Decision 2010: Calgary Municipal Election

[DizzyEdge]

Originally Posted by Cage

So there appears (from reading this thread) there are many Nenshi supporters on this forum and a lot of you guys n gals are early Nenshi supporters.

I think Nenshi is a very smart person, well spoken, with great (overall) policies. That said I won't vote for the guy based 2 of his Better Idea policies, namely Airport Tunnel and Secondary Suites.

His views on the airport tunnel are just not feasible and too late in the game. The runway and associated infrastructure is well past the design stage where the tunnel could be efficiently built into the runway design. My deep concern is that a Mayor Nenshi will engage CAA (Calgary Airport Authority) to get the Tunnel built. When CAA responds saying "Sorry but previous council turned down the Tunnel and runway planning and construction is too far along for the tunnel to be included. Turned down Nenshi will then start a fight with CAA to get the board elected by City officials rather than Chamber of Commerce. Great idea but the fight will take at least 2 years to get federal government to transfer land title (lease) to new city appointed authority. During this time of airport authority governance crisis all construction and planning will grind to halt. No new international terminal (badly needed for peak traffic periods) and no new runway (which is needed to support the traffic for the new terminal).

I will toss an open question to this forum of Nenshi supporters. How does Nenshi Better Idea vision get implemented while concurrently constructing the runway and terminal? Follow up question, if Mayor Nenshi becomes a reality, how does he implement Better Idea #4 without starting a fight with CAA and Federal Government?

Second issue with Nenshi is the Secondary Suites. Nenshi wants secondary suites to bring more affordable housing for Calgary. A great goal but in order for affordability to be attained two things not currently in the policy must happen.
1) Policy must not increase property taxes. If secondary suites are legal, then market value of the property increases as in relation to surrounding properties, therefore increasing property taxes for secondary suite home owner. If affordable housing is the goal Nenshi must include a policy statement that secondary suite home owners would receive a tax break, a controversial stance that would be opposed by most Calgarians since they would not receive preferential property tax breaks.
2) Legalizing secondary suites will result in large capital gain on sale of the home. The legal secondary suite homeowner would lose primary residence status on the home they must occupy under Better Idea #1. As a tax accountant I can conservatively estimate this would increase homeowner income taxes by $15,000 for each $100,000 increase in market value. Example, Buy home for $250,000, convert the home to include a secondary suite, sell couple years later for $350,000 result in a capital gain of $100,000. Capital gains include into income a 50% for a taxable capital gain of $50,000. Effective tax rate of 29% for Alberta (average tax rate, highest is 37% lowest 0 for those under basic exemption) yields an April tax bill of $14,500. City of Edmonton warns about loss of primary residence status at the following webpage http://www.edmonton.ca/city_government/planning_development/secondary-suites-faq.aspx#9758

So question to the Nenshi Secondary Suite supporters, how does Better Idea #1 get implemented while maintaining affordability, balancing property tax "fair share" for all Calgarians, and not forcing secondary suite home owners into a crushing capital tax bill on sale of home?

Originally Posted by TallDrinkofWater

Apparently you posted something that's too intelligent and too thought out for anyone to reply to..funny how they ignore you - quite revealing IMO

The secondary suites issue has never been that high on my radar since the neighbourhood I live in have a large number of smaller homes that are rented as single units, but I will comment about point 1): I have my doubts that higher property taxes will be a big factor. The reason I say so is when I was shopping around for houses a few years back many houses advertised plainly in the MLS ads of having "non-legal basement suite", I'm not sure if it suddenly being legal would add a huge amount to the value of the house. As well, on a $350k-$400k house property taxes might be around $160 / mo, a 25% increase in value might only add $50 a month to the tax bill, which isn't going to make or break the business case for renting out a basement suite for $600+ a month.

[Ramsayfarian]

Originally Posted by TallDrinkofWater

Apparently you posted something that's too intelligent and too thought out for anyone to reply to..funny how they ignore you - quite revealing IMO

I didn't reply because I don't know the answer to the first question and I thought I didn't know the answer to the second question, but after rereading it, I'll take a stab at it.


"So question to the Nenshi Secondary Suite supporters, how does Better Idea #1 get implemented while maintaining affordability, balancing property tax "fair share" for all Calgarians, and not forcing secondary suite home owners into a crushing capital tax bill on sale of home?"

