In any value capture scenario, the value comes from properties somewhere that are owned by someone. In Toronto, the plan to fund a new subway extension has been to levy charges on all property owners and on developments, all to the tune of $900M. Now, the Toronto Star reports that a real estate development coalition has come forward to oppose the levies based on their unfairness to homeowners.
Toronto Mayor John Tory argues that the government's plan is fair and thoroughly considered.
“I think the important thing to keep in mind here is that when you build transit, the land interests of those who own land around transit increases. And I think it’s only fair that those who are going to benefit pay some of the costs of servicing this land with new transit. That’s the principle we operated on. We operated within the law and the appeal will take its course.”
It's a very lucid description of the benefits principle of taxation, the classic argument for value capture. And the mayor considers it a sound legal argument for the levies.
It will be interesting to see how this local battle plays out. I hope the ending of this story doesn't dampen my enthusiasm for Canadian transit value capture.
Ian Carlton is a transportation and land use expert specializing in transit-oriented development (TOD). He helps clients - including transit agencies, planning departments, and landowners - optimize real estate development around transit.
Special thanks to Burt Gregory at Mithun for permission to use the Portland Streetcar image above.