Home builders fear tax will further hurt industry
Winnipeg Free Press
Sunday August 21 2005
GARTH STEEK - YOUR NEW HOME
ALMOST two years ago, the Manitoba Home Builders' Association expressed its concern about the looming shortage of serviced lots in Winnipeg.
The ND Lea report has since confirmed the MHBA's position. It emphasized that based on current building demand, there was just a year and a half supply of serviced lots available within the city.
In raising the issue, the MHBA had also stressed that if the lot shortage was not addressed immediately, the result would be twofold. First, the selling price of remaining lots would rise dramatically and, secondly, there would be significantly greater building outside the city of Winnipeg.
Today, there are virtually no lots left in the southwest quadrant of the city and lot prices have escalated by as much as 50 per cent. The result is that Winnipeg leads the nation in increased prices of new homes.
As well, CMHC predicts that new housing starts outside the city will increase from 450 last year to more than 600 this year. This new building is a loss of assessment base to the city forever.
At the time the ND Lea report came forward, many special interest groups advocated building in the inner city where they said there were at least 800 lots available. When the city released its own land supply report in October of 2004, it corroborated the ND Lea report. The inner-city lots so often mentioned were at most 200, and they shared myriad difficulties that precluded building on them.
The MHBA researched this issue thoroughly and its position, that lot prices would rise dramatically as a result of this shortage, has been confirmed.
Today, the demand for new housing and used housing is without parallel in the history of our city. The reasons for this demand are well documented.
The City of Winnipeg is currently examining the introduction of impost fees of up to $5,000 a lot on all new residential building. It's the position of the MHBA that this unwarranted tax will undermine affordability and ensure an industry-wide slowdown.
Like the lot shortage issue, our research is extensive and thorough. Placing a tax on new building only is like charging a toll on every 50th automobile crossing the new Kenaston underpass. It is inequitable.
The home-building industry is on target for an exceptional year in 2005 with an expectation that 2006 could match this year's output. Hopefully, civic politicians will realize that impost fees are inequitable and will negatively impact on this long overdue growth.
Garth Steek is president of the Manitoba Home Builders' Association.