Not sure how much property tax would increase, but I can't be seeing it being that much. Far less than what they'll make by renting out their suite. It's not like Nenshi has invited the concept of secondary suites. There are hundreds if not thousands of secondary suites in this city.

With regards to taxable gains, one would think a tax attorney would know that is a federal issue. Other than warning future landlords, which The City already does, what else should the city should be doing.

[Radley77]

Watched the videos and clips. I think the questions brought up were well within what she be expected during a vetting process.

As I have mentioned before, I support the priorities as per her campaign policy so these issues didn't really have anything to do with her priorities but was more with respect to transparency and background.

Before releasing her full campaign platform, there were valid criticism about a lack of detail, but since it has been released there has been very little criticisms of the details. The biggest one was that artsvote lacked specificity besides tangential issues like her support for secondary suites, and maintaining previous funding levels, and zoning for industrial lands for artists. I also think she was also voted as second to Nenshi by the artsvote website. Nenshi to date, has not released an arts and culture Better Idea, and neither has Ric McIver. To read where Barb Higgins stands with respect to the artsvote issues it is listed here, she also released her arts and culture policy at the same time as she released her entire campaign platform: http://artsvotecalgary.ca/candidates/mayoral/barb-higgins

Barb also apologized for the comment she made to one of the ArtsVote representatives here: http://barbhiggins.ca/news/higgins-response-comments-breakfast-television-interview.html

The biggest credible criticism I have heard of her to date was brought up by Wayne Stewart and questioned her financial background in a CBC interview awhile back. However, it had been addressed later she put a plan in place as to what she plans to do immediately after entering office to deal with the budget, and secondly that she would seek support from a U of C public policy economist to open up a wide discussion on the budget before approving.

Wayne Stewart has a ton of credibility, I was really impressed with his platform but not unlike a number of participants had trouble getting his message out. I think his endorsement for Nenshi is well-valued.

There is not a ton of undecideds out there at this point, so it will take extremely credible criticism of her to knock her back. She has so far showed a solid base, and had a fairly large uptake of the undecided vote as she rolled out her campaign platform.

I am starting to wonder though, when will we start seeing some more of Ric McIver...

I would like to see Barb Higgins in a three way debate. Apparently, she is on Global News again tomoro. I would like to see more pointed criticism of her policies, because the status quo line of 'all she can do is read a teleprompter' needs to be addressed. There needs to be a fleshing out of what Barb Higgins is 100% unscripted.

For those unclear, Higgins had a press release on transparency a couple of days ago:

http://barbhiggins.ca/assets/files/Barb-Higgins-pledges-transparent-city-hall-oct11.pdf

[fusili]

Originally Posted by Cage

I will toss an open question to this forum of Nenshi supporters. How does Nenshi Better Idea vision get implemented while concurrently constructing the runway and terminal?

From what I understand, they do have designs on the tunnel. Correct me if I am wrong. IIRC, this was just an issue of Council having the plans, and not having the money to build what they planned for.

Originally Posted by Cage

1) Policy must not increase property taxes.
2) Legalizing secondary suites will result in large capital gain on sale of the home.

Ok, the libertarian is going to come out in me here. If someone has a secondary suite in their home, they should pay more property taxes, because their home is worth more. I don't see why this is a bad thing. Additional income generation on your property should equate with a increase in your property value. Should we also have a policy that outdoor pools should not increase property taxes as well?

As per your second point, if building a secondary suite will result in a large capital gain on the sale of your home, and you don't like this- DON'T BUILD A SECONDARY SUITE! I hate this let's protect people from their own bad mistakes crap. If someone wants to build a secondary suite, they should take all the pros (additional income) and cons (additional permit fees, property value increase and capital gains) together with it. I don't think the government has any business preventing something because we think people might make bad financial decisions.

[fusili]

My previous post did remind me of one thing. I am a total Nenshi supporter, but I disagree with him on one thing, and that is his stance (or at least what I can get from some of what he said) on taxi licenses. I think the city should get out of this cap on licenses crap right away. The argument that always goes around, and one even Nenshi seems to support, is that if we had an unrestricted number of licenses, then it would be hard to make a living as a taxi driver. Which I see as a terrible argument. Do we have a cap on the number of engineers, plumbers, teachers, doctors, car sales people, bankers etc? What is it about taxi drivers that excludes their industry from the rules of the market. If you can't make enough money as a taxi driver because there are too many taxi drivers- Don't become a taxi driver. I don't see what is so hard about that. The whole restriction on licenses has to be scrapped, immediately.

