Question 4: Kitchener staff to recommend ggar vacant home tax 1 Y, (12 pts) by Luke Schulz, June 4 2022. Following earlier direction from City of Kitchener council to examine the feasibility of implementing a vacant home tax, city staff are set to present their ndings on Wednesday -- recommending against the implementation of the tool. Those discussions began With a motion passed on Dec. 13 last year, as part of Kitchener's continuing work in addressing the need for affordable housing and greater housing supply in the market. Made possible by the Ontario Fair Housing Plan in 2017, the legislation allows municipalities to implement a tax on vacant units classied as "residential property," in order to encourage owners to either sell or rent their properties. City staff further emphasized that the tool is designed to improve housing supply, rather than serving as a revenue tool for the municipality. In examining the current status of the Kitchener real estate market, a staff report set to be delivered to council notes that current supply of housing units per capita in the market area is "well below the national average," and has been on the decline since 2016. It notes that the overall rental vacancy is at an "unhealthy level" of 2.1 per cent as of October of last year. Staff also examined studies on the impact of "foreign buyer taxes" on housing prices, nding that available studies insist the effect on housing prices are "minimal and temporary in nature," with a lack of data correlating a vacant home tax to price decreases on the market. As part of their packet to council, City of Kitchener staff also surveyed municipalities in neighbouring areas and elsewhere in Ontario that are studying or considering a vacant home tax, including Hamilton, Niagara Region, Halton and Mississauga -- with all surveyed municipalities looking to allocate revenues from the tax to support initiatives in affordable housing. Staff note the City of London made the decision to not implement a VHT, with costs of a program likely to be higher than any revenues. While the City of Toronto has implemented a one per cent vacant home tax, results of the tool are yet to be determined with the taxes to be collected in 2023 though the tax is estimated to bring a revenue of upwards of $66 million dollars. While the funds may seem attractive, staff note that both population sizes and housing markets pay a signicant role in determining the value of the VHT, also noting that " signicant staff resources" are required to administer the program. With a population of roughly 257 thousand, and approximately 84,000 homes, staff note that Kitchener is "much smaller" on scale when compared to Ottawa, Toronto or Vancouver, all of which have implemented a vacant home tax. But determining just how many homes are currently vacant in the municipality remains a challenge; staff insist that requiring every property owner to attest their property isn't vacant annually is a very "time and resource consuming activity," wrought with potential challenges. Basing their estimates on water consumption analysis, wherein water consumption levels were either at "minimum or zero for at least six months," they found roughly 100 to 125 homes in Kitchener could be vacant -- showing a "very low vacancy rate" when compared to larger municipalities. Data from the Canadian Mortgage and Housing Corporation also indicates Kitchener-WaterlooCarnbridge may have one of the lowest residential vacancy rates in Canada at two per cent. In implementing a VHT in Kitchener, staff expect a "high end" estimated revenue generation of $406,000 with a one per cent tax -- though expenses to deliver the program would likely exceed the revenues, leading to a net loss for the city. Costs in establishing the tax would include changes to the billing system, hiring of additional staff to "audit, review, deal with public inquiries" and the establishment of an appeal process, on top of printing, advertising and communication costs. Staff also note that while the City of Kitchener has developed a \"robust affordable housing strategy," the implementation of a Vacant Home Tax was not considered or recommended as part of that strategy. Members of the city's Finance and Corporate Services Committee will discuss the reports findings on Wednesday at 12:00 pm. a) Illustrate the VHT tax problem in a Supply/Demand framework and show the DWL b) What are the reasons why the staff recommends against the vacant home tax? 0) Illustrate graphically the statement \"staff expect a "high end" estimated revenue generation of $406,000 with a one per cent tax\