St. John’s $207 and Toronto is $226.”

With assessments skyrocketing in the Greater Moncton region, landlords are forced to increase rent to pay for property taxes.

Some solutions suggested included removing the HST, eliminating the double tax, and reducing the property tax rate to have parity with Halifax.

“The simplest way to do this is to implement a percentage of Effective Gross Income, which means, anyone who pays income tax will know whatever you pay in income tax depends on how much money you make. So if you choose to charge lower rents, you pay less property taxes, than if you charge higher rents, that’s not what we’re doing today,” Hennessey says.

He feels there is tweaking that needs to be done in the property tax system that will mean benefits for everyone.

“Every building that goes up will pay property tax for the next 50 years. We don’t need to have it all today,” Hennessey says.