[DizzyEdge]

I think Cage's secondary suite point was more that legal suites will cause such an increase in legal suited property value that the combination of property tax increases and taxes on capital gains when selling will make legal suites less affordable to tenants.

[shogged]

Originally Posted by fusili

My previous post did remind me of one thing. I am a total Nenshi supporter, but I disagree with him on one thing, and that is his stance (or at least what I can get from some of what he said) on taxi licenses. I think the city should get out of this cap on licenses crap right away. The argument that always goes around, and one even Nenshi seems to support, is that if we had an unrestricted number of licenses, then it would be hard to make a living as a taxi driver. Which I see as a terrible argument. Do we have a cap on the number of engineers, plumbers, teachers, doctors, car sales people, bankers etc? What is it about taxi drivers that excludes their industry from the rules of the market. If you can't make enough money as a taxi driver because there are too many taxi drivers- Don't become a taxi driver. I don't see what is so hard about that. The whole restriction on licenses has to be scrapped, immediately.

so true. and if there ever becomes too many taxis? the ones who are friendly, on time, clean vehicles... they will get the business. The ones who are the opposite get pushed out of the market. Just like I wouldn't hire the plumber who does a shitty job. Pun totally intended.

[fusili]

And I just heard the Higgins interview with X929. After hearing that my opinion of Barb Higgins just got a whole lot worse.

She is so defensive. Welcome to politics. People are going to not like you and they are going to

My favorite line "I am not getting paid to do this." As if everyone was expecting her to. I don't think any other candidates are getting paid to do it either.

Which is finally brings me back to Nenshi. Correct me if I am wrong, but other than his campaign strategist, does he have any paid staff whatsoever? (and I am not sure he is paid either)

[TallDrinkofWater]

Originally Posted by mooky

Opinion, not fact.

What gives you the right to come out and judge - without providing any information yourself - your the one thats just stating your opinion.

[Ramsayfarian]

Originally Posted by TallDrinkofWater

What gives you the right to come out and judge - without providing any information yourself - your the one thats just stating your opinion.

No, he stating that what Cage wrote was just an opinion. Which is a fact. It's up to Cage to prove that his opinion contains facts. Like when you replied to Cage's post with, "Apparently you posted something that's too intelligent and too thought out for anyone to reply to..."

That too is an opinion.
BTW, what gives you the right to come out and judge?

[brentwood]

More in response to Tall Drink's recent posts than that of Cage, but as usual with any tax issues it really is a lot more complex than at first sight regarding secondary suites. It is likely beyond the scope of the discussion but for those really interested, Canada Revenue Agency's IT-120R6 "Principal Residence" might be worth reading. (IT = Income Tax Interpretation Bulletin)

An excerpt:

"¶ 32. It is our practice not to apply the deemed disposition rule, but rather to consider that the entire property retains its nature as a principal residence, where all of the following conditions are met:

(a) the income-producing use is ancillary to the main use of the property as a residence,

(b) there is no structural change to the property, and

(c) no CCA is claimed on the property.

These conditions can be met, for example, where a taxpayer carries on a business of caring for children in his or her home, rents one or more rooms in the home, or has an office or other work space in the home which is used in connection with his or her business or employment."

Again, not to bore everyone but I thought the issue deserved a response. It is clearly not as black and white as Cage previously indicated.

[Boris2k7]

I think the argument about the capital gains is interesting, but I don't think it defeats the policy. Personally, as someone who is currently living in a non-owner occupied home (that can't be more than 1200sqft) with 5 other students, the hype over secondary suites (most often basement suites) is nonsensical.

Granted, I am in a small town, but there are as many residents as there are students. The spatial patterns are much of what one would expect, as the homes nearest the school such as mine are the ones with the heaviest concentration of renters, and as one gets further out to other towns that drops very drastically. One person I know lives in a space in the church down the road from here since it was close and at a comparable price.

EDIT: Note that I am living in a rooming/boarding house, which although not strictly the same as a secondary suite also operates in a legal gray area.

[Innersoul1]

Originally Posted by Bigtime

Brown on brown hate! Paging Innersoul to the thread!

