Who should cover the property taxes after London gives school boards more time to choose sites for new schools?

London city councillors debated tax relief for development lands slated for potential schools, CTV's Daryl Newcombe explains.

London has more than doubled the length of time that developers must reserve potential school sites in new subdivisions, but a debate about who should pick up the property taxes while the property sits idle divided council.

On Tuesday, council supported extending the amount of time local school boards have to exercise their option to acquire a School Block parcel from three years to six-and-a-half years.

The change better reflects the period of time it takes school boards to receive approval and funding for a new school from the provincial government.

However, there wasn’t consensus about whether developers deserve some form of property tax relief during the time that their land awaits a decision from the local school boards.

“That is flipping the [property tax] bill from a private company and putting it on the taxpayer. Putting on the rest of London,” argued Coun. David Ferreira.

Deputy Mayor Shawn Lewis shot back, “They’re not going to eat that loss. They’re going to just add it to the price of a new home. So, when we talk about housing affordability in these chambers, you have to look at all aspects of housing affordability.”

City hall consults with four school boards responsible for the planning of new school locations, Thames Valley District School Board, London District Catholic School Board, Conseil scolaire Viamonde, and Conseil scolaire catholique Providence.

In some cases, the option to acquire a school block expires and school boards have faced the long and costly process of expropriating the necessary land.

Mayor Josh Morgan reminded council, “The point here is about having adequate land supply, for the right period of time, for schools to be built in growing neighborhoods.”

Ferreira argued that if a developer doesn’t pay the full property taxes on the property, then city hall must find other ways to recoup the lost revenue.

“As far as I’m concerned, a private developer has ‘costs of doing business’ and this is one of those costs. This is not one of those costs that we should be paying for,” he told colleagues.

“This is not a private developer’s cost,” countered Lewis. “This is being added to the price of homes, period. Full stop.”

Provincial rules would likely forbid city hall from exempting the School Blocks in new subdivisions from taxation, but the properties could potentially be taxed at a lower rate by rezoning them as community facilities.

Coun. Corrine Rahman emphasized that no decision is being made at this time, simply a request for city staff to prepare a future report about options, limitations, and what other cities are doing.

Rahman added that developers can already appeal their property tax bill to the Municipal Property Assessment Corporation (MPAC).

“Even if all we do is say, ‘Here’s what we can’t do, here’s what your process is through MPAC,’ I think it just it goes to show that we’re willing to think about this in a collaborative style,” she said.

The request for the staff report was supported by council 11-3 (Ferreira, Trosow, and Hopkins opposed).

Afterwards, the mayor told CTV News, “This is all about getting a longer period of time to allow school boards the option to exercise options on those blocks, and trying to not have those costs passed on to the existing homes in the area that are being built.”