Apartment Renters Looking For Help With Tax Fairness Campaign

A group of apartment tenants is tired of paying unfairly inflated tax rates, and is looking for support from apartment renters across Hamilton to help close the gap between residential and multi-residential taxpayers.

Andy Cranbury and the Governor's Green Tenants' Association has presented Councillor Art Samson with a 160-name petition, representing the majority of the building's 200 units.

Their municipal tax rate is currently 2.74 times that of residential taxpayers. Eighteen per cent of their monthly rent goes directly to municipal taxes.

"The municipal election is coming up this November," Mr. Cranbury said. "Tenants should be asking their councillors about this. Ask them why am I being suckered?"

The tenants believe they are being taken advantage of by a municipality afraid to increase the tax rate on homeowners, who are typically more active and likely to vote than apartment tenants. But Mr. Cranbury points out that about 30 per cent of Hamilton residents rent apartments. He figures those tenants can have a political impact.

"If we can rouse the population and have them informed before November then city hall has to do more than take our petition and file it," he said.

He believes the higher tax rate for apartment renters is a major contributing factor to the local homelessness problem. In just one year, there was a turnover of 78 out of 200 units. But he figures that transient nature contributes to the ability to take advantage of tenants.

Mr. Cranbury wondered aloud what tenants get in return for their 2.74 to 1 tax ratio.

"We get all the same services, except garbage collection," he said. "So we should be paying less than residential."

City of Hamilton taxation director Larry Friday says the situation isn't that simple. He agreed the current residential tax rate in Dundas is 1.56 per cent while apartment renters pay a tax rate of 3.77 per cent. But he said because that rate is multiplied by the assessed value of a home, or apartment unit, tenants actually pay less in taxes.

Mr. Friday estimated, based on approximate assessments, that an average tenant at Governor's Green pays roughly $2,700 in taxes while the owner of a house assessed at $200,000 pays $3,129 in taxes.

"When you look at taxes, next to tax rates, you can see (apartment tenants) pay less on average," Mr. Friday said. "Are they shouldering an unfair burden? I don't know. It's a fair question.

"The money is going to come from somewhere. From my perspective it's not an unfair burden. They're paying for their share of services. They still drive on the roads. Their garbage still gets trucked to a city landfill."

Those arguments didn't faze Joe Hoffer, a lawyer with Cohen-Highley law firm in London and expert on property tax assessment appeals and the tenant protection act.

"Indeed tenants typically pay a multiple of what residential taxpayers pay," Mr. Hoffer said. "It has been a tax grab for municipalities. It's buried in the rents so it's harder for people to conceptualize that tenants are in fact getting ripped off."

Mr. Hoffer pointed out that a reduction in the multi-residential tax rate would benefit apartment landlords, who are required by law to pass that savings on to their tenants by reducing their rent.

He's only aware of one successful effort to equalize tax rates. Landlords, tenants and the City of Ottawa all worked together to lower the gap.

"It takes volunteerism from tenants and organization of tenants, which is difficult to do," Mr. Hoffer said.

"They all have to work together. Most tenant groups don't like landlords. There's usually no will from the politicians and no organization of tenants."

John Dickie is a residential tenancy lawyer with Dickie and Lyman in Ottawa. He also chairs the Eastern Ontario Landlord Organization.

Mr. Dickie said the apartment tax ratio in Ottawa was reduced from 2.37:1 to it's current 2.15:1, saving capital city apartment tenants more than $20-million.

"The argument that apartments should be taxed at a higher rate because they are valued less than single-family homes is unsound," Mr. Dickie said. "No one looks at an ordinary home and says it should be taxed at a higher rate because it is valued less than a mansion. The comparison between apartments and houses should be no different."

Mr. Dickie agrees municipal councillors don't want to treat tenants fairly because they hate to raise taxes on homeowners, who vote more than apartment renters - renters who often don't realize they pay property taxes through their rents.

"The way we achieved progress in Ottawa was by tenants and landlords working together," he said, suggesting the Governor's Green group contact the Hamilton District Apartment Association, which represents landlords.

Arun Pathak, a Dundas resident and president of the apartment association, said its membership "is very strongly behind the principle of equalization" of the tax rates.

Mr. Pathak said fairness in tax rates would reduce apartment rents by about 12 per cent - or nearly $100 a month on a rent of $800.

"The impact of a rent reduction in the range of $100 on the poor people of our city would be immense," Mr. Pathak said. "These tenants are using the food banks and go without medications and basic essentials because they are taxed at a rate more than twice what more affluent homeowners are paying.

"Municipalities have generally not moved towards equalization because it will involve relatively minor increases to other property tax classes. However, the issue is one of fairness and it is indefensible to let tenants subsidize homeowners taxes."