Brown on Brown hate....racism in it's worst form says the wise Mark Colucci.
We browns are probably the most racist lot there, but typically we are pretty self depreciating. I don't know what it is, maybe it was the colonization of India by the Brits that made us see the white way!?

Let me say that I think a lot of brown folks feel that they need to assimilate into the white way to some extent, having white friends, voting for white politicians, living in the white neighbourhood....

When I was in India my families friends thought I was king s&%t because my wife was white. They like white things....hence the large Indo-Pakistani population; snow is white

But honestly, there often seems to be a feeling thst brown peopler can't do it as well.

My dad asked me who I was voting for, i said Nenshim he said "why? because he's brown!?" i said dammit dad, that's racism in it's worst form!

[srperrycgy]

Boris2K7 all decked out in purple!

[nick.flood]

Originally Posted by fusili

My previous post did remind me of one thing. I am a total Nenshi supporter, but I disagree with him on one thing, and that is his stance (or at least what I can get from some of what he said) on taxi licenses. I think the city should get out of this cap on licenses crap right away. The argument that always goes around, and one even Nenshi seems to support, is that if we had an unrestricted number of licenses, then it would be hard to make a living as a taxi driver. Which I see as a terrible argument. Do we have a cap on the number of engineers, plumbers, teachers, doctors, car sales people, bankers etc? What is it about taxi drivers that excludes their industry from the rules of the market. If you can't make enough money as a taxi driver because there are too many taxi drivers- Don't become a taxi driver. I don't see what is so hard about that. The whole restriction on licenses has to be scrapped, immediately.

Nenshi also discussed today when posed the question on his QR77 interview that a majority of taxi licences are held by the brokers and not the drivers themselves, restricting the driver's abilities to earn a decent living while the brokers are making a lot of money. This is something he wants to evaluate.

[Dafunk]

So the Herald just posted this article on Barb. Sad to say but I think her campaign will lose steam after this.

http://www.calgaryherald.com/mobile/iphone/story.html?id=3673183

[Calgary_Guy]

Originally Posted by Dafunk

So the Herald just posted this article on Barb. Sad to say but I think it hurt her.

http://www.calgaryherald.com/mobile/iphone/story.html?id=3673183

Glad you posted this video! People needed to see this, it is a valid point to wonder who are the individuals wanting her to run for mayor? With her face well known to most Calgarians they must have thought she was a sure win.

[Bassic Lab]

Originally Posted by brentwood

More in response to Tall Drink's recent posts than that of Cage, but as usual with any tax issues it really is a lot more complex than at first sight regarding secondary suites. It is likely beyond the scope of the discussion but for those really interested, Canada Revenue Agency's IT-120R6 "Principal Residence" might be worth reading. (IT = Income Tax Interpretation Bulletin)

An excerpt:

"¶ 32. It is our practice not to apply the deemed disposition rule, but rather to consider that the entire property retains its nature as a principal residence, where all of the following conditions are met:

(a) the income-producing use is ancillary to the main use of the property as a residence,

(b) there is no structural change to the property, and

(c) no CCA is claimed on the property.

These conditions can be met, for example, where a taxpayer carries on a business of caring for children in his or her home, rents one or more rooms in the home, or has an office or other work space in the home which is used in connection with his or her business or employment."

Again, not to bore everyone but I thought the issue deserved a response. It is clearly not as black and white as Cage previously indicated.

Subsection b looks like the tricky one for secondary suites to me. The city requires a number of elements, such as separate entrances and HVAC systems, that are not common to SFHs. Whether those modifications amount to structural changes is a question I cannot answer. If a legal secondary suite does eliminate the tax advantages of a Principal Residence it does not invalidate the concept. Capital gains is not a huge issue if you plan to live somewhere until you die, as a number of people attempt to do.

[DizzyEdge]

Rick Bell is piling on:

http://www.calgarysun.com/news/columnists/rick_bell/2010/10/15/15698386.html

[jeffwhit]

HVAC is not structural, it's HVAC. I know lots of people with no secondary suite, and two furnaces, and two water heaters, (they're rich and live in gigantic houses.) This clause seems to pertain to an addition made to the property for the purpose of a secondary suite or home office.

Now TDOW can go crawl back into his hole and write crazy things in the Herald comments.