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(LEVI LANDRY / iNFOnews.ca)

As BC Housing buys up more properties in Kamloops, some councillors have grown concerned about the lost tax revenue.

Just how they plan to tackle the issue isn't clear yet, but they've identified the problem: more supportive housing means less property taxes in city coffers.

"We get all excited when we cut the ribbon on a new hotel or new commercial property, but in the same breath they're getting taken off the market. We're not really adding anything to our tax base as we're trying to grow it," councillor Mike O'Reilly said at a mid-January council committee meeting. 

Across the province, former motels and new builds dedicated to supportive housing can't be taxed by the municipal government, even if they charge rent.

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Those aren't the only BC Housing-owned properties in the city as the Crown agency also has subsidized housing geared toward people close to, or below, the poverty line. It's housing that generally has no services, as opposed to supportive housing with life skills, employment and health-care services.

City staff said $640,000 will be lost in taxes to BC Housing projects, with much of that due to subsidized housing that council itself voted to give tax exemptions for within the last five years, made up by commercial landowners through the year.

At a January committee meeting, councillors spoke at length about how they want to find a way for the province to make up the lost tax revenue without having a financial impact on the non-profits running BC Housing buildings.

The suggestion that tax revenue lost to supportive housing should be made up was met with criticism from Alfred Achoba, executive director of Canadian Mental Health Association Kamloops. He suggested it would create tension with BC Housing and, likely, the local non-profits the province contracts for shelters and other services for the homeless.

"It's a very flawed thinking process," he said. "If we get to that point where we're finger-pointing, there will continue to be gaps in resources."

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The effort on council to address the loss in tax revenue is part of a wider conversation on government "downloading" of costs to local governments, a problem councillor Katie Neustaeter has been spearheading.

Achoba said services at supportive housing sites are funded partly through BC Housing, but it's bolstered by rent payments that are rolled right back into the non-profit's client programs. He also recognized where council's concern comes from, but he said it's misplaced. He bristled at the prospect of the city finding ways to tax the very supportive housing sites or shelters already being run.

"If the city wants to take that approach, then maybe they can start taxing running shelters themselves. Maybe they can start providing supportive housing themselves," he said, adding that property taxes would likely be rolled into a rent increase for tenants, much like any other landlord would do.

What council will do to tackle the problem isn't clear.

"If it's not made up through this forum, it's going to be made up on the backs of all the taxpayers in Kamloops," O'Reilly said.

The provincial government restricts a local government's ability to tax supportive housing as BC Assessment values the land and the buildings at $1 each, meaning there is no tax value to base it on.

Three of the eight supportive housing properties in Kamloops would already be taken out of consideration even if they could be taxed as Spero House on Tranquille Road, Moira House on Kingston Avenue and Mission Flats Manor are all on properties owned by the City itself.

BC Housing-supported sites that don't meet such criteria are still getting tax exemptions through the City itself. Those not owned by BC Housing directly would have to apply for an exemption. The former Greyhound Station shelter, for example, is privately leased.

For now, city staff are looking at options to bring back to council.

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