Incentivizing Productive Reuse: Ontario Applicable Model of Addressing Vacant Buildings

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1 Incentivizing Productive Reuse: Ontario Applicable Model of Addressing Vacant Buildings Vacant buildings pose a series of serious challenges to the neighbourhoods and cities where they are found. They represent a significant risk of fire, a signal of dysfunctional property markets, and are a magnet for criminal activity. Currently the City of Windsor is only equipped with reactive tools to deal with issues surrounding vacancy. 311 complaints enable the city to deal with issues around a vacant property once a property standards violation has become egregious enough for a resident to report it. The Blight Mitigation Strategy, applies only to residential buildings, and removes buildings when their vacancy has persisted to a point of dilapidation where the building is deemed to be beyond its functional life. Unfortunately, this means removing structures, typically on smaller lots than new units are constructed, in areas of the city where new infill residential construction is uncommon. The purpose of this report is to identify proactive strategies to incentivize the productive reuse of buildings that have become vacant. Challenges: The province currently incentivizes the vacancy of commercial and industrial properties through a property tax rebate policy of 30% and 35% respectively. This rebate distorts the true cost of inactivity and speculation reducing the burden on the owner and shifting the burden of vacancy to neighbouring property owners. Additionally, since vacant properties are frequently a source of property standard complaints, they put undue strain on Municipal Law Enforcement services consuming a greater share of city resources than functioning properties. Their risk of fire and criminal activity further compound the city resources consumed by vacant properties. The longer properties remain vacant the further they deteriorate and the issues surrounding them become exacerbated. Recommendations: 1. Request the City of Windsor administration prepare a report similar to Hamilton s Vacant Building Registry By-law (PED09031(c)) (City Wide) report, outlining the specific resources and cost-recovery fees necessary to carry out a proactive program addressing issues associated with vacant buildings. 2. Request the City of Windsor Council adopt the by-law administration produces to address vacant buildings and approve the necessary resources to effectively carry out its enforcement. 1 P a g e

2 City of Hamilton s Vacant Building Registry: In October 2010 the City of Hamilton adopted their Vacant Building Registry By-law requiring owners of vacant properties to register them with the City. The by-law was updated in December Hamilton began with the Vacant Building Protocol in 2009 intending to inspect all vacant properties every three months. The intent of the protocol was to provide a proactive inspection system to protect vacant buildings from further deterioration. Without additional resources to carry out the property inspections this was not feasible. The vacant building registry sought to resolve these issues through introducing a registration fee and annual fee passed as a 100% cost recovery program. Requirements: For more effective monitoring and protection of all vacant buildings in the City, staff is recommending a Vacant Building Registry for Hamilton. The proposed by-law includes the following new requirements for any building which has been vacant for 90 days: - every owner of a vacant building shall be required to register their vacant building; - pay a one-time $240 administrative fee, - pay an annual $600 registration fee to cover the cost of additional staff and resources, - provide up-dated contact information annually, - monitor their vacant buildings once every two weeks or more frequently as required by the City; and, - submit reports with respect to the condition of the vacant building as required by the City (in addition to reports the City already can require under the Property Standards By-law or the Building Code). In 2011 the additional requirements introduced were: - vacant Building Signage displayed on all registered properties, signs must include emergency contact information - a $300 fee for each additional vacant building on a property to cover the costs for inspections and administration Defining Vacant: vacant building means a building that is not completely or not substantially completely occupied by the owner or a person authorized by the owner for more than 90 consecutive days, but does not include a building: (a) containing 1, 2 or 3 dwelling units. provided that each dwelling unit is fit for an individual or individuals to live in, in accordance with all applicable statutes, regulations and by-laws; or (b) occupied by the owner or a person authorized by the owner on a seasonal basis. 2 P a g e

3 How a vacant building is defined is important for the scope of this by-law. By requiring complete occupancy this by-law is able to address partial vacancy in mixed-use buildings. The ground level commercial vacancy is the most visible and damaging to the surrounding community and is the vacancy incentivized by the province. Mixed use buildings are particularly vulnerable to commercial vacancy because there are multiple residential units that can provide revenue streams. Insights from Interview with Hamilton Municipal Law Enforcement (MLE) staff: Four years after Hamilton adopted their vacant building registry there are lessons for other municipalities looking at similar approaches to addressing vacant buildings. Hamilton currently monitors approximately 460 vacant or partially vacant buildings. There are two officers dedicated to working on the program. For monitoring between 400 and 500 properties Hamilton s MLE supervisor would recommend having 3 to 4 officers dedicated to monitoring. Entering into this type of program it is important to establish the city s priority between inspections and enforcement. Enforcement meaning the registration of vacant properties as opposed to the inspection of registered vacant buildings. Early in the program launch Hamilton found their focus was primarily on inspection and had to adjust their focus to ensure they were also cracking down on those properties that had not been registered. Hamilton is able to issue a short form ticket charging the property owner for their property inspection so property inspections can continue on a cost-recovery basis while awaiting charges against the owner for violating the registry by-law. The City of Hamilton has had to take and retain possession of zero properties. They use tax sales to get the building back to productive use as quickly as possible, as is the intent of this bylaw. In keeping with the by-law s intent, buildings that are actively for sale, meaning listed, are not considered vacant. Buildings with active building permits for improvements are also not considered vacant. This requires the building department to monitor building permits to ensure work is actually being done and be prepared to pull permits based on inactivity. In terms of the cost-recovery nature of this program it is important to note Hamilton s MLE supervisor addressed that the program does not recover all costs associated with it. This is important for two reasons. First, the city needs to be committed to addressing the issues of vacancy and see value in doing so. Second, vacant buildings already consume city resources without any cost recovery, so while it may not cover the full program cost, it would be an improved rate of recovery relative to the current system. Latent Economic Potential in Vacant Space: The City of Toronto recently produced a report identifying the economic challenges the province s vacant building property tax rebate presents, stating the current provincially 3 P a g e

