Developer says Iqaluit’s property tax increase is ‘very reasonable’
Nunastar Properties Inc. president calls on federal and territorial governments to help fund infrastructure projects in Iqaluit
Nunastar Properties Ltd. President Ed Romanowski says the City of Iqaluit’s property tax and fee increases are reasonable, but that the higher levels of government need to step in to help build infrastructure in the community for the cost of living to go down. (File photo by David Venn)
The City of Iqaluit’s decision to increase property taxes and water and sewage fees is “very reasonable,” but signals a larger issue that will need help from the federal and territorial governments to solve, says a land developer.
Iqaluit city councillors approved a three per cent increase in property taxes, a 0.5 per cent increase in water fees and a two per cent increase in sanitation fees this week.
With rising inflation, higher costs for fuel and development, on top of the water emergency and ongoing pandemic, the increases “could have easily been higher,” said Nunastar Properties Inc. president Ed Romanowski.
Romanowski said he expected property taxes to increase two to three per cent this year and that, since the city made changes to its policy on taxing mixed-use businesses, his company has been able to absorb some of the increasing costs and “smooth [rent increases] out.”
For an average two-bedroom suite in an apartment building, a three per cent property tax increase equals a $4 increase in operating costs per month, he said, adding that is without the increase in water and sewage, fuel, insurance and maintenance costs, among others.
Coun. Kyle Sheppard, who is the finance committee chairperson, said the city tried to keep the increases low this year, even though it is working towards funding large projects, such as upgrading the water treatment plant and sewage system.
Both Sheppard and Romanowski said the high cost of extending water and sewage systems are some of the biggest barriers to development in the city, and that developing on the outskirts of town is much more expensive.
“The bigger picture is that anything that the city can do to keep costs down is just another one of those enabling tools that helps further investment to be made in the community,” Romanowski said.
Right now, Nunastar is looking at developing the lot beside Building 350, across from Arctic Ventures, and even that property in a central location, he said, needs a sewage tank that must be emptied during off-peak hours.
The development is called Astro Hill Gate, or building 351. It’s slated to include 31 residential suites and 3,500 square feet of office space and Romanowski estimates it will be available for move in sometime next year.
With the price of development in Iqaluit about 2.3 times more per square foot than Toronto, adding more costs makes it difficult to build homes and commercial space, Romanowski said.
“It’s not just about utility costs, it’s about, what’s the environment for investment? That environment needs to be there in order to solve the housing crisis.”
A storage tank will cost Nunastar hundreds of thousands of dollars, Romanowski said, which will be partially covered in rent prices. But if the infrastructure is there, which is what the city is looking to continue upgrading this year, those costs can go down.
“That is going to have a far greater effect on affordable housing in the community than the landlord increasing the rents,” he said.
He said the costs for water, sewage, property taxes and rent will not decrease unless the federal and territorial governments help pay for better infrastructure, such as water lines and a water treatment plant.
“We need to see the commitment from the senior level of government,” he said. “There is some coming, but there needs to be a lot more.”
Do I care that Nunastar thinks the increases are reasonable? Not really. When he says they’ll be able to “smooth rent increases out”, I’m pretty sure her just means they’ll increase rent as they see fit. Rising property taxes doesn’t affect them in any significant way. I’m sure they consider rent for their properties to be reasonable too.
The only reason Nunastar is supporting the City on this increase is because the City caved into the developers demand, and found a way to lower their tax base for mixed residential and commercial properties they have.
City Of Iqaluit Bylaw #928 Property Class Amendment to By law # 887
Compliments of Kyle Sheppard
Reasonable for a city that regularly provides contaminated water, crumbling infrastructure and poor to often non existent services? Not really.
There are two ways of collecting property tax, residential and commercial entities. By the way residential properties if solely owned and lived in and are not renting a room do not make income, why keep taxing these type of residential property owners, tax the commercial as they are the majority. How come the city of Iqaluit can think this is responsible taxation, is utterly ridiculous, we need stake holders in our hamlets and owning your home will provide this, also when you own your own home you get shafted by the government and get given 400 dollars a month instead of the places costing well into 5000 dollars to run a single unit once all is said and done for the month which the government does pay to commercial entities to have there worker there. Utterly no thought to improving ownership, only thought is lets coddle the commercial entities that have made money hand over foot at an atrocious rate. yay city of iqaluit!
“That is going to have a far greater effect on affordable housing in the community than the landlord increasing the rents,” he said.
Well said regarding Landlords + rents (including subsidized public and staff housing).
Now address the RATEPAYER scenario. They have no one to pass the costs onto.
Congrats developers! This will free up some more cash for you so you can buy up more neighborhoids in town.
So you are saying that providing 31 new residential units next year is a negative to the community?
Those developers should not have access to property where they can build further units?
In a hamlet where we have a housing crisis?
Totally agree so many vacant houses by ventures need low cost housing here. The city isn’t going to develop it. Would anyone even trust them to at this point?
Adding some new apartments to Iqaluit is ok, but I think the previous commenter was just expressing the frustration that a lot of feel with regards to buying a home here. Developers can get these kinds of lots, but the average person here (and even a lot of us who make good money) can’t get any land to build a home. The city needs more housing for all, more public housing, more apartments, more single dwelling units.
Oh no – now the people who bought homes for $500K, 5 years ago, will have to sell their homes for $1M because the $875K that they currently have it listed for won’t cut it anymore with these rate increases. Won’t someone ever think of their investment?!!?
Or the guy on the plateau trying to sell his house for 800k, that he paid 300k for… Starting price was 900k… Everything is going up except the wages.
The house on the plateau will not sell for the asking price. They will eventually lower it or it will be negotiated down.
Greedy people.
Another increase!! It’s only 3%, that’s reasonable, really!! Maybe Nunatsiaq News needs to provide a report on the total amount that property taxes haved increased over the past 10 – 15 years and then tell us just how this increase is reasonable?? Every year it’s the same old story, we need to increase taxes to repair this or that or to improve services for this or that. I’d like to see proof that any of the tax increases have actually been utilized for any of the reasons used to justify the increases. Stop using tax increases to justify your incompetence!!
It’s impossible to increase home ownership in Nunavut. I am a mortgage professional. Mortgages are NOT loans. They are security against a loan using land as the collateral asset and title as the document. The loan is against income. The house is attached to the land, called the improvement.
In Nunavut most land has little value. It is leased and has very poor market access and services. It is isolated with almost no interconnected market economic and a small population reliant on external, non-trade funding. This will not change.
As a lender, we look to the long-term value of the security and in Nunavut the total reliance for economy on government means there is almost no housing market outside of Iqaluit. Even then there is little market. It is not possible to change that equation and up the security mortgage value because location and servicing of the land is too remote.
The entire mortgage economy in Nunavut depends 100% on government employment and subsidies. Housing loans against mortgages are extremely limited. Most housing can never be provided by a private market in the Territory unless there is a massive inversion of private sector employment and corresponding trade and manufacturing basics.
The mortgage and housing “market” in Nunavut is a fiction. We only lend and will ever lend to secure government employees whose houses are complete, who have other assets as backup security, and who are in areas starved for housing, meaning very crowded. The majority of families and wait list persons and those without a senior income from a university education can never enter this market. The land is simply not worth enough to compensate the cost of the house.