4 legislated commercial / industrial vacant property tax rebate program provides a rebate to owners of eligible vacant buildings, but does not address the negative impacts on the surrounding businesses and community or provide an incentive to encourage temporary productive uses that would create employment benefiting the property owner, local business area, and community. From 2002 to 2013 Toronto rebated approximately $367 million to the owners of vacant properties. While the city is providing tax rebates for vacant space they find there is significant demand for affordable commercial space. Toronto identified vacant commercial / industrial buildings as under-utilized assets that have the potential to foster job creation and economic growth Similarly; vacant residential buildings represent a drag on local property markets. Speculation limits comparable sales and blighted properties negatively impact their neighbouring properties values. Finding a creative method to incentivize the productive reuse of residential, commercial, and industrial properties will have positive economic development impacts and will mean shifting the burden of vacancy from neighbouring properties, and the city at large, to the holders of vacant property. Windsor s Community Strategic Plan: Windsor s Community Strategic Plan identifies Our Economy: Cultivated & Competitive as a core pillar and sets Grow Business Cultivate a positive and diverse economic environment for business growth as a priority. Under the pillar of Our Society: Diverse & Caring the strategic plan identifies Stay Safe Ensure public safety and the protection of residents, visitors and property and Create Complete Neighbourhoods Encourage the development of quality neighbourhoods that are well integrated with shopping, workplaces, and recreation, and make sure that those who need assistance have decent and convenient places to live as priorities. Vacant buildings represent a safety risk, a threat to business growth, and lower the quality of our neighbourhoods. Adopting a proactive approach to vacant buildings, such as a vacant building registry, will provide the City of Windsor the opportunity to; help its businesses grow through incentivizing the reintroduction of properties to the active market, improve public safety of residents and of the vacant buildings themselves, and help create complete neighbourhoods. Prepared By: T.J. Auer Community Planner Ford City Neighbourhood Renewal Contact Information: P: E: tjauer@fcnr.org 4 P a g e

5 Appendix I: 05 January 2015 Re: Impact of Vacant Property on Crime & Disorder There is no question that urban blight and abandoned buildings and property (vacancy) can negatively impact the public safety and security of a neighbourhood or community. This perspective is supported by the principles of crime prevention through environmental design (CPTED). The reasoning behind this is that such buildings/property encourage and create opportunities for crime and disorder to develop and remain. While institutional uses such as schools and churches are common examples of where abandonment occurs and blight is subsequently triggered, residential and commercial uses are also susceptible to the negative impacts of vacancy and blight. Most commonly, these spaces become areas of unobservable space, a forerunner to problematic and unlawful behaviour. Property that is vacant will visibly indicate nobody is in care or control of the site. This, more often than not, translates into crime and disorder problems. Problems typically start out relatively minor (disorder) in nature such as loitering, vandalism, trespassing, graffiti, etc. but left unchecked can quickly escalate into more serious problems that are more criminal in nature such as break and enter, drug dealing, and arson. This is the Broken Windows theory of problem escalation with such properties. Once vacancy and blight has established itself, it acts as a cancer to the surrounding neighbourhood, triggering social deterioration. When examining a building or an area of blight or abandonment, the principles of CPTED are applied (Natural Surveillance, Access Control, Territoriality, Activity Management, Target hardening, Behaviour Engineering). Blight/abandoned buildings also exacerbate fear of crime. As this condition is left unchecked or uncorrected, it attracts graffiti and vandalism. Graffiti and vandalism in turn become visible signs of intimidation for neighbours and, allowed to remain, the 5 P a g e

6 property becomes very difficult and costly (both financially and socially) to reclaim and resurrect for the neighbourhood where it resides. The real dilemma behind why abandoned or blighted property becomes the neighbourhood detraction that everyone dreads is that a change in a building or area s designation, definition, and design (or some combination thereof) has occurred. Once something is no longer used for the purpose it was first created and its form changes as well, then problems begin to occur. In summary, urban blight and abandoned buildings can and are a catalyst to social decay and problematic behaviour within neighbourhoods where they exist. A strategy needs to be developed to address the problem on a comprehensive scale so that the appropriate outcomes may be realized. Respectfully yours, BARRY HORROBIN, B.A., M.A., CLEP, CMM-III Director of Planning & Physical Resources WINDSOR POLICE SERVICE 6 P a g e